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Department of Defence—Report for 2013-14, incorporating the report of the Defence Materiel Organisation—Volume 1—Performance, Governance and Accountability


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DEFENCE ANNUAL REPORT 2013-14

Volume One Performance, governance and accountability

Defending Australia and its National Interests www.defence.gov.au

OUR

VALUES

We respect diversity and are committed to cultural change through our values:

Professionalism

Loyalty

Integrity

Courage

Innovation

Teamwork

COVER IMAGE: © Lisa Tomasetti 2014

Lance Corporal James Duncan, who plays Alex, in a scene from The Long Way Home. In 2010, James deployed to Afghanistan and, in February 2011, he was injured in an improvised explosive device strike on the Bushmaster armoured vehicle he was driving. Despite being dazed and sore from the explosion, James stayed on in Afghanistan for another five months and managed the pain with physiotherapy. On returning to Australia, his chronic back pain worsened and by the end of 2011 he was essentially incapable of doing his job. James saw The Long Way Home as an important public forum to help other soldiers dealing with injuries and trauma.

DEFENCE ANNUAL REPORT 2013-14 | VOLUME ONE Performance, governance and accountability

User guide Purpose of the annual report

This report covers the Department of Defence, the Australian Defence Force and the Defence Materiel Organisation—collectively known as Defence. The Department of Veterans’ Affairs and Defence Housing Australia, which are parts of the Defence portfolio, have separate annual reports.

Portfolio Budget Statements, Additional Estimates Statements and annual reports are the principal formal accountability mechanisms between the Government, departments and the Parliament. Portfolio Budget Statements set out performance targets for departmental programs, Portfolio Additional Estimates Statements may contain revised targets, and annual reports describe achievement against the targets. Annual reports are designed to link performance during the year under review with performance and financial forecasts contained in the Portfolio Budget Statements for the following year. This report covers the period 1 July 2013 to 30 June 2014.

About this report

The report is structured according to annual report requirements approved by the Joint Committee of Public Accounts and Audit. This year the report is published in two volumes. Our intent has been to reduce the size of the hard-copy report by pointing readers to an expanded online version of the report. We will be printing only enough copies of Volume Two to meet tabling requirements. This measure, coupled with a streamlined performance report (Volume One), will enable us to save around 150 reams of print-quality paper in keeping with the Government’s digitisation policy.

Part One of Volume One provides an overview of Defence, its structure and its strategic direction. Part Two discusses performance against each of Defence’s outcomes and programs. Part Three provides details of organisational governance and accountability. Volume Two contains the audited financial statements.

For ease of reference in Part Two, please open the foldout at the back of the report. This will show you the outcome and program structure adjacent to the page being viewed.

The program deliverables and key performance indicators tables in chapters 3, 4 and 5 are assessed using the key system shown below.

Key Description

Met All targets for 2013-14 were met or exceeded.

Substantially met Targets were mostly met and any issues were being managed.

Partially met Some targets were met and any issues were being managed.

Not met No or minimal progress was made against targets.

Online content

An electronic version of this report, and supplementary content that includes additional detailed information, can be accessed at www.defence.gov.au/annualreports. Supplementary content is shown in grey bold italics in the text of this report.

Letter of Transmittal

Senator the Hon David Johnston Minister for Defence Parliament House Canberra ACT 2600

Dear Minister

We present the Defence Annual Report 2013-14 for the year ended 30 June 2014. The report has been prepared in accordance with section 63 of the Public Service Act 1999. Subsection 63(1) of the Act requires that our report to you be tabled in Parliament.

In accordance with section 45 of the Financial Management and Accountability Act 1997 and pursuant to regulation 16A of the Financial Management and Accountability Regulations 1997, we certify that we are satisfied that Defence has prepared fraud risk assessments and fraud control plans and has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the department. Defence has taken all reasonable measures to minimise the incidence of fraud and to investigate and recover the proceeds of fraud.

Yours sincerely

Dennis Richardson Secretary

24 October 2014

Mark Binskin, AC Air Chief Marshal Chief of the Defence Force 24 October 2014

iv DEFENCE ANNUAL REPORT 2013-14

Lest we forget Sadly, one Australian died on operations in Afghanistan over the past year. We remember Lance Corporal Todd Chidgey, along with all Australia’s fallen, and offer our deepest sympathy to Lance Corporal Chidgey’s family, friends and colleagues.

■ Lance Corporal Todd Chidgey

2nd Commando Regiment.

Died in a non-combat-related incident on 1 July 2014.

Awarded posthumously for courageous actions Corporal Cameron Baird was killed by small-arms fire during an engagement with insurgents in the Khod Valley in southern Afghanistan on 22 June 2013.

■ Corporal Cameron Baird, VC, MG

Corporal Baird was serving with a 2nd Commando Regiment element of the Australian Special Operations Task Group at the time of his death, and was the 40th Australian to be killed in action in Afghanistan.

Corporal Baird was awarded the Victoria Cross for Australia posthumously on 13 February 2014. The citation reads, ‘For the most conspicuous acts of valour, extreme devotion to duty and ultimate self-sacrifice at Ghawchak village, Uruzgan Province, Afghanistan as a Commando Team Commander in Special Operations Task Group on Operation Slipper’. He is the 100th Australian to receive a Victoria Cross since the award was first created by Queen Victoria in 1856.

A year after he was killed in action, Corporal Baird’s family was presented with the posthumously awarded NATO Meritorious Service Medal. Awarded by the NATO Secretary General, this medal is presented to personnel who have been commended for providing exceptional or remarkable service to NATO.

Corporal Baird was awarded the NATO medal for the same courageous actions for which he received the Victoria Cross.

Corporal Cameron Baird’s medals on display at the Australian War Memorial in Canberra. The Victoria Cross for Australia is on the far left.

DEFENCE ANNUAL REPORT 2013-14 v

Inside the Defence Annual Report 2013-14

Volume One: Performance, governance and accountability

User guide ii

Letter of Transmittal iii

PART ONE DEFENCE OVERVIEW

CHAPTER 1 Reviews by the Secretary and the Chief of the Defence Force 2

CHAPTER 2 Departmental overview 7

PART TWO PERFORMANCE1

Chapter 3 Defence outcomes and programs—Outcome 1 22

Chapter 4 Defence outcomes and programs—Outcome 2 76

Chapter 5 Defence outcomes and programs—Outcome 3 83

Chapter 6 Defence Materiel Organisation 85

PART THREE GOVERNANCE AND ACCOUNTABILITY

Chapter 7 Reform and cultural change 112

Chapter 8 People 127

Chapter 9 Corporate governance 153

Chapter 10 External accountability 158

Chapter 11 Asset management, procurement and capital investment 164

APPENDIXES

Appendix A Environmental performance 168

Appendix B Consultancies and contracts 171

Appendix C Grants and payments 180

Appendix D List of requirements 182

Acronyms and abbreviations 185

Index 186

DEFENCE ANNUAL REPORT 2013-14 1 DEFENCE ANNUAL REPORT 2013-14

1PART ONE DEFENCE OVERVIEW

2 DEFENCE ANNUAL REPORT 2013-14

CHAPTER 1 Reviews by the Secretary and the Chief of the Defence Force

Secretary’s review

Any organisation the size of Defence has a whole smorgasbord of good and bad over the course of a year. That said, a lot was achieved in 2013-14 in which Defence civilians can take real pride:

• The professional provision of critical enablers (e.g. intelligence, facilities, logistics, financial services, communications and pay) which allow the Australian Defence Force to put into the field the highly trained men and women in whom all Australians are so proud.

• The very first exercise by a Commonwealth agency of a provision in the Commonwealth Procurement Rules for a construction contract to an Indigenous-owned enterprise—Pacific Services Group Holdings Pty Ltd for a project worth up to $6 million at HMAS Waterhen in Sydney.

• A solid increase in the number of Indigenous Australians in the Defence APS.

• The very significant contribution by the Defence Science and Technology Organisation to the whole-of-government effort in the search for MH370 in the Indian Ocean.

• The very significant contribution by the Australian Geospatial-Intelligence Organisation to the whole-of-government effort in the MH17 recovery operation in Ukraine.

• The substantive contribution by the Australian Signals Directorate to Australia’s counter-terrorism operations and other intelligence priorities.

• The Defence Materiel Organisation’s management of the acquisition of the landing helicopter docks, the largest naval vessels in Australia’s history.

• The conclusion of new Base Support Contracts, worth in excess of $10 billion over 10 years.

• The conclusion of a treaty-level agreement with the United States about its annual Force Posture rotations through northern Australia.

• The provision of quality policy advice and assessments around ADF operations, regional engagement and for the 2015 Defence White Paper.

• Further implementation of shared services.

• Further refinement and implementation of the 2012-17 Corporate Plan.

• Effective management of the Defence budget.

The department continued to downsize, with full-time equivalent staff reducing from around 22,300 in mid-2012 to around 19,500 in October 2014. The downsizing has been achieved with minimum fanfare and with the cooperation of staff, despite the obvious difficulties involved.

Secretary of the Department of Defence Dennis Richardson

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DEFENCE ANNUAL REPORT 2013-14 3

The downsizing will continue, following decisions in the 2014-15 Budget, while the implications of the First Principles Review, which began in August 2014, are still unknown.

Most of the downsizing has come from natural attrition, which means that the impact has been uneven and largely uncoordinated. This will need to be addressed and tidied up following the First Principles Review.

The focus over the years on Defence APS staffing numbers has distorted rational management of the workforce which, on the civilian side, consists of APS, contractors and service providers. It also ignores past reforms which, as an efficiency and cost-saving measure, replaced higher-cost ADF personnel with lower-cost APS in jobs which did not require specific ADF skills.

The Defence cultural reform program—Pathway to Change—continues, with an emphasis on behaviour and personal accountability. Within the APS at least, we are making more progress on the former rather than the latter.

More broadly, we have made good headway in the recruitment of Indigenous Australians, but we still have a long way to go. Our performance in recruitment of people with disability has been disappointing.

We have taken a number of initiatives to increase the percentage of female graduates in our recruitment. Early results are positive, but we are still well behind where we want to be.

Our own internal audits and those conducted by the Australian National Audit Office have highlighted the need to front-end load all aspects of planning, capability considerations and project management—artificial deadlines and rushed decisions almost inevitably leading to poor outcomes.

Underinvestment in facilities and ICT is starting to catch up with us and, unless addressed, will have a negative impact on ADF capability. This will be a focus in the 2015 White Paper, but will need to be balanced against other capability needs.

We gained further efficiency through shared services, especially in the finance and procurement domains. In April 2014, we embarked on the next phase of shared services, and hope to take this further through the First Principles Review.

We made progress in developing our Defence Enterprise Management System, comprising the enterprise risk framework, enterprise planning process (the Defence Corporate and annual plans) and a Defence Enterprise Report. This is a core element of our strategy to drive high performance and the implementation of the Public Governance, Performance and Accountability Act 2013.

The year 2014-15 will be dominated by the negotiations for a new workplace agreement, the First Principles Review and the new White Paper.

Given the fiscal environment and the parameters within which we must work, a new workplace agreement will not be easy to achieve.

The First Principles Review got underway much later than we would have liked. Led by former Managing Director of Rio Tinto Australia, David Peever, it is critically examining processes, structures and all aspects of Defence work relating to efficiency and effectiveness. The findings of the Review Team will feed into White Paper considerations.

A firm implementation plan will be an important part of the Review. It will almost certainly mean that 2015 will see significant change in Defence structures and the way we do our business.

The 2015 White Paper is being underpinned by a Force Structure Review, the first since 2008-09. As stated publicly by the Government, the essential challenge in the White Paper will be to better align money and capability. This means that some necessarily tough decisions will need to be taken. The Government is also committed to a Defence Industry Statement in the context of the White Paper, which will underpin the essentiality of a productive and competitive Australian defence industry.

4 DEFENCE ANNUAL REPORT 2013-14

The year 2014-15 will see continued Australian Defence involvement in Afghanistan and Iraq, continued regional engagement, including through established forums such as the ASEAN Defence Ministers Meeting Plus, the trilateral strategic arrangements with the United States and Japan, and the essential engagement we have with China, Indonesia, Malaysia, Singapore, the Republic of Korea, India, Papua New Guinea, Timor-Leste and South Pacific countries. At the same time, our relations with NATO are being upgraded.

It will be especially important to continue to ensure that the men and women of the ADF operating in harm’s way and in challenging environments have the very best enablers available.

Finally, I would like to record my gratitude to General David Hurley, who completed his term as Chief of the Defence Force on 30 June 2014. While I have previously worked with other CDFs in different jobs, General Hurley was my first partner in what is called the diarchy. His commitment and professionalism made it easy. I look forward to continuing the partnership with General Hurley’s successor, Air Chief Marshal Mark Binskin, with whom I have already worked closely when he was VCDF. Unfortunately, Air Chief Marshal Binskin and General Hurley do share an area of continued poor judgement—support for the 2014 NRL Champions, the Rabbitohs!

See chapters 4 and 5 for further details on operations in 2013-14.

Figure 1.1: ADF operations during 2013-14

Operation Solania Operation Render Safe Operation Philippines Assist Operation Paladin

Operation Mazurka Operation Palate II Operation Slipper Operation Aslan Operation Gateway Operation Resolute

Operation NSW Bushfires Assist Operation Southern Indian Ocean

1,765 PERSONNEL ON OPERATIONS OVERSEAS during 2013-14

TOTA L ADF

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DEFENCE ANNUAL REPORT 2013-14 5

Chief of the Defence Force’s review

I am proud to take command of the Australian Defence Force (ADF) at a time when we can reflect on our impressive heritage, while looking towards the future. Thanks to General Hurley’s outstanding leadership, I assume command of a Defence Force that is well poised to meet the challenges as we transition to a future force and to continue our well-

established reform program. In parallel with these activities, the ADF continues to operate in Afghanistan and the Middle East region, as well as contributing to the whole-of-government effort to protect Australia’s borders and maritime interests.

My priority over the next four years is to successfully transform the ADF into the next generation force in accordance with the strategic direction of the upcoming 2015 Defence White Paper. We must learn from the successes and failures of our past to ensure that we transition as a capable and professional force that is trusted and respected by all Australians, and the region. To do this, we must:

• continue to conduct successful global operations

• continue with all aspects of our reform program

• deliver programs and services to sustain the health and welfare of our people—both at home and on operations—and the wellbeing of their families

• maintain our current capabilities and associated support equipment and facilities to the required levels of preparedness and safety

• safely, efficiently and effectively introduce our new weapons systems—most importantly, all the capabilities associated with delivering the joint amphibious capability

• evolve the strategic-level ADF headquarters command and control architecture to ensure timely and accurate information, and consistent high-quality advice and decisions to support successful joint operations

• continue to build and maintain strong and enduring regional relationships

• understand and better manage our energy footprint at home and on operations.

Most importantly, during my tenure we must work together to fully understand, address and put behind us the legacy issues that have come to the surface over the past three years, detailing how some of our people have been poorly treated, abused or assaulted. Clearly, their treatment was, and remains, unacceptable. We must learn from this dark aspect of our past and work to regain the respect of the whole Australian community.

I am pleased to be able to continue my close relationship with the strong and experienced ADF leadership team: Vice Admiral Ray Griggs (Vice Chief of the Defence Force), Vice Admiral Tim Barrett (Chief of Navy), Lieutenant General David Morrison (Chief of Army), Air Marshal Geoff Brown (Chief of Air Force), Vice Admiral David Johnston (Chief of Joint Operations) and Lieutenant General John Caligari (Chief Capability Development). I look forward to working with Dennis Richardson, Secretary of Defence, and his dedicated senior leadership team. I am also looking forward to continuing to work with the entire Defence team—uniformed personnel (both full-time and reserves), civilians and supporting contractors—to deliver the best capability possible from the available resources.

This will be a period of continuing change and challenges, as highlighted by the short-notice deployment to the Middle East to counter the Islamic State of Iraq and the Levant in September 2014, but I know we are able to meet these challenges.

Chief of the Defence Force Air Chief Marshal Mark Binskin, AC

6 DEFENCE ANNUAL REPORT 2013-14

FEATURE |

General Hurley says farewell When I assumed command in July 2011, the Australian Defence Force (ADF) was on the cusp of significant change. More than 3,300 ADF personnel were deployed on operations in Timor-Leste, Solomon Islands and Afghanistan, new combat capability projects were commencing and Defence had just embarked on a cultural reform program. These factors informed the priorities I set for the ADF during my tenure as Chief of the Defence Force.

I am pleased that we have met the majority of these priorities and made significant progress on the remaining points. We have achieved our objectives and concluded operations in Timor-Leste and Solomon Islands; we have completed our mission to train the Afghan National Army in Uruzgan; and we continue to assist and support the Afghan Security Forces as their training, logistic and sustainment functions mature. The recent search for MH370 demonstrated the strength of our existing strategic and regional partnerships and created opportunities for further cooperation with other Indo-Pacific nations.

The ADF will soon take ownership of and commence training on two new capabilities— the Joint Strike Fighter and the Landing Helicopter Dock ships. Over the past three years under my Command Team’s guidance our submarine availability has improved considerably, Navy’s reformed engineering practices are evident and Plan Beersheba is on track to further modernise the Australian Army to meet the challenges of the future.

We have accepted that the ADF did not always provide an environment where all members were safe from sexual, physical and mental abuse. I have apologised on behalf of the ADF to those who have suffered sexual, physical or mental abuse while serving in the ADF. As an organisation, we are serious about addressing long-term cultural reform and

we have demonstrated our willingness to act swiftly and decisively when incidences of abusive or unacceptable behaviour occur. We are also fully committed to improving gender equality and diversity in our workforce. I want to reassure people that Air Chief Marshal Mark Binskin will continue the work which began during my tenure while he is in command.

On a personal note, I thank all our members for their service, and their families for their support. I have enjoyed meeting many of our people and spending time observing them work, in the field, on base or in our ships. I am always impressed by the passion and professionalism they apply to the work we do at home and abroad. Despite adversity or danger, when Australia calls on its Defence Force in times of need, our people respond with compassion and capability—this is why we choose to serve and I am immensely proud to have served as Chief of the Defence Force.

Incoming Chief of the Defence Force Air Chief Marshal Mark Binskin (left) and outgoing Chief of the Defence Force General David Hurley

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DEFENCE ANNUAL REPORT 2013-14 7

CHAPTER 2 Departmental overview

This chapter gives an overview of Defence, which consists of the Department of Defence, the Australian Defence Force (ADF), the Defence Materiel Organisation (DMO) and some smaller entities.

Role The primary role of Defence is to defend Australia against armed attack and to be able to deploy more widely in pursuit of Australia’s national security interests. Australia’s defence policy is founded on the principle of self-reliance in the direct defence of Australia, but with a capacity to do more where there are shared interests with partners and allies.

Mission The ADF is constituted under the Defence Act 1903, and its mission is to defend Australia and its national interests. In fulfilling that mission, the ADF serves the Australian Government of the day and is accountable to the Australian Parliament, which represents the Australian people, for efficiently and effectively carrying out the Government’s defence policy.

Values Defence civilian employees conduct their duties in accordance with the Public Service Act 1999, the Australian Public Service (APS) Code of Conduct and the APS Values. The ADF—the Army, the Navy and the Air Force— has service-specific codes of conduct and values.

In addition to the single-service and APS values, specific Defence values have been established to provide a common and unifying thread for all people working in Defence. These values are:

Professionalism striving for excellence in everything we do

Loyalty commitment to each other and Defence

Integrity doing what is right

Courage the strength of character to honour our convictions (moral courage) and bravery in the face of personal harm (physical courage)

Innovation actively looking for better ways of doing our business

Teamwork working together with respect, trust and a sense of collective purpose.

Strategic direction In 2014-15, major whole-of-organisation activities will shape Defence’s future.

In early 2014, the Government began the development of a new Defence White Paper, for release around mid-2015. The White Paper will provide the Government’s long-term strategic direction for Australia’s defence, aligning defence policy, strategy, force structure and organisation in an affordable and achievable way.

8 DEFENCE ANNUAL REPORT 2013-14

The Defence White Paper will include a comprehensive review of Australia’s strategic environment and outline the tasks that the Government expects the ADF to undertake and how those tasks will be achieved within available resources. It will be informed by a Force Structure Review designed to rigorously assess defence capability goals to find the right balance between capability and cost.

The White Paper will be costed and aligned with the Government’s commitment to increase defence spending to 2 per cent of Australia’s gross domestic product by 2023-24. It will be accompanied by a new 10-year Defence Capability Plan and Defence Industry Policy Statement.

The development of the White Paper is supported by a government-appointed external expert panel and will include broad consultation within the Australian Government and with state and territory governments, key experts and think tanks, Australian industry, the Australian public and international allies and partners.

The First Principles Review will consider whether Defence is fit for purpose and is able to deliver its intended outputs with the minimum resources necessary.

Changes in ministerial responsibilities On 18 September 2013, a new Australian Government was sworn in with the following ministers in the Defence portfolio:

• Minister for Defence: Senator the Hon David Johnston

• Assistant Minister for Defence: the Hon Stuart Robert MP

• Parliamentary Secretary to the Minister for Defence: the Hon Darren Chester MP.

The Minister for Veterans’ Affairs, Senator the Hon Michael Ronaldson, is in the Defence portfolio but reports separately through the Department of Veterans’ Affairs budget statements and annual report.

Details of the allocation of portfolio responsibilities for Defence are online at www.minister.defence.gov.au/allocation-of-portfolio-responsibilities.

Changes in senior leadership Rear Admiral David Johnston was promoted to Vice Admiral and appointed Chief of Joint Operations on 20 May 2014, following the retirement of Lieutenant General Ash Power.

Ms Rebecca Skinner was appointed Deputy Secretary Defence People on 12 May 2014.

Mr Peter Baxter was appointed Deputy Secretary Strategy on 28 January 2014.

Mr Brendan Sargeant was appointed Associate Secretary and Chief Operating Officer on 12 September 2013.

Mr Colin Thorne was appointed General Manager Land and Maritime within the DMO on 9 September 2013.

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DEPARTMENTAL OVERVIEW

DEFENCE ANNUAL REPORT 2013-14 9

Portfolio structure The Defence portfolio consists of a number of component organisations that together are responsible for supporting the defence of Australia and its national interests. The most significant bodies are:

• the Department of Defence: a department of state headed by the Secretary of the Department of Defence

• the ADF: commanded by the Chief of the Defence Force (CDF) and consisting of the three Services, which are commanded by Service chiefs

• the DMO: a prescribed agency within Defence, headed by a Chief Executive Officer.

The portfolio contains some smaller entities, including a number of statutory offices created by the Defence Force Discipline Act 1982, Defence Act 1903, Naval Defence Act 2010 and Air Force Act 1923 as well as the Australian Strategic Policy Institute.

Figure 2.1: Defence portfolio structure

CDF Secretary

Australian Defence Force

Navy Army Air Force

Navy Reserves

Army Reserves

Air Force Reserves

Navy Cadets

Army Cadets

Air Force Cadets

Statutory offices

Various small trusts, companies and authorities

Defence Housing Australia

Department of Defence

including

Defence Materiel Organisation

Ministers

Organisational structure Defence’s workforce consists of ADF members of the Navy, Army and Air Force and members of the APS. The joint leadership of Defence by the Secretary and the CDF is known as the ‘diarchy’. The diarchy reflects the individual and joint responsibilities and accountabilities of the Secretary and the CDF through directions given by the Minister for Defence. Figure 2.2 shows Defence’s organisational structure at 30 June 2014.

Defence reports against its programs under four outcomes—three for Defence and one for the DMO. Please refer to the foldout at the back of the report for a detailed outcome and program structure.

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Figure 2.2: Defence organisational structure at 30 June 2014

Minister for Defence Senator the Hon David Johnston

Assistant Minister for Defence The Hon Stuart Robert MP

Parliamentary Secretary to the Minister for Defence The Hon Darren Chester MP

Secretary

Mr Dennis Richardson

Chief of the Defence Force General David Hurley

Associate Secretary and Chief Operating Officer Mr Brendan Sargeant

Chief Executive Officer Defence Materiel Organisation Mr Warren King

Chief Finance Officer Mr Phillip Prior

Enabling functions

Vice Chief of the Defence Force Air Marshal Mark Binskin

Capability and output managers

Stars ( ) refer to ADF Star rank.

Chief Information Officer Dr Peter Lawrence

Deputy Secretary Defence People Ms Rebecca Skinner

Deputy Secretary Defence Support and Reform Mr Steve Grzeskowiak

Chief of Navy Vice Admiral Ray Griggs

Chief of Army Lieutenant General David Morrison

Chief of Air Force Air Marshal Geoff Brown

Chief of Joint Operations Vice Admiral David Johnston

Deputy Secretary Intelligence and Security Mr Stephen Meekin

Deputy Secretary Strategy Mr Peter Baxter

Chief Defence Scientist Dr Alex Zelinsky

Chief Capability Development Vice Admiral Peter Jones

General Manager Land and Maritime Mr Colin Thorne

General Manager Submarines Mr David Gould

General Manager Joint, Systems and Air Ms Shireane McKinnie

Deputy Chief Executive Officer and General Manager Commercial Mr Harry Dunstall

Defence delivers five principal outputs to government

The Joint Force-in-Being The standing, prepared force that provides options to government for future joint force operations.

Joint Force Operations The coordinated use of the Joint Force-in-Being, often with other instruments of national power, to meet national strategic objectives.

National intelligence products All-source intelligence assessments and other products to support Defence and national-level decision making and the planning and conduct of ADF and other operations.

Engagement and advice to government The suite of relationships between Defence and the Government and Parliament, with other agencies of government, other governments and defence forces, Australian industry and the wider Australian community, as well as the provision of advice to government on all aspects of Defence’s activities.

Obligations to government The breadth of obligations and compliance requirements that form the basis of Defence’s relationship with government and the Australian community.

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DEPARTMENTAL OVERVIEW

DEFENCE ANNUAL REPORT 2013-14 11

How the department evolved Following Federation in 1901, the Commonwealth took over responsibility for matters concerning the whole nation, which, until then, had been dealt with individually by the six colonies. Defence was one of the first functions to be passed to the new Australian Government. The function of the newly established Department of Defence was to administer the Army and the Navy and supervise the allocation and disbursement of the small defence budget.

The outbreak of World War I led to the creation of an expeditionary force made up of nearly 330,000 men and women who were sent overseas to different theatres of war. This placed unprecedented demands on the small organisation. To administer and provide logistics to such a large military force, the department increased its military and civilian workforce—including a record number of female clerks—from 267 in 1914 to 1,483 by 1918.

Between 1919 and 1932, employment preference in the department was given to returned soldiers. Of the 972 men admitted to permanent positions in the clerical division in this period, 924 were returned soldiers. In the second half of the 1930s, as the effects of the Great Depression eased, the Government slowly increased its defence spending in response to the developing situation in the Far East and in Europe. Between 1934 and 1940, 186 new clerks were appointed to the department. There was also a need for higher educational standards, and the Department of Defence was the leading department in financing university scholarships.

Administrative changes in 1939 resulted in the formation of a group of departments that included three separate service departments (Navy, Army and Air), the civilian Department of Defence, and the Ministry of Supply and Development, which was responsible for military logistics and munitions production. Each body had a separate minister, secretary and budget. This structure would continue for another three decades.

During World War II, the divided structure worked because the three Services were much of the time fighting three ‘different’ wars in three different theatres of operation. The department continued to deal with defence policy and joint service matters and provided a secretariat for the higher committees. When the war ended, a voluntary exodus of many temporary staff members made the employment of returned servicemen easier.

During and after World War II, the location of the Department of Defence in Melbourne created administrative problems due to its distance from the federal government in Canberra. Sir Frederick Shedden, one of the most influential public servants of his time and the Secretary of the department from 1937 to 1956, was largely responsible for the delay in transferring the department to Canberra, as he lived and worked in Melbourne. The move finally happened under Sir Edwin Hicks, who was Secretary of the department from 1956 to 1968.

A 1957 report by Lieutenant General Sir Leslie Morshead, a decorated World War I and II veteran and successful businessman, recommended the amalgamation of the three service departments into a single Department of Defence and the amalgamation of the departments of Supply and Defence Production. The report was not accepted by the government of the day; the disjointed and complex structure continued and management and support of the Services were primarily matters for independent and separate decisions by the service boards. The Defence Administration Committee, established in early 1959, met only annually to review defence expenditure, and the Minister for Defence and his department provided input once a year into the overall service estimates.

In 1967, during Australia’s involvement in the Vietnam War, Lieutenant General (later General) Sir John Wilton, Chairman of the Chiefs of Staff Committee, proposed the formation of a unified Department of Defence and the abolition of the three separate service departments and ministers. Wilton argued that a clear chain of operational control would be needed if Australia were to be involved in future joint military operations. His proposal was unsuccessful.

It was Sir Arthur Tange, the Secretary of the department from 1970 until his retirement in 1979, who was to implement the much-needed change to Defence’s structure and management. In 1973, Tange produced Australian Defence: Report on the Reorganisation of the Defence Group of Departments (the Tange Report). The report contained many of Morshead’s and Wilton’s proposals. Although unpopular and criticised by many, the report’s recommendations were accepted by the government of the day, paving the way for the Defence Force Reorganisation Act 1975. The three single-service departments were abolished and the Department of Defence was formed, headed by a Secretary. In 1976, General (later Sir) Francis Hassett was appointed the first Chief of Defence Force Staff. In October 1984, the title changed to Chief of the Defence Force.

The Secretary of the Department of Defence retained traditional statutory responsibilities as permanent head of the department and adviser to the minister on policy, resources, organisation and finance. The Chief of the Defence Force Staff exercised joint responsibility for the administration of the Defence organisation. This division of responsibilities—the diarchy—has continued through to the present day.

12 DEFENCE ANNUAL REPORT 2013-14

FEATURE |

Drawdown from Afghanistan The Australian contribution in Afghanistan in 2013-14 focused mainly on support roles after the majority of ADF personnel redeployed from Uruzgan in late December 2013.

This support included a continuing advisory mission to the Afghan National Army 4th Brigade of the 205th Corps in Uruzgan Province, adviser support to the 205 Corps, logistics training and advising to the Afghan Central Supply Depot, and embedded staff support to the International Security Assistance Force Headquarters elements including Regional Command (South). The ADF commenced and has continued to provide adviser contributions to the Afghan National Army Officer Academy and Headquarters of the General Command of Police Special Units and 205 Corps in preparation for the Train-Advise-Assist Mission of Resolute Support, which will begin on 1 January 2015.

The ADF began to reduce its presence in Uruzgan Province during 2013 in preparation for the transfer of security responsibility to the Government of the Islamic Republic of Afghanistan and the Afghan National Security Forces. As the lead nation in Combined Team Uruzgan, Australia, working with the United States and other key

coalition partners and the Afghan National Security Forces, conducted a drawdown of adviser elements and enablers, while continuing to advise key personnel in the Afghan National Security Forces. The ADF deployed a specialist team of logisticians, signallers and engineers to support the redeployment of Australian forces and complete the remediation and handover of a large part of the multinational base at Tarin Kot to the Afghan National Security Forces.

The 2013 drawdown and end of the ADF mission in Uruzgan resulted in a reduction of personnel numbers, which also marked a change from a provincially focused mission to one centred on adviser support to national institutions. The logistics training mission ceased in mid-2014.

Commensurate with the drawdown in Uruzgan, the ADF also reduced its headquarters and support functions in Kabul, in Kandahar and at the Al Minhad Airbase in the United Arab Emirates. Australia maintains a modest national headquarters element and air mobility, logistics and communication enablers at Al Minhad Airbase to support continuing operations in the region, including those deployed on Operation Slipper in Afghanistan.

A long line of Afghan and Australian vehicles convoyed across the Uruzgan and Kandahar deserts during Operation Tor Ghar IV.

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DEFENCE ANNUAL REPORT 2013-14 13

Resource summary The Defence departmental net cash spend as at 30 June 2014 was $25,689 million. This was an underspend of $438.3 million when compared to the revised estimate as at the Defence Portfolio Budget Statements 2014-15, primarily as a result of:

• an underspend of $268.6 million in no-win/no-loss operations funding

• a hand back of $52.3 million in no-win/no-loss foreign exchange funding due to an appreciation in the Australian dollar.

Table 2.1: Departmental net cost of service (cash)

2013-14 budget estimate[1] $’000

2013-14 revised estimate[2] $’000

2013-14 actual result $’000

Variation $’000

Cost of service

Employee payments 10,170,235 10,120,793 10,052,671 -68,122

Supplier payments 9,300,167 9,614,890 9,252,251 -362,639

Purchase of specialist military equipment 3,179,327 4,559,211 4,397,336 -161,875

Purchase of inventory 1,054,362 1,069,130 1,088,078 18,948

Purchase of property, plant and equipment[3] 1,489,833 1,563,983 1,662,996 99,013

Other[4] 891,869 912,765 925,004 12,239

Total cash used 26,085,793 27,840,772 27,378,336 -462,436

Own source revenue[5] 1,655,473 1,713,444 1,689,296 -24,148

Net cost of service (cash) 24,430,320 26,127,328 25,689,040 -438,288

Funded by

Appropriation Bills 1, 3 & 5 (Price of Outcomes) 23,796,086 24,516,997 24,272,707 -244,290

Appropriation Bills 2, 4 & 6 (Equity injection) 683,005 1,521,488 1,418,385 -103,103

Other appropriation movements - - - -

Return of contributed equity -48,771 -46,500 -32,441 14,059

Cash holdings from previous appropriations -- 67,349 - -67,349

Decrease to cash at bank - 67,994 30,389 -37,605

Total funding source 24,430,320 26,127,328 25,689,040 -438,288

Additional output funding -

Revised total funding source 24,430,320 26,127,328 25,689,040 -438,288

Defence no-win/no-loss hand-back (net) 320,760

Departmental variance -117,528

Notes

1. As published in the Portfolio Budget Statements 2013-14, Table 43.

2. As published in the Portfolio Budget Statements 2014-15, Table 45.

3. Includes purchase of land and buildings, infrastructure, plant and equipment, intangibles and heritage and cultural assets.

4. Includes grants, GST payments, finance costs, repayment of debt, selling costs on sale of assets and other cash used.

5. Includes sale of goods and services, other cash received, interest received, GST and proceeds from sale of assets.

The following financial information is available online:

• total cost of Defence programs on an accrual basis • departmental and administered income and expenses

• departmental and administered net cost of service.

14 DEFENCE ANNUAL REPORT 2013-14

Table 2.2: Overall cost to government of Defence outcomes (departmental and administered)

Outcome 1 $’000 Outcome 2 $’000

Outcome 3 $’000

Total $’000

Departmental

Expenses

Employees 10,010,058 156,103 6,226 10,172,387

Suppliers 10,106,307 437,292 22,653 10,566,252

Grants 5,988 42,808 - 48,796

Depreciation and amortisation 3,867,716 - - 3,867,716

Finance cost 129,106 - - 129,106

Writedown of assets and impairment of assets 852,653 - - 852,653

Net losses from sale of assets 4,340 - - 4,340

Other expenses 91,625 15 - 92,640

Total expenses 25,068,793 636,218 28,879 25,733,890

Income

Revenue

Goods and services 809,327 17,960 - 827,287

Other revenue 865,459 - - 865,459

Total revenue 1,674,786 17,960 - 1,692,746

Gains

Reversals of previous asset writedowns 293,384 - - 293,384

Net gains from sale of assets - - - -

Other gains 37,863 - - 37,863

Total gains 331,247 - - 331,247

Total income 2,006,033 17,960 - 2,023,993

Net cost of departmental outcomes 23,062,760 618,258 28,879 23,709,897

Administered

Expenses 13,010,915 - - 13,010,915

Revenue 1,409,769 - - 1,409,769

Net cost of administered outcomes 11,601,146 - - 11,601,146

Total departmental and administered outcomes 34,663,906 618,258 28,879 35,311,043

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Table 2.3: Defence resource statement, 2013-14

Actual available appropriation for 2013-14

$’000

Payments made 2013-14 $’000

Balance remaining 2013-14 $’000

Ordinary annual services

Outcome 1 23,440,073 23,463,438 -23,365

Outcome 2 1,022,827 761,757 261,070

Outcome 3 54,097 47,512 6,585

Total departmental outputs 24,516,997 24,272,707 244,290

Total ordinary annual services 24,516,997 24,272,707 244,290

Departmental non-operating

Equity injection 1,521,488 1,418,385 103,103

Total departmental non-operating 1,521,488 1,418,385 103,103

Total available annual appropriation 26,038,485 25,691,092 347,393

Other services

Previous years’ outputs (appropriation receivable) 67,349 - 67,349

Cash available 68,460 32,970 35,490

Funding from other sources 1,046,599 1,046,599 -

Returns to the Official Public Account (net) -32,441 -32,441 -

Total other resourcing 1,149,967 1,047,128 102,839

Total available departmental resourcing 27,188,452 26,738,220 450,232

Special appropriations

Special appropriations limited by criteria/entitlement

Defence Forces Retirement Benefits Act 1948 Part 1, s. 15D and VIC, s. 82ZJ

53,362 53,362 -

Defence Force Retirement and Death Benefits Act 1973 Part XII, s. 125 1,451,263 1,451,263 -

Military Superannuation and Benefits Act 1991 Part V, s. 17 500,457 500,457 -

Defence Force (Home Loans Assistance) Act 1990 Part IV, s. 38 1,577 1,577 -

Defence Home Ownership Assistance Scheme Act 2008 Part VI, s. 84 91,977 91,977 -

Other administered - - -

Total special appropriations 2,098,636 2,098,636 -

Funding from other sources 1,467,573 1,467,573 -

Returns to the Official Public Account (net) -1,467,573 -1,467,573 -

Total other resourcing - - -

Total administered resourcing 2,098,636 2,098,636 -

Total resourcing 29,287,088 28,836,856 450,232

Special accounts

Opening balance 75,125 - 75,125

Appropriation receipts - - -

Appropriation receipts—other agencies - - -

Non-appropriation movements to special accounts 33,801 40,544 -6,743

Total special accounts 108,926 40,544 68,382

16 DEFENCE ANNUAL REPORT 2013-14

People summary Efforts to grow the ADF while concurrently achieving efficiencies in Defence’s APS workforce have had a clear effect on the Defence workforce. The actual funded strength of the ADF and the actual staffing level (full-time equivalent, FTE) for the APS at 30 June 2014 were 56,922 and 19,988, respectively, compared to 56,117 and 21,006 at 30 June 2013. These actual staffing figures are the most reliable indicator of end-of-year staffing levels.

For the APS, this was a reduction of 1,018 actual FTE from 2012-13. This reflects the continuing downward trend following a reduction of 1,278 in 2012-13. The downward trend is also evident in other Defence workforce statistical data. The average FTE for 2013-14 of 20,496 reflected the average number of employees receiving salary or wages over the financial year, with adjustments for casual and part-time staff. This compared to the 2012-13 average FTE of 21,534. As the APS workforce trends down, the average figure for the year will always be above the end-of-year actual figure. The downward trend will continue in 2014-15 in line with government direction and budget forecasts.

Defence’s APS headcount for the year also showed a downward trend, from 22,105 at 30 June 2013 to 21,194 at 30 June 2014, a reduction of 911. The headcount figure includes paid and unpaid employees, covering full-time, part-time, ongoing and non-ongoing employees. (The headcount figure should not be used to calculate overall numbers of paid staff (FTE) in Defence.)

The ADF is increasing to a permanent workforce strength of around 58,500. It grew by 805 (from a funded strength of 56,117 to 56,922) in 2013-14, and is forecast to continue its growth in future years.

Further details on the workforce are in Chapter 8.

Actual staffing levels

13,719 28,453 13,945 21,006 PERMANENT WORKFORCE

Actual funded strength for the adf and actual fte for the aps, as at 30 june for each year

13,921 29,010 13,991 19,988

202 557 46 1,018

AND

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DEFENCE ANNUAL REPORT 2013-14 17

Workforce planning figures

Table 2.4: Defence and DMO consolidated workforce table

2012-13 actual result

2013-14 budget estimate[1]

2013-14 revised estimate[2]

2013-14 actual result Variation %

ADF[3]

Total ADF permanent force 56,607 58,235 56,570 56,364 -206 -0.4

APS

APS—Defence 15,786 15,547 15,268 15,280 12 0.1

APS—DMO 5,389 5,307 4,878 4,812 -66 -1.4

APS—DMO (APS backfill) 359 363 428 404 -24 -5.6

Total APS 21,534 21,217 20,574 20,496 -78 -0.4

Contractors[4]

Defence contractors 358 445 346 340 -6 -1.7

DMO contractors 33 48 28 18 -10 -35.7

Total contractors 391 493 374 358 -16 -4.3

Total workforce strength 78,532 79,945 77,518 77,218 -300 -0.4

Notes

All numbers represent average full-time equivalents. Employees on forms of leave without pay are not included.

1. As published in the Portfolio Budget Statements 2013-14.

2. As published in the Portfolio Additional Estimates Statements 2013-14.

3. Numbers for ADF permanent force include ADF members in the DMO, and Reservists on continuous full-time service but excludes Active and High Ready Reserve Reservists (Navy 2,021, Army 14,662, Air Force 3,058) who rendered service during the financial year. These are excluded because, due to the nature of Reserve service, numbers for the Reserve force represent headcounts rather than average full-time equivalents.

4. Contractors are individuals under contract performing agency roles. Contractors are not APS employees.

Figure 2.3: Defence workforce summary (including DMO) as at 30 June 2014

Army (37%)

Navy (18%)

Air Force (18%)

APS (26.5%)

Contractors (0.5%)

18 DEFENCE ANNUAL REPORT 2013-14

The Long Way Home: rehabilitation through the arts

In an innovative performing arts initiative, Defence partnered with the Sydney Theatre Company to produce The Long Way Home, a play focusing on experiences of war.

Men and women from the ADF worked with the Sydney Theatre Company, sharing their personal stories with Australian playwright Daniel Keene. They participated in acting and movement workshops and were mentored by some of Australia’s finest theatrical talent. The Long Way Home portrayed the reality of conflict and the fear and disillusionment that some ADF members face on their return home from operations, including the impact of post-traumatic stress disorder.

The project is one of the many ways Defence is addressing military mental health and highlighting the efforts that are being undertaken to reduce

the stigma that still exists around mental health in Australia.

One of the project’s aims was to assist with the rehabilitation and recovery of ADF members who had been wounded or injured, or become ill in service. It also provided insight into the sacrifices made by ADF members and gave the Australian community an opportunity to understand the impact a decade of operations can have on the ADF.

Former Chief of the Defence Force General David Hurley said the play provided a unique opportunity to tell an important story.

‘The Long Way Home offered an important insight into the war experiences of a group of servicemen and women who have had the courage to share their stories with us’, he said.

FEATURE |

Photo: Sergeant Rob Hack

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DEPARTMENTAL OVERVIEW

DEFENCE ANNUAL REPORT 2013-14 19

‘It’s a very human story. It’s the Australian Defence Force’s story and it’s an important one to tell.’

Brigadier Alison Creagh, Director General ADF Theatre Project, said that there was a long-held tradition of men and women of the Navy, Army and Air Force doing remarkable things on behalf of Australia.

‘It has been my great privilege to lead a remarkable group of men and women from the ADF who have upheld this tradition and have shown great courage’, she said.

‘Their goal has been to help others, make a difference and share their experiences, and they have excelled.’

The production opened in Sydney in February 2014 and was presented in eight major cities across the nation as part of the official Centenary of Anzac program. It was performed for more than 30,000 people over 40 performances. There were standing ovations and close to sell-out performances throughout the tour.

A significant outcome of the project has been a marked improvement in the confidence and self-esteem of the ADF participants, placing them in a much stronger position to deal with their own transition. The Long Way Home has also helped further the important conversation on military mental health, and is one of the many ways the ADF is addressing the issue of veterans’ mental and physical health. This is an important focus for Defence after a decade of high operational tempo.

Defence and the Sydney Theatre Company raised funds through corporate donations and sponsorship to help deliver The Long Way Home. The project was supported by many areas within the Department of Defence as well as the Department of Veterans’ Affairs.

Corporal Tim Loch as Tom and Odile Le Clezio as Beth Photo: Lisa Tomasetti

Brigadier Wayne Goodman as Dr Cutter and Lance Corporal Gary Wilson as Zac Photo: Lisa Tomasetti

Corporal Tim Loch as Tom Photo: Lisa Tomasetti

DEFENCE ANNUAL REPORT 2013-14 21

2PART TWO PERFORMANCE

22 DEFENCE ANNUAL REPORT 2013-14

CHAPTER 3 Outcome 1

Outcome 1: The protection and advancement of Australia’s national interests through the provision of military capabilities and the promotion of security and stability

Summary

The primary focus of Outcome 1 is on maintaining the capacity to support current commitments and provide strategic response options to the Government to meet the range of potential future security contingencies. As well as the provision of military capabilities, this outcome encompasses all of the policy, command and support functions undertaken by the organisation.

Structure

There are 17 programs under Outcome 1. These include departmental outputs for programs 1.1 to 1.13 and administered expenses relating to retirements, superannuation and housing support services.

Figures 3.1 and 3.2 show the extent to which the deliverables and key performance indicators for Outcome 1 have been met.

Figure 3.1: Deliverables Figure 3.2: Key performance indicators

Met (67%)

Partially met (4%)

Substantially met (29%)

Met (78%)

Partially met (4%)

Substantially met (18%)

For ease of reference in Part Two, please open the foldout at the back of the report. This will show you the outcome and program structure adjacent to the page being viewed.

OUTCOME 1

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DEFENCE ANNUAL REPORT 2013-14 23

Table 3.1: Total cost of Defence Outcome 1

2013-14 budget estimate[1] $’000

2013-14 revised estimate[2] $’000

2013-14 actual result[3] $’000

Variation

$’000 %

Program 1.1: Office of the Secretary and CDF

Revenues from other sources 539 539 1,592 1,053 195

Departmental outputs 164,183 164,146 162,417 -1,729 -1

Program 1.2: Navy Capabilities

Revenues from other sources 248,407 164,756 131,850 -32,906 -20

Departmental outputs 4,332,858 4,585,977 4,401,693 -184,284 -4

Program 1.3: Army Capabilities

Revenues from other sources 156,852 101,736 108,879 7,143 7

Departmental outputs 5,343,805 5,729,352 5,684,714 -44,638 -1

Program 1.4: Air Force Capabilities

Revenues from other sources 323,449 218,148 138,341 -79,807 -37

Departmental outputs 4,165,276 4,564,679 4,384,276 -180,403 -4

Program 1.5: Intelligence Capabilities

Revenues from other sources 13,550 12,276 7,610 -4,666 -38

Departmental outputs 524,824 518,654 550,113 31,459 6

Chief Operating Officer

Revenues from other sources 348,905 333,096 421,708 88,612 27

Departmental outputs 5,173,208 5,279,776 5,020,614 -259,162 -5

Program 1.6: Chief Operating Officer—Defence Support and Reform

Revenues from other sources 334,311 324,849 405,073 80,224 25

Departmental outputs 3,747,675 3,729,187 3,623,672 -105,515 -3

Program 1.7: Chief Operating Officer—Chief Information Officer

Revenues from other sources 14,594 8,247 16,166 7,919 96

Departmental outputs 972,779 1,089,636 970,082 -119,554 -11

Program 1.8: Chief Operating Officer—Defence People

Revenues from other sources - - 469 469 -

Departmental outputs 452,754 460,953 426,860 -34,093 -7

Program 1.9: Defence Science and Technology

Revenues from other sources 35,317 32,112 32,290 178 1

Departmental outputs 427,200 421,217 425,664 4,447 1

Program 1.10: Vice Chief of the Defence Force

Revenues from other sources 231,636 329,338 287,835 -41,503 -13

Departmental outputs 1,251,094 1,196,585 1,403,090 206,505 17

24 DEFENCE ANNUAL REPORT 2013-14

2013-14 budget estimate[1] $’000

2013-14 revised estimate[2] $’000

2013-14 actual result[3] $’000

Variation

$’000 %

Program 1.11: Joint Operations Command

Revenues from other sources 373 334 1,290 956 286

Departmental outputs 50,680 48,259 45,208 -3,051 -6

Program 1.12: Capability Development

Revenues from other sources 86,203 20,208 65,647 45,439 225

Departmental outputs 883,841 344,979 444,403 99,424 29

Program 1.13: Chief Finance Officer

Revenues from other sources 822,302 794,797 808,991 14,194 2

Departmental outputs 560,563 586,449 540,568 -45,881 -8

Program 1.14: Defence Force Superannuation Benefits

Defence Force Retirement Benefits Act 1948 Part 1, s.15D and VIC, s. 82ZJ(1) - - - - -

Defence Force Retirements and Death Benefits Act 1973 Part XII, s.125(3) 96,957 124,657 7,924,126 7,799,469 6,257

Military Superannuation and Benefits Act 1991 Part V, s.17 1,255,387 2,020,000 2,053,485 33,485 2

Total administered expenses 1,352,344 2,144,657 9,977,611 7,832,954 365

Administered revenue from other sources 1,279,134 1,279,902 1,242,134 -37,768 -3

Total Program 1.14 73,210 864,755 8,735,477 7,870,722 910

Program 1.15: Defence Force Superannuation Nominal Interest

Defence Force Retirement Benefits Act 1948 Part 1, s.15D and VIC, s. 82ZJ(1) 26,918 21,954 22,100 146 1

Defence Force Retirements and Death Benefits Act 1973 Part XII, s.125(3) 1,481,592 1,345,795 1,344,000 -1,795 -

Military Superannuation and Benefits Act 1991 Part V, s. 17 1,419,134 1,584,493 1,573,000 -11,493 -1

Total administered expenses 2,927,644 2,952,242 2,939,100 -13,142 -

Administered revenue from other sources - - - - -

Total Program 1.15 2,927,644 2,952,242 2,939,100 -13,142 -

Program 1.16: Housing Assistance

Defence Force (Home Loan Assistance) Act 1990 Part IV, s. 38 1,963 1,817 1,577 -240 -13

Defence Home Ownership Assistance Scheme Act 2008 Part VI, s. 84 104,626 101,192 92,064 -9,128 -9

Total administered expenses 106,589 103,009 93,641 -9,368 -9

Administered revenue from other sources 12,192 12,727 13,448 721 6

Total Program 1.16 94,397 90,282 80,193 -10,089 -11

Table 3.1 (continued)

OUTCOME 1

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DEFENCE ANNUAL REPORT 2013-14 25

2013-14 budget estimate[1] $’000

2013-14 revised estimate[2] $’000

2013-14 actual result[3] $’000

Variation

$’000 %

Program 1.17: Other Administered

Administered revenue from other sources 158,214 168,761 154,187 -14,574 -9

Expenses - - 563 563 -

Total Program 1.17 -158,214 -168,761 -153,624 15,137 -9

Total resourcing

Total departmental outputs 22,877,532 23,440,073 23,062,760 -377,313 -2

Total administered 2,937,037 3,738,518 11,601,146 7,862,628 210

Total departmental revenue from other sources 2,267,533 2,007,340 2,006,033 -1,307 -

Total administered revenue from other sources 1,449,540 1,461,390 1,409,769 -51,621 -4

Equity injection 683,005 1,521,488 1,418,385 -103,103 -7

Total resources for Outcome 1 30,214,647 32,168,809 39,498,093 7,329,284 23

Notes

5. As published in the Portfolio Budget Statements 2013-14, Table 11.

6. As published in the Portfolio Budget Statements 2014-15, Table 12.

7. At the program level, departmental revenues from other sources include minor reclassifications from expenses.

Further information on Outcome 1 expenditure is available online.

Table 3.1 (continued)

26 DEFENCE ANNUAL REPORT 2013-14

Program 1.1 Office of the Secretary and CDF

The Secretary of the Department of Defence, Mr Dennis Richardson, AO, was appointed on 18 October 2012. The Secretary is the principal civilian adviser to the Minister and carries out the functions of an agency head within the APS. As an agency head, the Secretary has, on behalf of the Commonwealth, all the rights, duties and powers of an employer with respect to APS employees in Defence.

The Chief of the Defence Force, Air Chief Marshal Mark Binskin, AC, was appointed CDF on 1 July 2014, following the retirement of General David Hurley. The CDF has primary responsibility for the command of the ADF under the direction of the Minister for Defence. The CDF is also the principal military adviser to the Minister and provides advice on matters that relate to military activity, including military operations.

The Deputy Secretary Strategy, Mr Peter Baxter, was appointed on 28 January 2014. He is responsible for providing strategic guidance and policy advice to the Secretary and CDF, and through their offices to portfolio ministers and the Government, on central issues of Australia’s defence policy, including the development and use of Defence capability, Defence international engagement, strategic policy development and the strategic dimension of ADF operations.

The Office of the Secretary and Chief of the Defence Force’s primary objective in delivering Program 1.1 is to support the Secretary and the Chief of the Defence Force to deliver high-quality policy advice to the Government, drive organisational reform and exercise strategic leadership. The Office is administered, on behalf of the Secretary and the Chief of the Defence Force, by the Chief Operating Officer.

The Office comprises the small personal offices of the Secretary and the Chief of the Defence Force, the Strategy Executive (comprising Strategic Policy and International Policy Divisions), the Audit and Fraud Control Division and a number of military justice agencies.

The Office manages a considerable array of operational, policy, commercial, regulatory, risk and other matters associated with the Defence mission of defending Australia and its national interests.

During 2013-14, the Office continued to drive implementation of a number of strategic reforms across Defence. It implemented new measures to align Defence’s corporate functions with strategic planning and is guiding the development of the 2015 Defence White Paper.

The Group continued to drive implementation of strategic reforms across Defence.

OUTCOME 1

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DEFENCE ANNUAL REPORT 2013-14 27

Table 3.2: Program 1.1 deliverables

Deliverable Status

Provide direction for the contribution of Defence to operations as directed by Government Met

Ensure delivery of the Defence Cooperation Program within available resources Met

Oversee implementation of agreed recommendations of the ADF Posture Review Met

Ensure Defence’s international relationships complement broader foreign policy goals, promote security and enhance productive Defence partnerships, particularly regionally, including through the Defence Cooperation Program

Met

Guide the development of the 2015 Defence White Paper Met

Ensure Defence strategic policy aligns with Government direction and priorities, including fiscal policy Met

Provide policy advice on strategic issues including arms control, international collaborative programs, major capability acquisitions, industry and innovation policy Met

Manage export control of defence and strategic goods Met

Implementation of the recommendations of the review into the Woomera Prohibited Area Substantially met The Woomera Prohibited Area

Bill 2013 passed through the Parliament; the associate rule to enable coexistence is still being finalised.

On behalf of the Secretary and CDF, undertake independent audits of Defence activities, and coordinate Australian National Audit Office activity in Defence Met

On behalf of the Secretary and CDF, take a leading role in the prevention and detection of fraud, undertake fraud investigations, and produce the Defence Fraud Control Plan Met

Administer use of the Australia - United States Defence Trade Cooperation Treaty by Australian Government agencies and the defence industry Met

Table 3.3: Program 1.1 key performance indicators

Key performance indicator Status

Group-specific outcomes and programs are delivered within allocated resources and meet directed efficiency, economy measures, and economy and cultural measures Met

Staff skills are developed and personnel management practices successfully balance competing priorities Met

Policy guidance is forward-looking, timely, innovative and practical Met

Further information on the Defence Cooperation Program and its expenditure is available online.

28 DEFENCE ANNUAL REPORT 2013-14

PROFILE | Jacinta Hudson

Defence offers Jacinta unique opportunities at home and abroad Jacinta Hudson joined the International Policy Division in 2006 after completing the Defence Graduate Development Program. During her time in the division, Jacinta has worked across each of the four geographic branches, performing a variety of roles that have led to unique opportunities both in Australia and overseas.

From 2007 to 2010, Jacinta worked to build Australia’s defence relationships with countries in Australia’s immediate neighbourhood, including Papua New Guinea and the Pacific islands, as well as regional partners such as Thailand, Vietnam and Cambodia. In these roles Jacinta identified priorities for defence engagement in line with strategic objectives and worked with defence stakeholders to implement activities under the Defence Cooperation Program.

Jacinta said the highlight of her time working on the program was a month-long secondment to the Australian Embassy in Bangkok where she provided specialist policy support and expertise to support Australia’s participation in regional forums, including the ASEAN Senior Officials’ Meeting.

‘Living and working in Bangkok was a fantastic opportunity to experience a different culture while working in a professional capacity, and to gain an appreciation for the work of our Defence representational staff’, Jacinta said.

In 2010, Jacinta shifted her focus to providing policy support to Australian Defence Force operations overseas. In August 2011, she deployed to the Middle East for nine months as policy adviser to Commander Joint Task Force 633. As a policy adviser, Jacinta provided advice across a range of issues affecting Australia’s military operations in Afghanistan and the Middle East.

‘My deployment to the Middle East was both challenging and immensely rewarding’, she said.

‘Working in an operational military headquarters allowed me to see how strategic-level policy decisions were implemented on the ground and the effects decisions made in Canberra had on ADF operations and individual personnel.

‘I was consistently impressed by the dedication and professionalism of the people I worked with’, Jacinta said.

The skills Jacinta has developed during her time with the International Policy Division have prepared her well for her future role as First Secretary Defence in New Delhi, which will commence in January 2015. Jacinta said she is looking forward to the next chapter of her career, which will involve liaising with officials in the Indian Ministry of Defence and the wider Indian security sector to strengthen Australia’s defence relationship with India.

Jacinta Hudson with Commander Joint Task Force 633, Major General Stuart Smith in Tarin Kot, Afghanistan

OUTCOME 1

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DEFENCE ANNUAL REPORT 2013-14 29

Program 1.2 Navy Capabilities

The Chief of Navy, Vice Admiral Tim Barrett, AO, CSC, RAN, was appointed on 1 July 2014, following the appointment of Vice Admiral Ray Griggs as VCDF. He is responsible and accountable to the CDF for the command, leadership and capability output of the Navy. He is also Defence’s principal naval adviser on strategic matters.

The Navy supports the ADF in protecting and advancing Australia’s strategic interests through the provision of maritime forces. This support ranges from maritime patrol and response, through to interdiction and strategic strike, and amphibious warfare capabilities. It includes protection of trade, shipping and offshore territories and resources. Support is provided through maritime intelligence collection and evaluation, hydrographic and oceanographic operations, and escort duties. Peacetime activities encompass not only training but also maritime surveillance and response within Australia’s offshore maritime zones. The Navy undertakes hydrographic, oceanographic and meteorological support operations, humanitarian assistance, disaster relief, and maritime search and rescue.

The Navy sustained a high tempo of operations, activities and training during 2013-14, in a context of further extensive cultural change and significant reform in many areas, especially in engineering and ship sustainment.

Overall, the Navy performed well against deliverable targets and key performance indicators, and made good progress in stabilising the materiel state of the submarine force and amphibious and afloat support vessels. Notwithstanding this pleasing achievement, Armidale class patrol boats continued to face hull maintenance challenges that had an impact on their ability to participate fully in border protection duties. Additionally, the assignment of hydrographic ships to Operation Resolute, combined with a scheduled propulsion system upgrade for the ships, limited their contribution to Hydroscheme 2013-2016, which, although substantially met, was reduced in scope for 2013-14.

While the Navy was able to substantially achieve appropriate levels of preparedness during the year, its ability to fully meet its commitments in this regard was affected by continuing reliability issues with the Armidale class patrol boats and limitations in the number of available aviation assets, due primarily to delays in the introduction of the multi-role helicopter (MRH-90).

The Navy continued progress in the delivery of the first Canberra class landing helicopter dock, the introduction of the MRH-90, delivery of the first MH-60R combat helicopters and the upgrade of the Anzac frigate fleet to make them more effective against contemporary missile threats.

In October 2013, the International Fleet Review was conducted, celebrating, in a most emphatic and successful way, the centenary of the Royal Australian Navy fleet’s first arrival in Sydney Harbour.

Defence made good progress in stabilising the materiel state of the submarine force and amphibious and afloat support vessels.

30 DEFENCE ANNUAL REPORT 2013-14

Table 3.4: Program 1.2 deliverables

Deliverable Status

Prepare, sustain and lead assigned forces to deliver capability to meet government requirements Met

Maintain preparedness of Navy capability as directed by the CDF Substantially met Not fully met due to Armidale class patrol boat

maintenance challenges, hydrographic ship propulsion system remediation work, and delay in MRH-90 helicopter initial operational capability.

Undertake joint collective training to ensure force elements are prepared for deployment and operations Met

In consultation with the Capability Development Group and the DMO, continue to plan, develop and monitor the delivery of, and transition to, new capability

Met

Provide timely, accurate and considered advice on Navy capabilities to the Government, the CDF and the Secretary Met

Deliver reform and savings without compromising agreed levels of Navy capability and safety Met

Table 3.5: Program 1.2 deliverables—Unit Ready Days (URD)

Deliverable Status

18 major combatants 3,522 URD

Met

20 minor combatants 4,477 URD

Substantially met

95 per cent met due to Armidale class patrol boat maintenance challenges.

9 amphibious and afloat support 2,047 URD

Met

7 maritime teams 2,555 URD

Met

9 hydrographic force 2,819 URD

Met

Note

URD are the aggregate number of days that constitute force elements that are available for tasking.

Table 3.6: Program 1.2 deliverables (products)

Deliverable Status

85 nautical charts Met

30 nautical publications Substantially met

29 out of a planned 30 publications were published.

1,100 maritime safety update work orders Met

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Table 3.7: Program 1.2 deliverables (flying hours)

Deliverable Status

16 S-70B-2 (Seahawks) 3,600 hrs Met

13 AS350B (Squirrels) 4,000 hrs Substantially met 90 per cent met. While not fully met, the achievement is an improvement on previous years,

reflecting enhancements to maintenance scheduling and flying program management.

6 MH-60R 600 hrs

Met

1 Laser airborne depth sounder aircraft 980 hrs

Substantially met

92 per cent met due primarily to on-task weather conditions being incompatible with airborne survey operations.

Table 3.8: Program 1.2 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF Substantially met

Not fully met due to Armidale class patrol boat maintenance challenges, hydrographic ship propulsion system remediation work and delay in MRH-90 helicopter initial operational capability.

Meet the Government’s operational requirements Met

Generate and sustain forces for each current operation Met

Achieve a level of training that maintains core skills, professional standards and baseline preparedness Substantially met The number and tempo of operational commitments affected

Navy’s ability to achieve the level of training required to maintain core skills in some areas.

Provide timely, accurate and considered advice on Navy capabilities to the Government, the CDF and the Secretary

Met

Achieve Hydroscheme 2013-2016 data and surveying tasking requirements to meet national hydrographic surveying and charting obligations

Substantially met

Assignment of hydrographic ships to Operation Resolute, combined with a scheduled propulsion system upgrade for the ships, limited their contribution to Hydroscheme.

32 DEFENCE ANNUAL REPORT 2013-14

FEATURE |

Navy celebrates centenary with international review In October 2013, the Royal Australian Navy (RAN) celebrated 100 years since first arriving in Sydney Harbour with one of the largest events held on Sydney Harbour since the 2000 Olympics.

The entry of the RAN’s first fleet on 4 October 1913, led by the Indefatigable Class Battlecruiser HMAS Australia, was an event of great significance for a young Australian nation.

Exactly 100 years later, the RAN conducted a fleet entry and ceremonial review presided over by Her Excellency the Honourable Quentin Bryce, AC, CVO, Governor-General of the Commonwealth of Australia, and accompanied by His Royal Highness Prince Henry of Wales (Prince Harry).

The week of celebrations included 37 foreign and Australian warships, 16 tall ships from five nations, more than 60 aircraft (including civilian and historic aircraft) flying over 100 individual aircraft sorties, 10 military bands and 8,000 sailors from 19 nations.

A 100-gun salute marked the official start of the ceremonial fleet review on 5 October with the Governor-General, accompanied by Prince Harry, embarked on HMAS Leeuwin. The review coincided with a Salute to Navy, featuring 29 RAN and visiting navy helicopters and a variety of fixed-wing aircraft flying as low as 500 feet (150 metres) over the ships.

That night, a fireworks and lightshow display told the 100-year story of the RAN since its arrival in Sydney Harbour. Called the International Fleet Review Spectacular, it included fireworks launched from seven RAN ships and a choreographed lightshow that was projected simultaneously onto the sails of the Sydney Opera House, the Sydney Harbour Bridge pylons and the roof of the National Maritime Museum in Darling Harbour.

The show drew an estimated one million spectators to Sydney’s harbour and foreshore with a further 2.5 million watching the live national television broadcasts on channels ABC1 and ABC24 and creating a record for ABC TV ratings. In addition, over 2.85 million hits were recorded in 79 countries worldwide on a live YouTube stream of the event. The RAN’s Indigenous Performance Group, Bungaree, performed for the first time on the steps of the Sydney Opera House during this event.

More than a dozen warships were opened to the public over a two-day period at both Garden Island and Barangaroo Wharf, with a total of 50,000 people visiting.

The Combined Navies Parade on 9 October drew an estimated 50,000 people to Sydney’s CBD to watch a contingent of 4,000 officers and sailors from participating warships, military bands and RAN veterans from associations of the ships from 1913 march along Sydney’s George Street. Additional Freedom of Entry parades were staged in Mosman and Parramatta and drew enthusiastic support.

Sailors of the Royal Australian Navy and other participating nations march through Sydney city as part of the International Fleet Review 2013.

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DEFENCE ANNUAL REPORT 2013-14 33

Program 1.3 Army Capabilities

The Chief of Army, Lieutenant General David Morrison, AO, is responsible and accountable to the CDF for the command of the Army and the management of designated joint functions. He oversees corporate policy formation within the Army and is jointly responsible and accountable to the CDF and the Secretary for the effective and efficient management of his Service. He is also Defence’s principal army adviser on strategic matters.

The Army contributes to the achievement of the Government’s defence objectives through the provision of capabilities for land, amphibious and special operations. The Army also provides capability to enhance the national domestic security response to terrorist, chemical, biological, radiological or explosive incidents among other support for national security tasks during peacetime.

Highlights during 2013-14 included the following:

• The Australian Light Armoured Vehicle Multi Spectral Surveillance Suite reached initial operational capability, an important early milestone in the delivery of a complete capability.

• A number of projects achieved their final operational capability, including additional CH-47D helicopters, artillery replacement, water purification and desalination, and the Counter Rocket Artillery Mortar/Missile.

• Several projects achieved significant equipment deliveries, including the digitisation of protected mobility vehicles, G-wagons and dismounted soldiers through the delivery of enhanced radios and battle management systems, and the delivery of 1,161 light trucks and 766 trailers.

• In response to operationally urgent requests from deployed forces to support the Middle East Area of Operation, the Army, in conjunction with the Defence Materiel Organisation, deployed weapon clamps and additional external composite armour for protected mobility vehicles, up-armoured sports utility vehicles, protected mobility ambulances and Bushmaster vehicles.

• The Army trialled an Amphibious Pre-deployment Training Program similar to the proven United States Marine Corps program. The program was validated during Exercise Talisman Sabre 2013.

• The Army continued to develop and refine its support to wounded, injured and ill personnel, and worked closely with Joint Health Command and other stakeholders, particularly in the area of mental health, to ensure that a continuum of care and support was provided to its personnel. The Army is developing regional and national-level industry partnerships to create employment and career opportunities for wounded, injured and ill personnel who separate from the Army and to address their transition in a comprehensive whole-of-life context.

• The plan to increase capability through diversity continued to raise the representation of women in the Australian Regular Army, from 11 per cent to just under 12 per cent of the permanent force at June 2014. The Army Indigenous Strategy has expanded in scope and seeks to increase Aboriginal and Torres Strait Islander representation to 2.7 per cent, in line with Australian Government targets.

• The Army continued to implement Pathway to Change through a number of programs that are focused on diversity, inclusivity and respect. These programs directly enhance capability and ensure that the organisation excels in preparing for and conducting operations in support of Australia and our national interests, while reflecting modern community standards and attitudes.

34 DEFENCE ANNUAL REPORT 2013-14

Table 3.9: Program 1.3 deliverables

Deliverable Status

Prepare, sustain and lead assigned forces to deliver capability to meet government requirements Met

Conduct force generation and force preparation and maintain preparedness of capability as directed by the CDF Met

Continue to contribute to domestic security operations Met

In consultation with Capability Development Group and the DMO, continue to plan, develop and monitor the delivery of, and transition to, new capability

Met

Provide timely, accurate and considered advice on Army capabilities to the Government, the CDF and the Secretary Met

Develop programs to increase diversity within Army’s workforce Met

Continue to improve programs that provide support for Army’s seriously wounded and ill personnel Substantially met Improvements were made in the rehabilitation of members

remaining in the ADF through the development of Soldier Recovery Centres and the Intensive Recovery Team concept, which is to be expanded further. Issues involving the processes in the Medical Employment Categorisation system and the relationships between multiple Defence, other government and non-government agencies are being addressed through a project being run by the Army Improvement Team.

Undertake joint collective training to ensure force elements are prepared for deployment Met

Deliver force generation; namely, a training continuum that unifies individual and collective training to ensure Defence elements are prepared for joint force-in-being contributions, including joint enabling activities supporting other Services/Groups

Met

Implement reform through the Adaptive Army framework, Army Continuous Modernisation Plan and the Army Plan while continuing preparation of force elements for operational commitments and contingencies (this includes the Plan Beersheba initiatives, including the forming of multi-role combat brigades, an amphibious capability and reform of the Army Reserve)

Substantially met

These are multi-year programs and continue to be monitored.

Deliver Group-specific reform and savings without compromising agreed levels of Army capability, including the revamping of Army’s governance, risk, and budgeting and performance achievement management

Met

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Table 3.10: Program 1.3 deliverables (rate of effort—flying hours)

Deliverable Status

6 CH-47D Chinook 1,850 hrs

Met

34 S-70A-9 Black Hawk 6,500 hrs

Substantially met

6,398.5 flying hours. Contingency of 300 hours, approved in November 2013, was not all used due to better than expected performance of MRH-90 Taipan.

41 B-206 Kiowa 6,400 hrs

Substantially met

5,722.3 flying hours. The underfly was due largely to lower than expected pilot recruitment and higher than normal failure rates earlier in the pilot training continuum.

22 Armed Reconnaissance Helicopter Tiger 3,360 hrs

Substantially met

3,019.3 flying hours. Tiger rate of effort improved in 2013-14, but significant further work is required by Airbus Helicopters to improve spare parts turn-around times and meet the increase in rate of effort necessary to support capability requirements.

46 multi-role helicopter (MRH-90) 4,000 hrs Substantially met 3,641.3 flying hours. MRH-90 Taipan underfly was due to delayed service release of

an aircraft configuration update and a reduced number of available aircraft. However, Taipan rate of effort continues to show steady improvement.

Table 3.11: Program 1.3 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF Met

Meet the Government’s operational requirements Met

Generate and sustain forces for each current operation Met

Achieve a level of training that maintains core skills, professional standards and baseline preparedness Met

Provide timely, accurate and considered advice on Army capabilities to the Government, CDF and the Secretary Met

36 DEFENCE ANNUAL REPORT 2013-14

PROFILE | Corporal Elena Rowland

From tsunamis to ‘stone pillows’, Corporal Rowland lends a hand Army life has provided plenty of opportunities for Corporal Elena Rowland, who enlisted into the Australian Regular Army in August 2004 as an environmental health technician in the Royal Australian Army Medical Corps. In that role, she deployed to Banda Aceh, Indonesia, in response to the Indonesian tsunami and to Fitzroy Crossing, Western Australia, as part of the Army Aboriginal Community Assistance Program.

In 2007, she represented the Australian Army in Exercise Long Look, where she was posted to many locations, including London, York, Aldershot and Edinburgh, and went on a two-week international peacekeeping exercise to Lithuania.

In 2009, Corporal Rowland transferred to the Royal Australian Army Dental Corps as a dental assistant and received the Student of Merit award on the completion of her Dental Assistants Course. At the end of 2009, she deployed to Indonesia on Operation Padang Assist in response to earthquakes. On that deployment, she received recognition for her hard work, selflessness and inspirational attitude in very hard and demanding conditions.

Following postings to Sydney and Darwin, Corporal Rowland is now posted to Brisbane. In April 2013, she set up a Facebook support page, ‘Women of the ADF’, to support women in Defence and promote her work for charities.

In 2013, Corporal Rowland pledged to stop homelessness among the veteran community and began devoting most of her spare time to organising fundraising and planning initiatives. With further research, she realised that the best way to raise awareness would be to walk in the veterans’ shoes, so she rallied others to join her sleeping on the street.

Chief of Army Scholarship recipient Corporal Elena Rowland walks along the rows of headstones at the Australian National Memorial, Villers-Bretonneux, France, on 24 April 2014

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DEFENCE ANNUAL REPORT 2013-14 37

This is now known as ‘Exercise Stone Pillow’. On 14 September 2013, Corporal Rowland, along with 25 other committed personnel, spent 24 hours on the street and managed to raise $6,000 for Mates4Mates, an organisation dedicated to providing support for ADF personnel and their families. This year, Exercise Stone Pillow will be an integral part of Veterans Health Week, held in October. Funds raised will go to Remembrance House, a refuge for homeless veterans in Brisbane.

Corporal Rowland writes poetry about her experiences in the Army and the experiences of her mates. She plans to publish an Australian Army poetry book, with 100 per cent of proceeds going to veterans in crisis, especially the homeless.

In 2012, Corporal Rowland was awarded a Chief of Army Scholarship and conducted a tour of the battlefields of France.

She was commended by the Premier of Queensland for her work with Exercise Stone Pillow and was invited to meet the Duke and Duchess of Cambridge during a state conference luncheon.

Corporal Rowland is married, has a two-year-old son, and is currently studying for a degree in social science. In what little spare time she has, she enjoys playing volleyball and netball and going fishing, bushwalking and horse-riding.

The Anzac Spirit Lives On

Closing my eyes and breathing deep,

cold air running through my veins.

As dawn approaches, the sparrows call

my heart and soul untamed.

Looking forward, looking back

the Anzac Spirit lives on.

For it’s built on the sacrifice of our men,

who fought but now are gone.

Emotions stirring deep within,

darkness fighting with the light.

For although it is a bloody past,

for our peace, these men did fight.

They fought for this, our country

and they fought for what they loved.

They kept pushing forward despite the fear,

through gas, and shells and mud.

Not only were our men at war,

but the war went home as well.

For their mums and dads and children too

were all walking this living hell.

Some men, they made it home alive

after the last post tune was played.

But some mums will wait forevermore,

their waiting all in vain ...

As the rising sun burns dawn away,

our past can rest, it’s done.

Now all that’s left to do is honour them,

the Anzac Spirit lives on.

Corporal Elena Rowland Villers-Bretonneux, France 25 April 2014

38 DEFENCE ANNUAL REPORT 2013-14

Program 1.4 Air Force Capabilities

The Chief of Air Force, Air Marshal Geoff Brown, AO, is responsible and accountable to the CDF for the command of the Air Force and delivers Air Force capability for the defence of Australia and its interests. This encompasses the effective and efficient delivery of aerospace capability, enhancing the Air Force’s reputation and positioning the Air Force for the future. He is also Defence’s principal aerospace adviser on strategic matters.

The Air Force provides air and space power for Australia’s security, and proved more than capable of responding to a wide spectrum of events in 2013-14.

The year provided a range of unique operational challenges for the Air Force, starting with the drawdown of Australian forces from Uruzgan Province in Afghanistan. C-130J and C-17A aircraft conducted up to 30 flights per week, lifting vehicles, personnel and equipment out of the country. Air Force security and base command personnel completed their final rotation providing security, infrastructure and utilities at Multinational Base Tarin Kot. In 2014, the Heron remotely piloted aircraft reached 20,000 operational flying hours since operations began in Afghanistan.

After a cyclone in the Philippines, the Air Force was called upon to transport emergency personnel from Australia to the devastated region, as well as cyclone-affected passengers within the Philippines. At the request of the United Nations, the Air Force helped deliver much-needed aid to South Sudan in the midst of a civil war. The disappearance of Malaysia Airlines flight MH370 resulted in Australia’s largest maritime search off the west coast of Australia, where AP-3C Orions and an E-7A Wedgetail were at the forefront of the international search effort.

Despite constant operational demands, the Air Force continued its demanding exercise and training schedule at home and abroad. During exercises such as the East Coast Air Defence Exercise, Aces North and Red Flag, F/A-18A/B Hornets and F/A-18F Super Hornets flew more than 15,000 training hours in the skies above Australia and the United States.

Air Force people continued to perform with dedication and integrity, which earned them a host of Australia Day honours and international commendations for their efforts at home and abroad. The Air Force intelligence community celebrated its 50th anniversary at RAAF Base Edinburgh.

The 2013-14 financial year included a number of developments in future capability:

• The Government announced that a combination of P-8A Poseidon and MQ-4C Triton unmanned aerial systems will replace the AP-3C Orion.

• Australia’s commitment to the Joint Strike Fighter Project continued. At least 72 F-35A Lightning II aircraft will eventually enter RAAF service.

• In Italy, the first RAAF C-27J Spartan launched on its maiden flight.

• The first RAAF pilot flew an EA-18G Growler in the United States.

• The first two RAAF pilots for the F-35A were announced at the Centenary of Military Aviation Air Show (see feature article following Table 3.14).

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Table 3.12: Program 1.4 deliverables

Deliverable Status

Prepare, sustain and lead assigned forces in operations to deliver capability to meet government requirements Met

Provide air power options for the Government by meeting directed preparedness requirements while minimising resource expenditure

Substantially met

Mitigation strategies are in place and resources are available to address the shortfalls.

In consultation with the Capability Development Group and the DMO, continue to plan, develop and monitor the delivery of, and transition to, new capability

Met

Provide timely, accurate and considered advice on Air Force capabilities to the Government, the CDF and the Secretary Met

Engage with Government, the public, international partners, Defence Groups, industry, other stakeholders and Air Force members to maximise achievement of all outputs

Met

Deliver reform, including resource management and cultural change, without compromising capability, safety or airworthiness

Substantially met

Significant progress has been made in implementing the New Horizon program, which has some long-term cultural reform goals that are in the early stages of being realised.

Table 3.13: Program 1.4 deliverables (flying hours)

Deliverable Status

63 PC-9 17,852 hrs

Substantially met

84 per cent achieved (15,003.1 hrs). Underachievement was due to reduced student throughput at Number 2 Flying Training School, reduced qualified flying instructor numbers at Central Flying School, reduced public relations activities for the Roulettes, and sustainment funding pressures.

16 B300 King Air 350 11,400 hrs Substantially met 87.9 per cent achieved (10,022.6 hrs). Underachievement was due to fleet-wide structural

inspections and repairs, which affected operations for three weeks, and sustainment funding pressures.

12 C-130J Hercules 7,350 hrs Met

6 C-17 Globemaster III 5,200 hrs Met

5 KC-30A 3,100 hrs

Partially met

80.8 per cent achieved (2,505 hrs). Underachievement was due to reduced aircraft availability caused by the allocation of two aircraft to refuelling boom testing in Spain, hail damage, and continuing modification programs necessary to achieve final operational capability.

2 B737 BBJ 1,600 hrs

Substantially met

85.7 per cent achieved (1,370.6 hrs). Underachievement was due to BBJ heavy maintenance schedule, resulting in reduced aircraft availability.

3 CL-604 Challenger 2,403 hrs Substantially met 86.1 per cent achieved (2,068.3 hrs). Underachievement was due to 2013 election tasking being

less than planned.

40 DEFENCE ANNUAL REPORT 2013-14

Deliverable Status

18 P-3 Orion 7,900 hrs

Met

6 E-7A Wedgetail 3,600 hrs

Substantially met

86.3 per cent achieved (3,107.7 hrs). Reduced flying hours were due to operational, test and evaluation activities to support progression to final operational capability. Current qualified crew numbers were fewer than final operational capability crew numbers, upon which the 3,600 hrs deliverable was based.

71 F/A-18A/B Hornet 13,000 hrs Substantially met 91.9 per cent achieved (11,941.6 hrs). Full flying hours achievement was not accomplished due to

a combination of training commitments, low student numbers and adjustments to remain within sustainment funding, and the need to manage aircraft fatigue through to the planned withdrawal of the Hornet.

24 F/A-18F Super Hornet 4,800 hrs

Substantially met

91 per cent achieved (4,369.1 hrs). Underachievement was due primarily to two significant periods of runway works at RAAF Base Amberley, and a temporary reduction of flying hours to support aircraft maintenance remediation.

33 Hawk 127 7,500 hrs

Substantially met

83.2 per cent achieved (6,241.9 hrs). Underachievement was due to a reduced student throughput, lower availability of qualified flying instructors, and late-notice cancellation of ADF support tasks.

Table 3.14: Program 1.4 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF Substantially met

The Air Force did not meet all directed preparedness requirements. Mitigation strategies are in place and resources are available to address the shortfalls.

Meet the Government’s operational requirements Met

Generate and sustain forces for each current operation Met

Achieve a level of training that maintains core skills, professional standards and baseline preparedness Substantially met The Air Force did not achieve all the training targets to meet

directed preparedness requirements. Mitigation strategies are in place and resources are available to address the shortfalls.

Provide timely, accurate and considered advice on Air Force capabilities to the Government, the CDF and the Secretary

Met

Table 3.13 (continued)

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FEATURE |

First RAAF pilots to fly fifth generation aircraft The first two Australian pilots selected to undergo F-35A training in the United States were announced this year by the Deputy Chief of Air Force, Air Vice Marshal Gavin (Leo) Davies.

The pilots will be trained to fly the F-35A Lightning II, commonly known as the Joint Strike Fighter.

Speaking in February at the home of Australian military aviation in Point Cook, Victoria, Air Vice Marshal Davies said the training represented an important milestone towards introducing the F-35A into Royal Australian Air Force (RAAF) service.

‘It is fitting to announce the future of this capability here at Point Cook, where military aviation in Australia was born’, he said.

‘Our history is important, and these two pilots will make history as they become our first pilots to fly this fifth generation aircraft.

‘Not only do they represent the future of the RAAF, they will have an important leadership and training role as future instructors for the F-35A’, Air Vice Marshal Davies said.

Squadron leaders Andrew Jackson and David Bell, currently based at RAAF Base Williamtown in New South Wales, were selected for their operational flying skills, extensive experience and leadership. They will soon travel to the United States to commence their training.

‘The F-35A will provide us with an incredible air combat capability. I’m excited to be given the opportunity to take a leading role in its introduction’, said Squadron Leader Jackson, who is a qualified fighter combat instructor.

Squadron Leader Bell, a qualified test pilot, was equally impressed by the opportunity.

‘This aircraft gives fighter pilots a level of situational awareness that far exceeds legacy platforms. It will be an honour to work alongside

the US Air Force and to be at the leading edge of delivering the F-35A to Australia’, he said.

Australia has committed to 72 F-35A aircraft comprising three operational squadrons: two at RAAF Base Williamtown and one at RAAF Base Tindal. In addition, a training squadron will be based at RAAF Base Williamtown.

The RAAF’s first F-35A was handed over in the United States in July 2014 and the first F-35A aircraft will arrive in Australia in 2018. The first squadron, Number 3 Squadron, will be operational in 2021 and all 72 aircraft are expected to be fully operational by 2023.

In the future, a fourth operational squadron will be considered for RAAF Base Amberley, making a total of about 100 F-35A aircraft.

The first RAAF pilots selected to fly the F-35A Lightning II, squadron leaders Andrew Jackson (left) and David Bell, in front of an F-35A Lightning II mock-up

42 DEFENCE ANNUAL REPORT 2013-14

Program 1.5 Intelligence Capabilities

The Deputy Secretary Intelligence and Security, Mr Stephen Meekin, oversees the activities of the three Defence intelligence agencies—the Australian Geospatial-Intelligence Organisation, the Defence Intelligence Organisation and the Australian Signals Directorate—and the Defence Security Authority including the Australian Government Security Vetting Agency.

During 2013-14, the Intelligence and Security Group met the majority of its deliverables and continued to deliver timely intelligence.

Of particular note was the key role the Australian Geospatial-Intelligence Organisation played in supporting the international search for Malaysia Airlines flight MH370 in the southern Indian Ocean.

The Defence Security Authority began developing a security risk management governance framework, which will embed a risk-based approach to security within Defence. The new framework will strengthen Defence’s approach to security by formalising the reporting of security risks and guiding the application of security risk management across Defence management. The authority is streamlining the vetting process and implementing business efficiencies to reduce the gap between vetting capacity and demand.

The Cyber Security Operations Centre contributed to addressing the cyber security threat. Hosted at the Australian Signals Directorate, the centre continued to work closely within Defence and with other government agencies to ensure that Australia is both protected against emerging cyber threats and adequately positioned to meet the Government’s requirement to implement the Top 4 Strategies to Mitigate Targeted Cyber Intrusions—a new mandatory requirement in 2013 under the Financial Management and Accountability Act 1997.

The Australian Signals Directorate established a dedicated team to engage actively with Commonwealth, state and territory governments to enhance their cyber security posture through threat assessments, security alerts, and guidance and defensive measures; revision of the Australian Government Information Security Manual; and vulnerability assessments.

The Group continued to play an active role in ADF operations and exercises.

The Group placed significant emphasis on ensuring that its activities were compliant with the Intelligence Services Act 2001 and other relevant legislation. This was achieved through mandatory and comprehensive training and regular liaison with the Office of the Inspector-General of Intelligence and Security.

The Group maintained strong and effective international relationships, cooperating closely with its international intelligence and security partners. Defence intelligence collection and assessments are valued by the Group’s international partners.

The Foreign Language Directive, released in April 2014, provides strategic policy direction for the management of Defence’s foreign language capability, including foreign language training and testing of Defence personnel, management and administration of claimed and self-claimed language skilled Defence personnel, and governance and review of Defence’s foreign language capability.

The Group continued its recruitment and retention strategies to ensure that skilled and experienced ADF and APS personnel were available. These strategies include targeted university recruitment drives, recruitment of graduates through the Intelligence and Security Development Program, incentives for staff with specific language and technical talents, and enhanced use of online recruitment tools.

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Table 3.15: Program 1.5 deliverables

Deliverable Status

Provide timely, accurate and high-quality intelligence and security support in accordance with government priorities to support the ADF, policy and wider security operations

Met

Deliver enhanced capabilities to better exploit next generation technologies, improve intelligence assessment, and enhance the security of the Government’s information

Met

Provide advice and assistance to the Government on the security and integrity of electronic information, cryptography and communications technology

Met

Meet the Australian Government Security Vetting Agency’s key performance results as specified in the agency’s Service Level Charter

Partially met

The agency met three of the four key performance indicators. The agency did not meet 45 per cent of KPI 1—‘meet clearance benchmarks in 95 per cent of cases’—largely due to reform activities and problematic incorporation of a new ICT system.

Strengthen the management framework of the Australian Government Security Vetting Agency Met

Provide management and strategic direction for Defence’s foreign language capability Met

Ensure the effectiveness of the intelligence and security governance and compliance framework Met

Strengthen the workforce through targeted recruitment, retention and training initiatives Met

Ensure effective and efficient transfer of expertise, capabilities and intelligence across key international partnerships, and strengthen collaboration with national agencies

Met

Contribute to reform outcomes Met

Table 3.16: Program 1.5 key performance indicators

Key performance indicator Status

Deliver intelligence and security services to meet Defence and government requirements Met

Develop next generation intelligence, geospatial and security assessment capabilities including Geoint, Sigint and Cyber

Met

Strengthen the approach to security across Defence and government Substantially met The Defence Security Authority is streamlining the vetting process and

implementing business efficiencies in order to reduce the gap between vetting capacity and demand. This will allow a focus on the revalidation backlog, which will strengthen security across government by reducing personnel security risk.

Deliver strategic guidance and management support to meet Defence’s foreign language requirements

Met

Achieve best practice in governance and compliance Met

Ensure that the intelligence and security workforce is developed and skilled Met

Deliver intelligence capability dividends through international and national partnerships Met

44 DEFENCE ANNUAL REPORT 2013-14

Chief Operating Officer overview

The Associate Secretary and Chief Operating Officer (COO), Mr Brendan Sargeant, is responsible for strategic reform, support and policy advice to Defence. The role integrates the work of different parts of Defence to get more effective and efficient outcomes, particularly in the areas of service delivery.

The COO area consists of the Defence Support and Reform Group (Program 1.6), the Chief Information Officer Group (Program 1.7) and the Defence People Group (Program 1.8). The Reform and Corporate Services Division and the Defence Legal Division sit under Program 1.6 and report directly to the COO.

These Groups create and sustain the environment within which the people of Defence live and work. They do this separately and in combination by mobilising internal and external resources.

The core purpose of the COO is to orchestrate service delivery for the Defence organisation as a whole. This work is focused on ensuring that Defence can deliver its required outcomes and is exercised through:

• providing effective and efficient enabling services (including policy services)

• establishing standards and monitoring service delivery performance

• managing the Defence Corporate Plan, Defence Annual Plan, Strategic Risk Framework and organisational performance reporting system

• coordinating enterprise reform

• providing coordinated and substantive advice to the Defence ministers, the Secretary and the Chief of the Defence Force, offering practical, cost-effective approaches to fulfil the Government’s defence responsibilities.

In 2013-14, a total of 7,029 submissions and items of correspondence were completed in support of Defence’s ministerial team. Defence brought forward 38 cabinet submissions, memorandums and briefings to Cabinet and the National Security Committee of Cabinet for consideration. The minister was provided with 310 briefings on Defence’s and other departments’ submissions to Cabinet meetings.

Further information on reform is available in Chapter 6, Reform and cultural change.

Table 3.17: Chief Operating Officer deliverables

Deliverable Status

Oversee, integrate and coordinate reforms Met

Ensure that policy advice provided to the Government is accurate, timely and responsive, and offers practical and cost-effective approaches to fulfil the Government’s defence responsibilities Met

Promote and protect Defence’s reputation by increasing public awareness of Defence activities and achievements and strengthening Defence capabilities in media-related activities Met

Provide overarching strategic guidance, policy and supporting plans to implement the recommendations of the reviews into the culture of the ADF and Defence. Resourcing of individual initiatives in support of Pathway to Change comes from the individual Groups and Services, as appropriate

Met

Table 3.18: Chief Operating Officer key performance indicators

Key performance indicator Status

The ministers are satisfied with the timeliness and quality of advice, including Cabinet documentation, provided by the department

Substantially met

While overall timings were met, on occasion Question Time briefs were provided after the time nominated by the minister’s office.

Defence Cabinet submission processes have been revised to improve the timeliness of Cabinet submissions provided to the minister for agreement.

DEFENCE NEWSPAPERS DISTRIBUTED

THE DEFENCE

MEDIA 4,612

A TOTAL OF

& MAGS READ ONLINE

227 34,000

INQUIRIES

1 MILLION COPIES OF

RELEASES &

video WEB CLIPS were PRODUCED AND PUBLISHED

MORE

ALERTS distributed

IMAGE GALLERY WAS VISITED

INcreasing public awareness of defence activities

THAN

MORE THAN

185,400 NEWSPAPERS

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DEFENCE ANNUAL REPORT 2013-14 45

Chief Operating Officer overview

The Associate Secretary and Chief Operating Officer (COO), Mr Brendan Sargeant, is responsible for strategic reform, support and policy advice to Defence. The role integrates the work of different parts of Defence to get more effective and efficient outcomes, particularly in the areas of service delivery.

The COO area consists of the Defence Support and Reform Group (Program 1.6), the Chief Information Officer Group (Program 1.7) and the Defence People Group (Program 1.8). The Reform and Corporate Services Division and the Defence Legal Division sit under Program 1.6 and report directly to the COO.

These Groups create and sustain the environment within which the people of Defence live and work. They do this separately and in combination by mobilising internal and external resources.

The core purpose of the COO is to orchestrate service delivery for the Defence organisation as a whole. This work is focused on ensuring that Defence can deliver its required outcomes and is exercised through:

• providing effective and efficient enabling services (including policy services)

• establishing standards and monitoring service delivery performance

• managing the Defence Corporate Plan, Defence Annual Plan, Strategic Risk Framework and organisational performance reporting system

• coordinating enterprise reform

• providing coordinated and substantive advice to the Defence ministers, the Secretary and the Chief of the Defence Force, offering practical, cost-effective approaches to fulfil the Government’s defence responsibilities.

In 2013-14, a total of 7,029 submissions and items of correspondence were completed in support of Defence’s ministerial team. Defence brought forward 38 cabinet submissions, memorandums and briefings to Cabinet and the National Security Committee of Cabinet for consideration. The minister was provided with 310 briefings on Defence’s and other departments’ submissions to Cabinet meetings.

Further information on reform is available in Chapter 6, Reform and cultural change.

Table 3.17: Chief Operating Officer deliverables

Deliverable Status

Oversee, integrate and coordinate reforms Met

Ensure that policy advice provided to the Government is accurate, timely and responsive, and offers practical and cost-effective approaches to fulfil the Government’s defence responsibilities Met

Promote and protect Defence’s reputation by increasing public awareness of Defence activities and achievements and strengthening Defence capabilities in media-related activities Met

Provide overarching strategic guidance, policy and supporting plans to implement the recommendations of the reviews into the culture of the ADF and Defence. Resourcing of individual initiatives in support of Pathway to Change comes from the individual Groups and Services, as appropriate

Met

Table 3.18: Chief Operating Officer key performance indicators

Key performance indicator Status

The ministers are satisfied with the timeliness and quality of advice, including Cabinet documentation, provided by the department

Substantially met

While overall timings were met, on occasion Question Time briefs were provided after the time nominated by the minister’s office.

Defence Cabinet submission processes have been revised to improve the timeliness of Cabinet submissions provided to the minister for agreement.

DEFENCE NEWSPAPERS DISTRIBUTED

THE DEFENCE

MEDIA 4,612

A TOTAL OF

& MAGS READ ONLINE

227 34,000

INQUIRIES

1 MILLION COPIES OF

RELEASES &

video WEB CLIPS were PRODUCED AND PUBLISHED

MORE

ALERTS distributed

IMAGE GALLERY WAS VISITED

INcreasing public awareness of defence activities

THAN

MORE THAN

185,400 NEWSPAPERS

46 DEFENCE ANNUAL REPORT 2013-14

Program 1.6 Chief Operating Officer—Defence Support and Reform

The Deputy Secretary Defence Support and Reform, Mr Steve Grzeskowiak, is responsible for delivering an agreed range of base infrastructure and corporate services that are fundamental to generating defence capability and preparedness.

In 2013-14, in consultation with stakeholders about priorities, the Group delivered a broad range of garrison and other base support services, achieving efficiencies and effectiveness in current contracts. Service provision included living and working accommodation for the annual rotation of 1,100 United States Marines and their equipment in northern Australia.

As part of the Australia-wide base services retender, the Group is progressively moving towards the standardisation of requirements across the Defence estate and the various products and services it delivers, while being responsive to Defence priorities. The retender project experienced delays due to the size, scope and complexity of base services contracts. The first five contracts were signed in July 2014 and the remaining contracts were signed in August 2014.

Reform activities initiated in 2012-13 achieved positive results. Travel reform resulted in increased use of the lowest fare of the day where possible, and a new relocations model delivered an annualised cost saving in Defence removals of approximately $3.4 million.

The Group has managed, developed and sustained the Defence estate to support current and future defence capability. More information on the Capital Facilities Program performance is included in Chapter 11 and Appendix A.

Legal highlights in 2013-14 included the following:

• Defence legal officers provided legal advice, services and assistance in the Middle East and South Sudan, as well as to other domestic, regional and minor ADF operations and exercises. This included advice and support to commanders on a range of international and domestic legal issues that affected the conduct of operations and exercises. There was also liaison with the International Committee for the Red Cross about best practice for the conduct of certain types of military activities in conflict zones.

• The legal support included support to ministers, the Government and Defence senior leaders, advocacy services for members, and support to ensure lawful functioning of the ADF military discipline and administrative systems.

• Defence legal officers assisted with Defence’s support to the Defence Abuse Response Taskforce and the Royal Commission into Institutional Responses to Child Sexual Abuse.

Service provision included living and working accommodation for the annual rotation of 1,100 United States Marines in northern Australia.

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DEFENCE ANNUAL REPORT 2013-14 47

Table 3.19: Program 1.6 deliverables

Deliverable Status

Ensuring that Defence Ministers, CDF, Secretary and Government are provided with quality and timely advice and support to enable them to carry out their duties efficiently

Substantially met

Not all advice was as timely as it should have been.

Provision of high-level integration, coordination, reporting and oversight of the Strategic Reform Program

Substantially met

In September 2013, the former Minister for Defence agreed to the new Strategic Reform Operating Model to replace the Strategic Reform Program. The Defence Strategic Reform Benefits Framework requires Defence to adopt a benefits realisation model for the design, implementation, monitoring and measurement of existing and future strategic reform activities.

Ensure that Defence input to Cabinet and the National Security Committee of Cabinet is timely, relevant and appropriately robust

Substantially met

Defence Cabinet submission processes were revised to meet the requirements of the new Government and minister.

Promote and protect Defence’s reputation by increasing public awareness of Defence activities and achievements and strengthen Defence capabilities in media-related activities

Met

Ensure that Defence complies fully with its obligations under the Archives and Freedom of Information Acts, including the pro-disclosure and accessibility requirements of the Information Publication Scheme

Substantially met

Defence has complied with the requirements of the Archives and Freedom of Information Acts. Defence’s Information Publication Scheme is currently being reviewed and updated.

Provision of specialist legal support to Defence and legal support for ADF operations

Met

Continue to implement reforms to the Military Justice System Substantially met Defence is pursuing reforms to the military discipline and administrative systems

as part of recent external and internal cultural and military justice reviews.

Policy work continues on proposed amendments to the Defence Act 1903 and the Defence Force Discipline Act 1982 to modernise the military justice system. The amendments will enhance the independence and expand the functions of the Inspector General of the Australian Defence Force (IGADF), as well as making changes to disciplinary, complaints and administrative processes.

Formulation of concept, policy, legislation and procedure for the Defence legislative program, including a new Chapter III military court

Substantially met

The Military Court of Australia Bill (and related Bills) lapsed on the prorogation of Parliament on 5 August 2013. The interim arrangements for courts-martial and Defence Force magistrate trials remain in place. Policy work continues to update the powers of Defence investigators who are investigating military offences. Legislative and regulatory change is being pursued to introduce a dedicated set of IGADF regulations, and to modernise and simplify the Defence Force Regulations 1952, the Defence (Inquiry) Regulations 1985, and the Defence (Personnel) Regulations 2002.

48 DEFENCE ANNUAL REPORT 2013-14

Deliverable Status

Formulation of possible alternative approaches to internal fact-finding and inquiry processes across Defence

Substantially met

Defence concluded Rethinking Systems of Inquiry, Investigation, Review and Audit within Defence—a comprehensive review into existing internal fact-finding, inquiry, investigation and audit processes. Key changes include a restructure of the ADF’s investigative and internal complaint management resources, as well as amendments to related policies and inquiry practices. The completion date for the implementation is 30 June 2015.

Flexible and simple internal fact-finding and inquiry processes will support fair, timely and cost-effective decisions.

Continue to drive reform and improve business outcomes in areas including non-materiel procurement, estate shared services and base support

Partially met

The focus has been on the base services retender, which aims to introduce long-term reforms within the current business lines of estate maintenance and garrison support. The rollout of the new contracts is scheduled for completion by the end of 2014.

Improved business outcomes in base support delivery will be achieved through the implementation of service-level partnering agreements with each of the Services and Groups. The agreements are planned to be completed by the end of 2014.

Provision of non-materiel procurement and contracting advice and support, and continuation of the improvement of procurement practices across Defence

Met

Provision of nationally delivered whole-of-Defence corporate services, including stationery, printing and publishing, library services and travel

Met

Provision of garrison and other base support services to support Defence bases and establishments throughout Australia, including annual rotations of United States Marine Corps to northern Australia

Met

Implementation of Defence Support and Reform Group elements of the Base Security Improvement Program

Substantially met

Of the 33 recommendations, 31 have been completed. The final two are well advanced and are linked to longer term projects involving security-related base infrastructure works and the identification, search and seizure regime at key facilities. Expected completion is on track for mid-2015.

Maintain single service, joint, combined and coalition capability by providing range control and estate development services and coordinating support to major domestic operations and exercises

Substantially met

The Group maintains range control services at all training areas and ranges managed by the Group to support single service, joint and combined training activities. Forecast improvements to the program of works and maintenance will better support the ageing training estate.

Support domestic response capabilities through Joint Operations Support Staff services, including internal and inter-departmental engagement for Defence Assistance to the Civil Community and Defence Force Aid to the Civil Authority

Met

Table 3.19 (continued)

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DEFENCE ANNUAL REPORT 2013-14 49

Deliverable Status

Manage, develop and sustain the Defence estate to meet Defence and government requirements by developing and delivering major estate and environment programs on time, to budget and compliant with the Work Health and Safety Act 2011, Environment Protection and Biodiversity Conservation Act 1999 and other statutory requirements

Substantially met

The Group continues to deliver the major capital facilities program, the facilities lease program and the property disposal program. The program of activity remains responsive to budget and scope changes. In delivering the program, areas of non-compliance are being addressed as they are identified.

Deliver estate priorities identified in the 2013 Defence White Paper Met

Deliver the estate investment program, the 2013-14 Major Capital Facilities Program

Substantially met

The 2013-14 Major Capital Facilities Program achieved its expenditure target, delivering $1.286 billion of capital facilities projects. Some projects were affected by schedule delays; however, the overall impact to future and current operational capability is considered to be minimal.

Deliver an estate strategic planning document to improve estate planning outcomes and prioritise estate investment decisions to support current and future capability

Met

Promote and manage Defence’s environmental stewardship obligations as outlined in the Defence Environmental Strategic Plan 2010-2014

Met

Enhance Defence’s governance framework through clearer authority and accountability and more rigorous performance management, risk management, assurance and audit processes[1]

Substantially met

More rigorous risk and performance reporting was instituted through the Defence Annual Plan and the Defence Enterprise Report, providing stronger alignment between the enterprise priorities, material risks and the internal audit work program.

Align Defence’s corporate, enterprise risk and strategic planning functions, including through Defence’s annual and corporate plans

Substantially met

Enhancement of the Enterprise Management System focused on improving the quality of enterprise reporting against the annual plan and a refresh of the Defence Corporate Plan 2012-17 to align enterprise priorities with current financial guidance.

Ensure that Defence’s corporate strategy aligns with government direction and priorities, including fiscal policy

Partially met

More improvements are required to fully align strategy, planning and resource allocation. This work will continue as a priority in 2014-15 in line with the development of the Defence White Paper 2015, the First Principles Review and the implementation of the Public Governance, Performance and Accountability Act 2013.

Development of the Defence Information Management Strategy and a subordinate Information Management Plan to progress the development of an information management capability across Defence

Substantially met

The Defence Information Management Strategy was approved by the Defence Committee in March 2014. The Information Management Plan is currently being developed.

Table 3.19 (continued)

50 DEFENCE ANNUAL REPORT 2013-14

Table 3.20: Program 1.6 key performance indicators

Key performance indicator Status

Improve business outcomes as part of broader Defence reform, including ongoing implementation of an enhanced enterprise planning system and the revised responsibilities and accountabilities for base support

Partially met

The Group continues to reform its service delivery, standardising and providing consistent services, and improving contract management. Reform has occurred in business lines such as removals and hospitality and catering.

The base services retender, although incurring some slippage, is scheduled to transition to all successful tenderers by the end of 2014, delivering supply-side efficiencies in service delivery, a rationalisation of the number of contracts and improved competitive tension between contractors.

The Ministers are satisfied with the timeliness and quality of advice, including Cabinet documentation, provided by the Department

Substantially met

On occasion Question Time briefs were provided after the nominated time required by the minister’s office.

Defence Cabinet submission processes have been revised to improve timeliness.

Deliver products and services on time and on budget to support the development and delivery of Defence capability

Met

Develop industry engagement and collaborative relationships to ensure the effective and efficient delivery of products and services

Met

Provide ADF members with high-quality service residences, relocation and travel services using cost-effective and robust contract arrangements

Met

Manage, develop and sustain the Defence estate to meet Defence and government requirements by developing and delivering major estate and environment programs on time, to budget and compliant with all appropriate regulatory requirements

Substantially met

The program of activity remains responsive to budget and scope changes. In delivering the program, identified areas of non-compliance are being addressed as they are identified.

Maintain a robust liaison network with inter-departmental and internal agencies to prepare for domestic response operations

Met

Support ADF operational capability, including through the deployment of ADF lawyers to provide access to relevant and timely legal support

Met

The Defence Information Management Strategy is developed and endorsed, the first iteration of the Defence Information Management Plan is developed and endorsed, and implementation is underway

Substantially met

The Defence Information Management Strategy was approved by the Defence Committee in March 2014. The Information Management Plan is currently being developed.

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DEFENCE ANNUAL REPORT 2013-14 51

Program 1.7 Chief Operating Officer—Chief Information Officer

The Chief Information Officer, Dr Peter Lawrence, is responsible for ensuring that Defence has dependable, secure and integrated information and communications technology (ICT) to support Defence business and military operations.

A major component of Defence’s ICT capabilities is the Defence Single Information Environment, which encompasses:

• Defence’s computing and communications infrastructure, along with the management systems and people that deliver this infrastructure (which includes the computing networks, business applications and the data that they generate and carry)

• Defence’s communication standards and spectrum required for battlespace networks • the ICT infrastructure that supports Defence intelligence, surveillance, reconnaissance, communications, information warfare, logistics, command and management.

The Group is undertaking a large-scale transformation program that will simplify, standardise and modernise Defence’s ICT capability in order to support the integration of future technologies, and ensure the longevity of Defence ICT capability into the future. The following major transformation programs and projects will deliver a more productive, secure and cost-effective ICT capability to support Defence business and military operations: • Terrestrial Communications • Centralised Processing • Next Generation Desktop • IT Service Management Transformation • Standalone Network Remediation • JP 2080 Phase 2B.1—Defence One (Defence’s new human resource and payroll system).

Key achievements during 2013-14 were:

• The Terrestrial Communications project has begun transforming Defence’s telecommunication networks, including better integrating fixed telecommunications with satellite and tactical networks. The project has completed facility audits of more than 240 sites across Defence.

• In May 2014, a preferred tenderer was selected to deliver the Centralised Processing Project to Defence. The project will consolidate Defence’s applications and associated ICT infrastructure from 280 data centres to 11 domestic and three international centres.

• The Next Generation Desktop project began the upgrade of the Defence Secret Network. Forty-four per cent of Defence Secret Network users have been migrated to the Next Generation Desktop environment. The project is the largest upgrade to the Defence Secret and Restricted Networks in a decade.

• The consolidation of services in accordance with the ICT Shared Services Program continued. The IT service management, assurance compliance and improvement, technical services, commercial services and asset management reforms were endorsed by the Chief Information Officer Group Executive. The review, approval and consolidation of the remaining ICT streams are underway.

• JP 2080 Phase 2B.1—Defence One launched the PMKeyS Self-Service Home Portal in February. This capability allows Defence employees who do not have direct access to the Defence Restricted Network to access various aspects of PMKeyS. The project will deliver an enterprise-wide human resource management system that will combine ADF and APS payroll into one system for the first time.

• In conjunction with the Intelligence and Security Group, the Chief Information Officer Group has established a joint mentoring program. The program encourages employees from both Groups to establish longstanding mentoring relationships and encourages staff development

• The Group continued to evolve the sharing and collaboration framework with our Five Eyes partners.

52 DEFENCE ANNUAL REPORT 2013-14

Table 3.21: Program 1.7 deliverables

Deliverable Status

Support to military operations:

• maintain support to ADF operations through the provision of agreed ICT support, the delivery of network defensive operations, and the maintenance of a disaster recovery capability

Met

The ICT reform projects, including security and the realisation of the Single Information Environment (SIE): • the Defence ICT reform projects are the principal vehicle for the management and delivery of the Defence ICT Strategy. The ICT Reform

Program is building an improved SIE and governance framework that can effectively support Defence war fighting and business reform objectives through to 2030. The reform projects including Centralised Processing, Terrestrial Communications, Next Generation Desktop and Defence’s new HR and payroll system (JP 2080 Phase 2B.1—Defence One) will ensure Defence ICT support for military and civilian customers now, and into the future

Partially met

The Centralised Processing and JP 2080 Phase 2B.1—Defence One projects have both experienced schedule delays.

ICT security remains short of where we need it.

Maintenance of essential business-as-usual (BAU) ICT operations and services: • continue to support BAU ICT operations and services which include communication lines, data centres, software licences, provision of work stations, help desk services, printers, faxes and phones • continue to plan and implement ICT shared services • deliver ICT services in accordance with the Defence ICT Services Delivery

Charter and maintain the integrity and security of the Defence SIE

Met

Approved Defence Capability Plan, Major Capital Facilities, and other approved projects and system enhancements:

• to deliver the ICT elements of endorsed projects and system enhancements and ICT work plans developed through regular engagement with customer representatives

Substantially met

The Terrestrial Communications project experienced some schedule slippages.

Table 3.22: Program 1.7 key performance indicators

Key performance indicator Status

ICT capabilities are developed and sustained in accordance with agreed stakeholder priorities Substantially met Some capabilities were unable to be met due to resource constraints.

Strategic investment in consolidated networks, infrastructure, service-oriented architecture, applications and information management enables transition to a SIE

Partially met

The Infrastructure Transformation Program was established to manage overlaps, dependencies and constraints of Defence’s key ICT reform projects.

To date, 44 per cent of Defence Secret Network users have been migrated to the Next Generation Desktop environment.

ICT security is maintained to an appropriate level Partially met

Partial implementation of the Australian Signals Directorate’s top four mitigations was achieved in 2013-14.

ICT shared services reforms are effective in reducing costs and increasing productivity across Defence

Substantially met

Reforms continue in accordance with the Defence shared services agenda.

ICT services and service support are delivered in accordance with the Defence ICT Services Delivery Charter and the Defence ICT Services Catalogue

Met

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DEFENCE ANNUAL REPORT 2013-14 53

PROFILE | Aiyaswami Mohan

Driving Defence’s information and communications technology Aiyaswami Mohan (known as Mohan) commenced the role of Chief Technology Officer in June 2014 giving him responsibility for the Defence Information and Communications Technology strategy, technology roadmaps, architecture, and delivery of ICT systems and applications in line with Defence’s goals and strategies. He also leads the Group Commercial function in the Chief Information Officer Group, and as the Chief Information Security Officer he also manages and governs the information security landscape.

As Chief Technology Officer, Mohan provides guidance and support to Defence on projects of strategic significance, promoting technology awareness and competence throughout the organisation. He ensures applications are built and integrated in line with the architecture for applications and infrastructure, which is aligned with the Single Information Environment objective.

He has a Bachelor of Engineering with training in the areas of technologies, leadership, and financial and project management.

Before joining the Australian Public Service, Mohan enjoyed a long career in the private sector ICT industry working for Toll Group, Optus, Satyam Computers, Coles Myer, Mercator Software, Haltek and Citicorp India.

In his first job as a software engineer, he led a technical team that implemented the automated passenger reservation system for Indian Railways, which was voted Project of the Century. He has held several roles since then, in all areas of information technology. Mohan conceived, developed and implemented groundbreaking technology products and solutions as part of his roles at Haltek, HiServ, Mercator and Satyam.

He led the enterprise integration function at Coles Myer during its transformation program and the enterprise architecture transition program for Optus. More recently, Mohan was responsible for all aspects of ICT strategy, enterprise architecture, technology innovation and planning for Toll Group (an Australia-based global logistics company) including leading the Toll Group’s information security and risk management.

He said he was looking forward to using his previous experience to improve the ICT capability the Chief Information Officer Group provides for Defence.

Mohan is married with one daughter. A true sports enthusiast, he likes to watch the cricket and AFL and enjoys a game of tennis. He also loves to cook curries, and enjoys watching movies and reading books in his mother tongue (Tamil) and spending time with his family.

54 DEFENCE ANNUAL REPORT 2013-14

Program 1.8 Chief Operating Officer—Defence People

The Deputy Secretary Defence People, Ms Rebecca Skinner, is responsible for the delivery of sustainable people capability to support Defence’s key outcomes, and leading workforce and shared services reform in the human resource function across the organisation.

People are fundamental to Defence capability. Defence seeks to ensure the delivery of the right mix of ADF, APS and contracted personnel with appropriate skills and commitment. In 2013-14, the Defence People Group’s primary objective was to continue to deliver a sustainable and agile people capability to support the achievement of Defence’s outcomes to deliver shared services in the human resources function for the APS workforce, and to coordinate and implement cultural reform across the organisation.

During 2013-14, the two key initiatives to manage and develop Defence APS employees—the APS Core Capability Framework and the Job Families Project—continued to be implemented.

The Defence employment offer has been reviewed regularly to ensure that it is dynamic and can attract and retain Defence’s share of the best available people for the workforce. Defence has separately developed ‘deliberately differentiated offer’ methodology to improve its retention of critical occupations through individual and group incentives. Critical skills shortfalls will be addressed through a well-targeted package of cost-effective measures embracing both financial and non-financial elements of the employment offer. Efforts will continue to create, improve and sustain a fair, inclusive, respectful and diverse workforce and, in particular, to increase representation and employment opportunities for women and Indigenous Australians in Defence.

The People in Defence strategy continued to be the strategic blueprint for achieving key people outcomes. The strategy will be revised in line with the Defence White Paper and Force Structure Review in the coming year.

Cultural reform objectives remained a high priority in 2013-14, and 84 per cent of 175 key actions from six cultural reviews are being implemented. Key achievements have included:

• the establishment of the Sexual Misconduct Prevention and Response Office (SeMPRO)

• the release of the ADF alcohol management strategy

• a significantly enhanced focus on improving diversity and inclusion within both the APS and the ADF.

The Defence People Group will continue initiatives to implement, embed and maintain the changes needed to achieve the desired cultural effect. This will lead to a more capable organisation. During 2013-14, the ADF female participation rate increased from 14.4 per cent to 15 per cent—the highest rate that the ADF has ever recorded.

The Group continued to implement human resources shared services reforms during 2013-14 to deliver consistent, efficient and professional services, and also supported the strategic reform planned within Defence.

The ADF female participation rate increased from 14.4% to 15%—the highest rate that the ADF has ever recorded.

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DEFENCE ANNUAL REPORT 2013-14 55

Table 3.23: Program 1.8 deliverables

Deliverable Status

Provide timely, accurate and high-quality advice on key people issues to the Secretary, Chief of the Defence Force and the Government Substantially met Not all advice was as timely as it should

have been.

Complete the projects and initiatives described in the people chapter of the Defence Annual Plan in order to deliver a sustainable people capability through the development of:

• an attractive and compelling employment offer • a work environment that delivers on our commitments to our people • an effective and efficient people system, using shared services

Substantially met

Defence continues to reform its HR shared services to improve their effectiveness, noting that the first round of saving efficiencies has been achieved.

Deliver group-specific reforms and cost reductions Met

Coordinate and facilitate the Defence-wide implementation of Pathway to Change and cultural reform Met

Develop an evaluation framework to measure the achievement of desired cultural effects resulting from the implementation of Pathway to Change and cultural reform across Defence

Met

Facilitate access by the Defence Abuse Response Taskforce to information and records held by Defence Met

Fulfil departmental accountability for Defence’s payroll systems Met

Continue development of enhanced support to Defence families through a national service delivery model Met

Process applications for Defence medals that reward excellence, achievement and outstanding service Partially met Some time frames were not met.

Provide comprehensive services and support to managers, APS staff and ADF members in relation to sensitive and complex personnel issues Met

Conduct ADF recruiting Substantially met

Defence Force Recruiting permanent force entry:

• target: 5,824 • total inquiries: 80,087 • formal applications: 18,483 Reserve force entry:

• target: 1,997 • total inquiries: 21,300 • formal applications: 2,873

Coordinate and facilitate the implementation of the Defence Work Health and Safety Strategy 2012-17 Met

In conjunction with the Department of Veterans’ Affairs, coordinate the measures designed to provide seamless support to wounded, ill and injured members of the ADF

Met

Develop a systematic approach to developing and professionalising APS leaders in Defence Partially met The Defence APS Career and Talent

Management System based on core capabilities and Job Family occupations is in place. Components of Job Family skilling strategies are at various stages of maturity.

Publish an endorsed, corporate-level Diversity and Inclusion Strategy Met

56 DEFENCE ANNUAL REPORT 2013-14

Table 3.24: Program 1.8 key performance indicators

Key performance indicator Status

Advice to the Secretary, Chief of the Defence Force and Government on people issues is timely and of a high quality Substantially met Not all advice was as timely as it should

have been.

Projects and initiatives described in the people chapter of the Defence Annual Plan, which are aimed at delivering a sustainable people capability in Defence, are completed in a timely manner and achieve the desired outcomes

Met

Implementation of Pathway to Change across Defence, consistent with the timeframes outlined in supporting implementation strategies

Met

Timely and responsive facilitation of access to Defence information and records by the Defence Abuse Response Taskforce

Met

Human resource workforce and shared services reforms are effective in reducing costs and improving efficiency Substantially met Defence continues to reform its HR shared services to

improve their effectiveness, noting that the first round of saving efficiencies has been achieved.

Provide professional support services to ADF members and families, including delivery of family support programs and bereavement support in the event of death and serious casualties

Met

Ensure timely recognition of ADF members, ex-serving members and APS employees in accordance with the Australian and Imperial Honours and Awards systems, and civilian long-service recognition and commendation schemes

Partially met

The Directorate of Honours and Awards aims has met its three-month time frame for serving ADF and APS members. For discharged ADF members, time frames vary from four to nine months.

ADF recruiting achievement Substantially met

Defence Force Recruiting permanent force entry:

• target: 5,824 • applicants enlisted: 5,477 • enlistment achieved: 94 per cent

Reserve force entry:

• applicants enlisted: 1,104 • enlistment achieved: 55 per cent

Defence Work Health and Safety Strategy 2012-17 implementation milestones are achieved on schedule Met

Measures to provide seamless support to wounded, ill and injured members of the ADF are implemented according to schedule

Met

A suite of leadership development programs targeted at key career transition points is operating, and skills are improved in occupational groups

Substantially met

Leadership development programs are operating. Skills improvement in occupational groups continued.

Implementation of the Diversity and Inclusion Strategy, consistent with the timeframes outlined in supporting implementation plans Substantially met Groups and Services have provided updates on

the results of initiatives within their supporting implementation plans, and many initiatives are underway or complete. A gap analysis will be undertaken to determine where action needs to be focused.

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DEFENCE ANNUAL REPORT 2013-14 57

PROFILE | Rebekah Stefenac

Rebekah finds an inclusive culture at Defence Service: Australian Public Service

Group: Defence People Group

Age: 20

Birthplace: Westmead, NSW

‘My mum was adopted out as a child and lost contact with her Aboriginality until she was much older. I was seven when I found out I was Aboriginal and had many relatives I didn’t even know about. Since then I’ve established strong relationships with my Aboriginal family and I’ve cherished my time with them.

‘Dad is a lovable man but has a very fiery spirit. I’ll never forget my uncle’s wedding, when I saw how determined he can be. Only four kids from the whole family were allowed to go because they were over 15, but my dad wasn’t going to let that stop his younger kids from going.

‘During high school, I coordinated lots of Indigenous student events across New South Wales. On some occasions, people tried to prevent that happening because they felt uncomfortable about it. Whenever this happened, I was always more determined, and I surprised myself with how hard I’d work to make sure the events went ahead. Looking back on it, I think I showed the same kind of determination displayed by my dad when I was growing up.

‘Soon after I turned 19, my mother gave me the

idea to work for the Government, so I applied

to the Australian Public Sector Indigenous

Traineeship Program. I chose Defence and was

accepted. Since then, it’s opened a lot of doors

for me that I wouldn’t have found anywhere else.

‘During my traineeship, I moved across a few

areas of Defence such as the National Integrated

Panelling Authority and into the Enlistments

Cell, all of which are a part of Soldier Career

Management. At the end of my traineeship,

I transferred and I am currently working as an

APS 3 administrative officer in the APS Talent

Management Team.

‘In this role, I assist in the delivery and evaluation

of Executive Level 2 and Executive Level 1

development programs. I also assist with collating

forms, résumés and with the administrative

aspects in the delivery of information sessions for

participants as well as liaising with the Canberra-based project managers.

‘I wanted to work in Defence because of its culture: it’s very positive and inclusive and that makes me strive to continue to be a part of it.’

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Program 1.9 Defence Science and Technology

The Chief Defence Scientist, Dr Alex Zelinsky, is the primary adviser to the Secretary and the CDF and, through their offices, portfolio ministers and the Government on defence-related science and technology matters. He leads the Defence Science and Technology Organisation (DSTO) in providing science and technology support for Australia’s defence and security needs.

In support of military operations, DSTO deployed to the Middle East Area of Operations nine operations analysts directly supporting commanders, as well as six fly-away teams that enhanced ADF capability and force protection. Soldier protection technology developed by DSTO has been transitioned to Australian industry and is now being procured by allied nations.

DSTO’s science and technology program includes a specific focus on sustaining the current force. Highlights in 2013-14 included the Collins class submarines remedial program and hull structure remediation of Armidale class patrol boats, as well as reducing the cost of ownership of Army vehicle fleets through vehicle health and usage monitoring systems and condition-based maintenance regimes. A major upgrade to the Jindalee Operational Radar Network has taken significant DSTO research and development into operational capability, resulting in enhancements to coverage, processing capacity, electronic warfare, airfield surveillance and spectrum usage. Budget management and rebalancing within the department resulted in DSTO reprioritising its overall research program in consultation with Defence clients, which led to lower-priority deliverables being deferred or cancelled.

DSTO provided technical risk advice for 30 Defence Capability Plan projects proceeding to the Government for decision and technical risk certification for 24. This has increased awareness of technical risks for decision makers in Defence and the Government and enhanced the risk management of major projects.

DSTO’s Strategic Research Investment program aims to provide game-changing capability for Defence by investing in the organisation’s science and technology capabilities. The focus is on potential high-impact areas of bioterrorism preparedness; cyber warfare and security; future electronic warfare; future undersea warfare; hypersonics; intelligence, surveillance and reconnaissance; signatures, materials and energy; blast modelling and explosives; autonomous systems; and space systems. The program continues to leverage and foster interactions with industry, academia, and Australian and overseas research bodies.

DSTO led a whole-of-government effort that scoped the need for a national security science and technology policy framework and supporting program.

DSTO capabilities in cyber security, chemical-biological defence, intelligence analysis, blast modelling and explosives were provided, as part of Defence’s contribution, to higher-priority national security tasks.

Highlights of DSTO’s enhanced engagement with industry and academia and with partner nations included:

• introduction of Defence Science Partnerships, which provide a common framework for Defence to engage with Australian universities

• execution of new strategic industry alliances with eight major defence companies

• establishment of the Defence Innovation Realisation Fund, and government agreement to the initial tranche of projects

• approval of seven collaborative projects with Australian industry under the Capability and Technology Demonstrator Program

• agreement with Japan to cooperate on a project in the field of marine hydrodynamics.

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Table 3.25: Program 1.9 deliverables

Deliverable Status

Provide timely, accurate and expert science and technology advice on Defence and national security related matters to the Secretary, the Chief of the Defence Force and the Government

Met

Provide effective, relevant and timely:

• science and technology solutions and technical support to military operations, to the current force and to national security agencies’ operations and capabilities

• science and technology support to capability development and acquisition decision making, including technical risk assessment and certification for Defence Capability Plan projects

Substantially met

Deliverables in support of operations were rated met, while current force and national security deliverables were substantially met, with Defence clients agreeing to defer or cancel some medium and lower priority tasks.

Deliver a program of strategic research aimed at enhancing future Defence and national security capabilities and maintaining the organisation’s world-class research expertise and facilities

Met

Further develop strategic partnerships with external organisations, in particular international partners, local industry and academia; promote defence science and education in the broader Australian community

Met

Contribute to Defence reform outcomes by continuing to seek and implement improvements to DSTO leadership, business and culture, including fostering diversity and gender equality. Identify and evaluate technologies that facilitate efficiencies and savings in the development, operation, repair and maintenance of ADF platforms

Met

Table 3.26: Program 1.9 key performance indicators

Key performance indicator Status

Advice to Defence and the Government on science and technology matters is valued and contributes to better Defence and national security outcomes Met

The applied research program is strategically balanced in meeting the needs of Defence in support of operations, the current force, capability development and acquisition, and the needs of national security agencies

Met

Research program outputs are well suited to enhancing Defence and national security capability, treating risks and saving resources Met

The strategic research is focused on supporting future Defence capability and on providing game-changing capability for Defence in the longer term, to both prevent and create strategic surprise

Met

Program outcomes are delivered on time, in scope and within agreed resources Substantially met Budget management and rebalancing

within the department led to Defence clients agreeing to some medium and lower priority tasks being cancelled or deferred.

DSTO’s science and technology capability is contributed to by:

• a workforce with world-class expertise and facilities, measured through benchmarking and client feedback

• appropriately leveraged science and technology engagement and partnerships with international defence research organisations, industry and academia

Met

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Program 1.10 Vice Chief of the Defence Force

The Vice Chief of the Defence Force, Vice Admiral Ray Griggs, AO, CSC, RAN, was appointed on 1 July 2014, following the promotion of Air Chief Marshal Mark Binskin to CDF. He is the military deputy to the CDF and acts under standing arrangements as the CDF in his absence. The VCDF’s responsibilities include providing strategic-level management and situational awareness of current and potential ADF commitments for Defence and other government agencies; joint military professional education and training; joint and combined ADF doctrine; joint capability management policy; joint logistics; joint health; input to joint capability development; policy, governance and the accountability structure for the ADF Cadet Scheme; and initiatives to develop the capacity of the ADF Reserves to support ADF capability.

VCDF Group’s mission is to develop, deliver, enable and ensure Defence joint capability in order to protect and advance Australia’s national and strategic interests.

The Group is responsible for the Australian Civil-Military Centre, which supports Australia’s peace, stability and humanitarian operations overseas. It is also responsible for the ADF Parliamentary Program, the Federation Guard, ADF ceremonial activities, Strategic Communications Branch and the Counter Improvised Explosive Device Task Force.

The Group is committed to driving cultural reform in line with Defence’s Pathway to Change program.

The Group’s key achievements in 2013-14 included:

• delivery of a whole-of-government lessons learned capability

• implementation of the National ADF Family Health Program on 1 January 2014, following a four-and-a-half-year trial

• establishment of a Fuel Services Branch to provide Defence with a whole-of-enterprise approach to fuel services and remediation

• training of more than 1,000 undergraduates and 1,100 postgraduates; in addition, more than 3,740 students completed ADF short courses through the Australian Defence College

• completion of Phase 1 of the workforce reforms under Project Suakin

• introduction of the ADF Alcohol Management Strategy and Plan 2014-17 on 4 June 2014.

The Group’s mission is to develop, deliver, enable and ensure Defence joint capability in order to protect and advance Australia’s national and strategic interests.

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Table 3.27: Program 1.10 deliverables

Deliverable Status

Lead the preparation of departmental military strategic advice to the Government via ministerial submissions, ministerial representations, Question Time briefs and Cabinet submissions

Met

Provide military strategic expertise to CDF in order to prepare direction from CDF to subordinate headquarters Met

Deliver agreed savings and reforms within the VCDF Group, including in the areas of logistics, reserves, and preparedness and personnel and operating costs

Substantially met

Preparedness and personnel and operating costs reform outcomes were achieved, with the exception of implementation of the defence preparedness management information system, which will continue through to final operational capability in 2018-19.

Deliver coordinated logistic advice and services to the ADF, and provide oversight and assurance of the Defence logistic capability

Met

Provide policy advice and deliver services to optimise the health of ADF personnel Substantially met The following targets were delayed, but are being appropriately

managed:

• evaluation of initiatives from the ADF Mental Health and Wellbeing Strategy

• converting the ADF health portal for use on the internet.

Provide Defence, inter-agency, combined and joint capability coordination and preparedness management Substantially met An interim Joint Force Battle Laboratory capability has been

substantially (but not fully) established; coordination to make this a permanent capability continues.

Build and sustain a learning environment that links education, training and skilling to Defence capability Substantially met Defence education and training reform continues, with renewed

emphasis on ICT enablement and policy development.

Enhance capacity of Reserves to support Defence capability Met

Provide a coordinated, coherent and well-governed approach to youth development programs in the Australian Defence organisation in order to provide a positive youth development experience

Met

Promote best-practice civil-military engagement through the Australian Civil-Military Centre Met

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Table 3.28: Program 1.10 key performance indicators

Key performance indicator Status

Timely, accurate and widely consulted advice provided to the Government Met

High level of engagement with Joint Operations Command, International Policy Division, Strategic Policy Division, Australian Civil-Military Centre, and other government agencies, for operational matters

Met

Advice is readily sourced and made available to the offices of the CDF and VCDF to support strategic decision making Met

ADF operational tempo is managed within concurrency constraints Met

Group-specific reform and savings have been achieved Met

ADF operations and exercises receive effective logistics and health support and services Substantially met Joint Health Command has worked closely with the

DMO to coordinate the remaining deliverable hardware initiatives for Joint Project 2060 2B (deployable healthcare), which has project closure currently programmed for December 2015.

ADF joint and combined operational capability is enhanced Substantially met

Joint Capability Coordination has contributed to various international capability forums, including Counter Improvised Explosive Device, battlespace awareness, and interoperability with Singaporean Armed Forces, US Strategic Command and UK Joint Forces Command for capability concepts and enhancement.

Delivery of learning outcomes that deliver the skills required for defence capability Met

Planning and policy frameworks for the contribution of the Reserves to Defence and the wider community are enhanced Met

Governance and accountability frameworks enhance the youth development experience within the ADF Cadets and the Defence Work Experience Program

Substantially met

Work on governance and accountability frameworks continues.

Australian Civil-Military Centre delivers its goals effectively and efficiently in accordance with government instructions Met

Timely, accurate and widely consulted advice on nature of service classifications Met

Timely and accurate advice on strategic communications Met

ADF investigations are supported by effective and efficient administration Substantially met ADF investigators focused on serious and complex

investigations in domestic and offshore settings. Support from information and records management staff enabled the ADF to meet a number of strategic outputs, including government objectives. There has been a significant increase in requests for information during this period while average staffing levels were at 80 per cent.

Group-specific outcomes and programs are delivered on time and within agreed resources Met

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Program 1.11 Joint Operations Command

The Chief of Joint Operations, Vice Admiral David Johnston, AM, RAN, is the principal adviser on operational matters and is responsible to the CDF for the conduct of military operational planning. Supported by the Joint Operations Command Group, he commands all operations and major joint, combined, coalition, interagency and multilateral exercises on behalf of the CDF.

The Chief of Joint Operations is also responsible for the ADF’s provision of ADF resources to the Border Protection Command for support in countering maritime security threats. The Border Protection Command program is part of the Immigration and Border Protection portfolio.

Throughout 2013-14, Joint Operations Command assessed current campaigns to report progress, risk and additional planning requirements. The Group determined the resources necessary to identify joint operational lessons to inform future planning and doctrine development.

The Group developed options for the Government to use available ADF capabilities for the conduct of military operations in immediate or crisis situations. It developed a regional campaigning framework to identify areas of operational risk and provide a means to reduce those risks by enabling the synchronisation of single service, joint and combined military activities with whole-of-government activities.

Joint Operations Command conducted military operational planning, including the development and maintenance of contingency and operational plans. It routinely assessed the developing security environment to identify future planning priorities. As a result, it maintained relevant contingency plans for humanitarian assistance and disaster relief, the evacuation of non-combatants, and stability operations.

Further information on joint and combined operations in 2013-14 is available online.

The Group developed options for the Government to use available ADF capabilities for the conduct of military operations in immediate or crisis situations.

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Table 3.29: Program 1.11 deliverables

Deliverable Status

Provide input, in the form of reporting, analysis, plans and preparedness requirements, to the strategic level ADFHQ and Commonwealth national security decision-making committees on military options and operational matters associated with current operational commitments and future directed contingencies

Met

Plan, control, conduct and evaluate the ADF’s, and where applicable the whole-of-government and/or coalition’s, contributions to the Government directed operational commitments

Met

Plan, control, conduct and evaluate the ADF’s contributions to Defence assistance to the civil community and Defence Force aid to the civil authority, and plan for and coordinate search and rescue for military purposes

Met

Plan, control, conduct and evaluate the ADF’s participation in non-operational domestic and international joint, interagency and bilateral and multilateral exercises and engagement activities scheduled in the endorsed Program of Major Service Activities

Partially met

Regional Campaign Plan Affinity (South West Pacific) was developed as the first of a series of plans to provide a framework for synchronising joint training, exercises, engagement and other activity to reduce operational risks. Plan Unison (South East Asia) is drafted and is awaiting approval by the Chief of Joint Operations.

Maintain ongoing partnerships, collaboration and effective information sharing related to operational matters at the national level and effective engagement at the international level

Met

Provide advice to service headquarters, other Defence groups and other government departments as necessary to support the development of policy and capability in relation to current, planned and anticipated operations

Partially met

The Group continued to develop a regional campaign framework to identify and treat operational risks through a synchronised approach to inform joint and combined activities with stakeholders.

Contribute to Group-specific reforms and cost reductions Met

Table 3.30: Program 1.11 key performance indicators

Key performance indicator Status

Input to strategic-level decision-making committees on military options and operational matters and other advice on the development of capability is timely and accurate

Partially met

The Group has limited capacity to support joint capability development.

Operations achieve the Government’s direction and intent and/or, where applicable, the whole-of-government strategy Met

Forces are deployed and sustained efficiently and effectively, and in accordance with agreed timeframes Met

Operational options and plans are identified as innovative solutions that align with strategic guidance and contribute to meeting government direction, reduce risk, conserve resources and reduce adverse effects on directed ADF preparedness levels

Met

ADF operations and non-operational activities are planned, controlled and conducted in accordance with the promulgated rules of engagement and operational governance requirements in the areas of medical administration and clinical governance, and personnel, logistics, financial and contract management

Met

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FEATURE |

Defence involved in search for MH370 On 8 March 2014, a Malaysia Airlines Boeing 777 disappeared during a flight between Kuala Lumpur and Beijing. The flight was MH370 and there were 239 passengers and crew on board. No evidence of a crash had been reported and the last radio transmission from the crew came less than an hour into the flight.

A week later, additional information suggested that flight MH370 had diverted from its intended course, with analysts determining that the aircraft’s route had probably tracked south to an area far off the Western Australian coast, in the southern Indian Ocean.

On 17 March, the Australian Government assumed responsibility for search operations in Australia’s search and rescue region. Defence played a key role in supporting the Australian Maritime Safety Authority as the lead search and rescue agency. The following three profiles highlight specific areas of activity.

Defence establishments in Western Australia, notably Fleet Base West and RAAF Base Pearce, quickly ramped up to support additional ships and aircraft from a number of other nations, becoming an important focal point for the search and rescue effort.

Joint Task Force 658 With the support of RAAF AP-3C Orion long-range maritime patrol aircraft, a visual and radar search of an extensive area more than 2,000 kilometres south-west of Perth began on 18 March. Within 24 hours, the United States Navy and Royal New Zealand Air Force joined the task. On 19 March, HMAS Success was deployed from Fleet Base West to the search area; in the following weeks it was joined by HMAS Perth and HMAS Toowoomba. RAAF Base Pearce and Perth International Airport became the hubs for air search efforts involving more than 21 military aircraft and civilian jets from

Australia, Malaysia, New Zealand, the United States, China, Japan and South Korea. Three hundred and forty-five air sorties were conducted during 42 days of searching.

Joint Task Force 658 was established on 26 March to assist with coordination of the international and Australian search efforts as part of Operation Southern Indian Ocean.

On 30 March, Prime Minister Tony Abbott announced the appointment of the former Chief of the Defence Force, Air Chief Marshal Angus Houston, as the lead for coordinating the Australian Government’s response.

A number of acoustic detections were made by HMS Echo, the Chinese ship Haixun 01, Australian Defence Vessel Ocean Shield and RAAF Orion aircraft that needed to be analysed. After detailed analysis by the Australian Joint Acoustic Analysis Centre and the Defence Science and Technology Organisation (DSTO), all detections were eventually discounted. On 14 April, Ocean Shield, with an onboard team of civilian contractors supported and funded by the US Navy, deployed the Automated Underwater Vessel Bluefin 21 to conduct a side-scan sonar survey of the ocean floor. In conjunction with DSTO, the RAAF also trialled a modified Orion aircraft with an experimental acoustic processor and modified sonobuoys enabling the aircraft to detect flight data recorder signals underwater.

Geospatial intelligence and the search for MH370 Using International Maritime Satellite (Inmarsat) data collected via the hourly aircraft-to-satellite ‘handshake’ process, an international team of aircraft investigators discerned that MH370 had flown for at least six hours from its last contact. The team identified two broad swathes of the earth’s surface, reaching far to the north and south, as potential flight paths.

66 DEFENCE ANNUAL REPORT 2013-14

Defence’s Australian Geospatial-Intelligence Organisation (AGO) joined an international effort to search landing zones in the northern hemisphere; however, the possibility of MH370 having landed safely was soon ruled out.

Further analysis of the Inmarsat data enabled the international team to determine that MH370 had flown south, away from potential landing zones. At the same time, about 10 days after the aircraft’s disappearance, satellite imagery of the far southern Indian Ocean revealed large debris floating on the water.

The AGO mobilised to take on the enormous task of searching the southern latitudes for signs of MH370. Cloud cover and the sea state made the search for floating debris challenging. The resources of partner satellite imagery organisations around the world were coordinated and approximately 850,000 square kilometres of ocean were scanned. The AGO was supported by private industry, which provided 386 images covering 1.56 million square kilometres at no cost.

The AGO’s work directly supported the Australian Maritime Safety Authority (AMSA), the agency initially responsible for determining the location of the MH370 wreckage and the aircraft’s black box.

Around-the-clock reporting from the AGO helped AMSA plan daily aircraft search operations.

AMSA also received a steady stream of unsolicited debris sightings based on publicly available imagery. The AGO and partner organisations analysed this crowd-sourced imagery and provided AMSA with a confidence rating for each sighting. Using imagery analysis, the AGO was able to narrow down the list of more than 300 crowd-sourced sightings to two low-confidence identifications.

When the aerial search ended on 28 April, the AGO had spent around 4,500 hours searching approximately 850,000 square kilometres of the southern Indian Ocean and had provided AMSA with 61 possible debris detections for further investigation.

The Australian Transport Safety Bureau assumed responsibility as the lead search agency on 28 April. Defence has continued to provide support and expertise to the search.

DSTO’s technical advice assists in MH370 search Staff from DSTO have been complimented by Australian Transport Safety Bureau Chief

An RAAF AP-3C Orion flies past Australian Defence vessel Ocean Shield on a mission to drop sonar buoys to assist in the acoustic search in support of Operation Southern Indian Ocean.

FEATURE | MH370 (continued)

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Commissioner Martin Dolan for their work in tracing movements of missing MH370.

‘We have been very impressed with the work of the DSTO team during what I know were very trying times for your organisation’, he said.

‘The speed with which you all fitted into an ongoing arrangement, the technical ability and responsiveness of the DSTO team and the collaborative spirit of the whole exercise are a fine example of cooperation towards a great result.’

Determining the aircraft’s location was a mammoth task with few clues. The Australian Defence Vessel Ocean Shield deployed a towed pinger locator to detect the sonar ping from the underwater locator beacon attached to the aircraft’s black box. The beacons emit a signal only until their batteries expire. As the likely end-of-battery life drew closer, faint pings were heard, although they were of uncertain origin.

The Australian Transport Safety Bureau asked DSTO to independently assess the acoustic signals recorded by the pinger locator. Within 24 hours of receiving the data, DSTO advised that the signals did not appear to have originated from an aircraft underwater locator beacon on the seafloor. Subsequently, DSTO was also asked to review acoustic recordings available from the worldwide network of Comprehensive Nuclear Test Ban Treaty Organization seafloor hydrophone arrays. This analysis confirmed an earlier Curtin University assessment that the hydrophone array signals did not originate from MH370, either from its impact with the ocean surface or from a subsequent implosion of equipment on board the aircraft as it sank.

DSTO was then asked to join an international working group to independently reprocess Inmarsat data and provide a better estimate of the search zone. While the team was accustomed to coping with noisy and uncertain data, the problem required some particularly innovative thinking. The team developed and

calibrated new statistical data-processing techniques to analyse the sparse satellite data and predict the flight path of the aircraft. Such was the sensitivity of the analysis that even the effect of the earth’s shadow on the satellite had to be taken into account. Results from the newly developed mathematical models influenced the choice of the future search area and formed a key component of the Australian Transport Safety Bureau’s public report released on 26 June.

Prime Minister Abbott called Operation Southern Indian Ocean an ‘unprecedented’ coalition of countries working cooperatively in the search for MH370. By 28 April, 4.5 million square kilometres had been searched. The operation involved 2,999 flying hours and a combined total of 480 search days by the 17 ships and one submarine that were involved in surface operations.

Despite a series of possible acoustic detections and many sightings of objects of interest, no physical evidence was found. The DSTO and the international search group coordinated by the Australian Transport Safety Bureau are continuing to research the trajectory prediction problem to refine the required search zone for MH370. A commercial deep-water search company has also been contracted to continue subsurface search operations.

Trajectories generated from the likely distribution of the MH370 flight path

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Program 1.12 Capability Development

The Chief Capability Development—Vice Admiral Peter Jones, AO, DSC, RAN (to 2 October 2014) and Lieutenant General John Caligari, AO, DSC (from 3 October 2014)—is responsible, as the sponsor, for developing capability proposals consistent with strategic priorities, funding guidance, legislation and policy for consideration and approval by the Government.

The Capability Development Group develops and manages the Government’s plans for future defence capability outlined in the Defence Capability Plan (DCP). The plan lists the projects for government consideration (first- and second-pass) that make up the Unapproved Major Capital Investment Program, which covers significant future capabilities.

The classified DCP is reviewed and updated regularly to take into account factors that emerge as capability proposals are developed. These include changing strategic priorities and economic circumstances, the maturity of projects, the evolution of technology in options under consideration, and operational experience.

The Group maintains close relationships with a range of stakeholders, including the Defence Materiel Organisation, capability managers and industry. In conjunction with industry, the Group is responsible for the operation of the Rapid Prototyping, Development and Evaluation Program, which encourages innovation in future defence capabilities. A new program (the Defence Innovation Realisation Fund) was established to facilitate the transition of innovation into capability, and the first funded activities were approved during 2013-14.

During 2013-14, the Capability Development Group achieved 26 approvals worth more than $19 billion. The approvals comprised seven first-pass, 10 second-pass and nine other types of approvals. The approved projects include some of the most strategically significant in the Defence Capability Plan.

In the maritime environment:

• first-pass approval for SEA 1654 Phase 3—Maritime Operational Support Capability

• initial pass for SEA 5000 Phase 1—Future Frigate and SEA 3036 Phase 1—Pacific Patrol Boat Replacement.

In the aerospace environment:

• second-pass approval for a further 58 Joint Strike Fighter aircraft under AIR 6000 Phase 2A/B

• approval for a program of maritime surveillance projects consisting of:

- second-pass approval to acquire eight P-8A Poseidon maritime patrol aircraft

- first-pass approval for up to four more P-8A aircraft

- intermediate pass for the Triton high-altitude maritime surveillance unmanned aerial vehicle under AIR 7000 Phase 1B.

In the land environment:

• first- and second-pass approval for the second tranche of the Army’s digitisation program under LAND 200

• second-pass approval for the medium and medium-heavy component of the Army’s truck replacement program under LAND 121.

In the joint enabling environment:

• second-pass approval for two space situation awareness capabilities (the Space Surveillance Radar and Space Surveillance Telescope under JP 3029 Phases 1 and 2 respectively).

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Table 3.31: Program 1.12 deliverables

Deliverable Status

The provision of timely, accurate and high-quality advice on all aspects of capability development to the Secretary, Chief of the Defence Force (CDF) and the Government

Substantially met

The Government gave approval for a total of 26 project submissions in 2013-14. In addition, the Group provided a significant number of quality submissions to the ministers, the Secretary and the CDF. Accurate costings remain an issue.

The provision of independent analysis and contestability of capability proposals Substantially met All Defence Capability Plan project proposals are contested

through the capability committee process; however, risk remains, as the contestability is subject to the skills and experience of the project analyst. Capability Development Group has also begun contesting Chief Information Officer Group ICT projects; several early projects have tested and improved the process.

The development and management of an affordable and executable DCP Substantially met The Government has agreed on a Forward Work Program

of DCP projects to be considered before completion of the Defence White Paper.

The development of Defence capability investment proposals for consideration by the Government Substantially met Defence secured 26 out of 31 proposals from the Government

totalling $19 billion.

The publication of a public version of the DCP and the associated Defence Capability Guide Not applicable The Government announced that the next public DCP will be

released in the context of the Defence White Paper process.

The management of the Key Defence Assets Register (KDAR) Substantially met In April 2014, Defence completed a comprehensive review of

the KDAR, updating the data in the register during that process. The next KDAR update is scheduled for February 2015. Defence also began work on transitioning the KDAR standard operating procedures into Capability Development Business Rules under the organisation’s revised policy framework. Defence plans to complete this transition in 2014-15.

The Defence Capability Development Handbook was updated in December 2012. It will be progressed to a Defence Manual during the course of 2013-14

Partially met

The handbook was updated in June 2014. Transition to a manual will continue in 2014-15.

Enhancing the effectiveness of the capability development process through the implementation of Capability Development Improvement Program initiatives

Met

Under the Rapid Prototyping Development and Evaluation Program, work collaboratively with Australia’s defence industry to develop innovative solutions to complex issues affecting capability and operations

Met

Deliver independent test and evaluation support, trials and demonstrations to Defence throughout the capability systems lifecycle

Substantially met

All requests for independent test and evaluation trials were met to a high standard. Most government submissions were underpinned with an early test plan. First-pass submissions now include risk-assessed preview test and evaluation. Governance oversight of test and evaluation plans in the acquisition phase (after second pass) has begun, and additional resources have been sought to provide this input to all project reviews. A centralised Defence-wide test and evaluation policy has been approved and readied for publication.

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Table 3.32: Program 1.12 key performance indicators

Key performance indicator Status

Conduct an independent maturity assessment of portfolio management within the Capability Development Group Met

Ensure that capability investment proposals have realistic schedules and costs projections, and comprehensive risk assessments and mitigation Met

Improve the corporate information management systems that support end-to-end visibility, planning, management and reporting of capability development Met

Implement Capability Development Improvement Program initiatives to improve the timeliness and quality of capability submissions and reflect these improvements in current capability development guidance

Met

Provide objective advice to the Secretary and CDF Met

Submit timely proposals that are coherent, compelling and consistent with strategic guidance and affordable within the DCP Met

Program 1.13 Chief Finance Officer

The Chief Finance Officer, Mr Phillip Prior, is responsible for giving strategic financial advice and information to the portfolio ministers, the Secretary, the CDF and Defence senior leaders. The Chief Finance Officer provides a whole-of-Defence focus for planning, management, monitoring and reporting on key deliverables to the Government, including Defence outputs.

The Group is responsible for Defence financial governance and assurance and manages the Defence budget and financial policies, principles and practices in accordance with the Financial Management and Accountability Act 1997. The Group drives Defence financial management and improvement programs by providing a shared financial services capability.

In 2013-14, Defence financial statements, Portfolio Budget Statements and Portfolio Additional Estimates Statements were prepared and submitted within reporting deadlines. All whole-of-government reporting requirements were achieved. The Chief Executive Instructions were maintained and updated to reflect changes to financial regulation and policy.

Highlights of the Group’s achievements during the year included:

• coordination of the annual budget-cycle process and production of the 2014-15 Portfolio Budget Statements and 2013-14 Portfolio Additional Estimates Statements

• business improvement and increased efficiencies through further development of the shared financial services capability across Defence

• evaluation and improvement of processes and systems

• continued improvement of Defence financial statements.

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PROFILE | Miok Choi-Payne

Miok balances numbers, work and life In November 2014, Miok Choi-Payne will celebrate eight years in Defence, the last half of which has been in the Navy and then in the Chief Finance Officer Group.

Canberra is a long way from the Republic of Korea where Miok was born. She lived with her family in the countryside and moved to Seoul in Year 8. After leaving school, she secured an administrative job with Samsung.

When Miok moved to Australia in the early 1990s, she spoke little English and was keen to improve her language skills and take advantage of educational opportunities. Living in Nowra and married with small children, she studied part-time, successfully completing a Certificate IV in Accounting. She obtained an accounting job and went on to complete a Diploma in Accounting.

Miok moved to Canberra and joined the APS, working in the DMO and completing an accounting-related degree through the University of Wollongong with Studybank support. Determined, she commuted to the coast during the last year of her degree.

She said she loves ‘number crunching’, which is why she chose an accounting course, eventually becoming a CPA two and a half years ago. However, she said she was quite pleased to have survived her first end-of-financial-year in the Treasury and Banking Directorate Cash Team.

Because the Defence environment offers good work-life balance, Miok said she is able to exercise regularly. One of her recent achievements was jogging 10 kilometres in less than 60 minutes during the Australian Running Festival in April 2014, and in August 2014 she participated for the first time in the City2Surf race in Sydney.

While Miok is now an Australian citizen, she still keeps ties with Korea. She participates in local community events, including assisting at the Korean food stall during Canberra’s Multicultural Festival.

Of her many achievements, Miok said she was proudest of her family, including her husband and two sons.

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Table 3.33: Program 1.13 deliverables

Deliverable Status

Defence financial statements Met

Defence Portfolio Budget Statements Met

Defence Portfolio Additional Estimates Statements Met

Defence Chief Executive Instructions Met

Monthly/annual input to whole-of-government reporting Met

Table 3.34: Program 1.13 key performance indicators

Key performance indicator Status

Provide timely and high-quality financial advice to the Minister, the Secretary and CDF Met

Produce Defence’s budget, financial statements and the annual Defence Management and Finance Plan within agreed statutory timeframes Met

Maintain unqualified financial statements Met

Cutting red tape

The Defence Deregulation Unit was established within the Chief Finance Officer Group and has responsibility for implementing the Government’s deregulation agenda. The Defence Deregulation Action Network was also created, and includes members from all Groups and Services.

A Defence Portfolio Deregulation Forward Work Program, which includes a range of deregulation opportunities that Defence intends to pursue over the short to medium term, was provided to the Prime Minister in April 2014.

A stocktake of regulation across Defence was completed during the year. The purpose of the stocktake was to identify which regulations and administrative processes impose the highest regulatory burden on business, the not-for-profit sector and individuals, in order to reform and reduce red tape. The stocktake identified 48 regulations or regulatory frameworks. Defence also identified an initial $5 million in deregulation savings through the completion of the stocktake.

Defence provided significant input into the Government’s 2014 Autumn Repeal Day, including the repeal of over 1,000 pieces of redundant legislation.

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DEFENCE ANNUAL REPORT 2013-14 73

Program 1.14 Defence Force Superannuation Benefits

The objective of Program 1.14 is to administer and report member and employer contributions paid during the year to the Defence Force Retirement and Death Benefits Scheme (DFRDB) and the Military Superannuation and Benefits Scheme (MSBS). It accounts for the liability for these schemes as well as for the Defence Force Retirement Benefits (DFRB). During 2013-14, Defence provided timely payment of member contributions to ComSuper, which is the manager of the three schemes.

This program also includes payment of the MSBS Retention Benefit. Since 1991, Defence has paid the retention benefit to eligible scheme members after 15 years of continuous eligible service. In 2013-14, Defence continued the prompt payment of member contributions to ComSuper and the payment of the retention benefit to those members who have taken up the offer.

Table 3.35: Program 1.14 deliverables

Deliverable Status

Report on superannuation contributions and the movement in liabilities associated with the three military superannuation schemes Met

Table 3.36: Program 1.14 key performance indicators

Key performance indicator Status

Provision of timely payments to ComSuper and quality administration of DFRB, DFRDB and MSBS employer and member contributions Met

Program 1.15 Defence Force Superannuation Nominal Interest The objective of Program 1.15 is to administer nominal interest for the three military superannuation schemes—the Defence Force Retirement Benefits, Defence Force Retirement and Death Benefits Scheme, and Military Superannuation and Benefits Scheme.

Table 3.37: Program 1.15 deliverables

Deliverable Status

Report on superannuation nominal interest associated with the three military superannuation schemes Met

Table 3.38: Program 1.15 key performance indicators

Key performance indicator Status

Provide quality administration services for DFRB, DFRDB and MSBS nominal interest transactions Met

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Program 1.16 Housing Assistance

The Defence Home Owner Scheme closed on 30 June 2010 and has been replaced by the Defence Home Owner Assistance Scheme, which started on 1 July 2008.

Defence Home Owner Scheme

The Defence Home Owner Scheme provides a subsidy on the interest payable on home loans of between $10,000 and $80,000 (held by clients who applied before 30 June 2010). The benefits are provided under an agreement between the National Australia Bank and the Australian Government. The subsidy amount is calculated at 40 per cent of the average monthly interest on the loan.

There were 1,180 active loans at 30 June 2014 for a total of $1.6 million in subsidy payments during 2013-14. This was a significant decline in the number of members receiving the Home Owner Scheme subsidy since the introduction of the Defence Home Owner Assistance Scheme on 1 July 2008. The National Australia Bank has met its obligations to the Commonwealth as the appointed home loan provider.

Defence Home Owner Assistance Scheme

The Defence Home Owner Assistance Scheme is an Australian Government initiative that provides a subsidy on the interest payable on a home loan for members of the ADF. The scheme is open to current and former ADF members who were in effective service in the ADF on or after 1 July 2008 and have completed a qualifying period and accrued a service credit.

The Department of Veterans’ Affairs, as the scheme administrator, is responsible for assessing member applications, issuing subsidy certificates to eligible members and processing subsidy payments. The three appointed home loan providers are the Australian Defence Credit Union, the Defence Bank and the National Australia Bank.

During 2013-14, the scheme continued to attract a high level of interest from ADF members. A total of 6,022 applications were registered during the year, and 5,679 members received subsidy certificates. Fifty-four per cent of members who applied for a subsidy certificate indicated that the scheme influenced their decision to remain in the ADF, and 43 per cent indicated that it was a key factor in encouraging them to remain in the ADF.

At 30 June 2014, 19,007 members were receiving subsidy assistance under the scheme. In 2013-14, the value of subsidy assistance paid to eligible members totalled $73.0 million. The total amount paid in subsidy assistance since the commencement of the scheme is $356.8 million.

The Department of Veterans’ Affairs continued to meet its obligations under the legislation and memorandum of understanding (MOU) and has provided effective administration to the scheme.

The Department of Veterans’ Affairs referred 24 appeals for internal review of application outcomes to the delegate in Defence during the year. Four members applied to the Administrative Appeals Tribunal for an external review.

Operational costs

Under the MOU, the Department of Veterans’ Affairs is paid an annual management and service delivery fee for the administration of both schemes. In 2013-14, the administration costs totalled $5.2 million (excluding GST).

Defence received a total of $13.2 million in remuneration from the three home loan providers during the year.

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Table 3.39: Program 1.16 deliverables

Deliverable Status

Provide ADF members with assistance to achieve home ownership that reflects the contemporary housing and home finance markets Met

Provide progressively higher levels of assistance for eligible members serving beyond the critical career points of four, eight and 12 years of service Met

Provision of quality services for the administration of the scheme, including the accurate and timely processing of member applications and issuing of subsidy certificates to eligible members Met

Table 3.40: Program 1.16 key performance indicators

Key performance indicator Status

Members respond to and take up the Defence Home Ownership Assistance Scheme Met

Ensure that interest rates provided to ADF members by the home loan providers are competitive with other interest rates in the market Met

Program 1.17 Other Administered Program 1.17 comprises four elements:

• interest earned on overdue accounts and on official bank accounts held to facilitate operational requirements

• interest on government loans to fund the building of new accommodation, dividends and tax equivalent payments received from Defence Housing Australia

• revenue received from special public monies for unidentified Comcare receipts

• departmental returns to the Official Public Account arising from sale of assets with an original purchase price in excess of $10 million.

Table 3.41: Program 1.17 deliverables

Deliverable Status

Report on interest and other receipts transferred to the Official Public Account Met

Table 3.42: Program 1.17 key performance indicators

Key performance indicator Status

Accurate accounting and reporting on ‘Other Administered’ Met

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CHAPTER 4 Outcome 2

Outcome 2: The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by Government

Summary

The Australian Defence Force (ADF) advances Australia’s strategic interests by planning for, and developing and maintaining, the capability to deter and defeat armed attacks on Australia and by planning for, conducing, controlling and evaluating Defence and/or coalition contributions to Government-directed operations. These operations include those that contribute to the security of the immediate neighbourhood (Program 2.1) and those that support wider interests (Program 2.2). Their objectives in relation to this outcome and current status are detailed in this chapter. The ADF has contributed to maintaining a stable security environment where national programs focus on peace, reconciliation, economic recovery, law and order and good governance across all ADF operations.

All deliverables and key performance indicators for Outcome 2 were met.

An Afghan child happily chats with Warrant Officer Class One Marc Williamson from Mentoring Task Force One in the Mirabad Valley green zone.

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Table 4.1: Total cost for Outcome 2

2013-14 budget estimate[1] $’000

2013-14 revised estimate[2] $’000

2013-14 actual result $’000

Variation

$’000 %

Program 2.1: Operations Contributing to the Security of the Immediate Neighbourhood

Revenue from other sources - - 91 91 -

Departmental outputs 16,685 41,641 20,617 -21,024 -50

Program 2.2: Operations Supporting Wider Interests

Revenue from other sources 10,739 10,785 17,869 7,084 66

Departmental outputs 884,936 981,186 597,642 -383,542 -39

Total resourcing

Total departmental outputs 901,621 1,022,827 618,260 -404,567 -40

Total departmental revenue from other sources 10,739 10,785 17,960 7,175 67

Equity injection - - - - -

Total resources for Outcome 2 912,360 1,033,612 636,220 -397,392 -38

Notes

This table excludes capital payments for outcomes.

8. As published in the Portfolio Budget Statements 2013-14, Table 35.

9. As published in the Portfolio Budget Statements 2014-15, Table 37.

Table 4.2: Net additional cost of operations

2013-14 budget estimate[1] $m

2013-14 estimated actual[2] $m

2013-14 actual result $m

Variation $m

Operation Astute 5.4 5.4 3.8 -1.6

Operation Slipper[3] 874.9 970.9 735.3 -235.6

Operation Resolute[4] 9.9 41.4 25.0 -16.4

Operation Anode 11.3 11.3 8.8 -2.5

Support to 2014 G20 Summit 7.1 7.1 0.1 -6.9

Operation Southern Indian Ocean - 25.0 10.8 -14.2

Enhanced Force Protection in Afghanistan[3,5] 10.0 10.0 10.0 -

Total net additional costs 918.5 1,071.0 793.8 -277.2

Notes

1. As published in the Portfolio Budget Statements 2013-14, Table 4.

2. As published in the Portfolio Budget Statements 2014-15, Table 4.

3. Government supplementation for Enhanced Force Protection in Afghanistan costs have been captured against Operation Slipper.

4. Includes funding for expanded activities under Operation Sovereign Borders.

5. Government supplementation for Enhanced Force Protection in Afghanistan costs is captured against Outcomes 1 and 2.

78 DEFENCE ANNUAL REPORT 2013-14

Table 4.3: Net additional cost of operations from 1999-2000 to 2017-18

1999-00 to 2012-13 actual result

$m

2013-14 actual result $m

2014-15 budget estimate $m

2015-16 forward estimate $m

2016-17 forward estimate $m

2017-18 forward estimate $m

Total $m

Operation Astute 4,308.1 3.8 - - - - 4,311.9

Operation Bel Isi 47.7 - - - - - 47.7

Operation Slipper 6,189.5 735.3 240.8 121.9 103.9 - 7,391.4

Operation Manitou - - 52.0 2.9 1.7 - 56.6

Operation Accordion - - 57.0 1.7 - - 58.6

Operation Resolute[1] 150.0 25.0 59.7 0.6 - - 235.3

Operation Catalyst 2,364.5 - - - - - 2,364.5

Operation Anode 346.4 8.8 0.1 - - - 355.3

Operation Sumatra Assist 44.5 - - - - - 44.5

Operation Acolyte 10.5 - - - - - 10.5

Operation Deluge 6.7 - - - - - 6.7

Operation Pakistan Assist 9.8 - - - - - 9.8

Operation Outreach 14.6 - - - - - 14.6

Operation Kruger 45.3 - - - - - 45.3

Operation Southern Indian Ocean - 10.8 3.0 - - - 13.7

Enhanced Force Protection in Afghanistan 530.0 10.0 16.2 - - - 556.2

Defence support to 2014 G20 Summit - 0.1 8.0 - - - 8.2

Total net additional costs 14,067.7 793.8 436.8 127.0 105.6 - 15,530.9

Sources of funding for operations

Government supplementation 12,459.7 771.0 412.4 127.0 105.6 - 13,875.8

Department of Foreign Affairs and Trade 9.1 - - - - - 9.1

Department of Defence (absorbed) 1,599.0 22.8 24.3 - - - 1,646.1

Total cost 14,067.7 793.8 436.8 127.0 105.6 - 15,530.9

Note

1. Includes funding for expanded activities under Operation Sovereign Borders.

Further information on Outcome 2 expenditure is available online.

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Program 2.1 Operations Contributing to the Security of the Immediate Neighbourhood

Defence undertakes a variety of operations in order to preserve security and stability in our region.

Operation Gateway, which occurs up to six times a year, is a continuing maritime surveillance operation conducted in the north-eastern Indian Ocean and the South China Sea to contribute to the stability of important sea lanes.

Operation Solania is a surveillance operation to support Pacific island countries in fisheries law enforcement in the South West Pacific. There are up to four AP-3C deployments per year to the region, to coincide with operations led by the Forum Fisheries Agency, which is based in Honiara, Solomon Islands.

Operation Philippines Assist was a large ADF deployment supporting humanitarian assistance and disaster relief following Typhoon Haiyan. Numerous Defence assets were involved, including a ship, aircraft and personnel on the ground in disaster areas.

Table 4.4: Program 2.1 deliverables

Deliverable Status

Operation Commenced Objective

Gateway 1981 Conduct northern Indian Ocean and South China Sea maritime surveillance patrols Met

Solania 1988 Conduct South West Pacific maritime surveillance

patrols

Met

Anode 2003-13 Support the coalition police forces in maintaining the rule of law in Solomon Islands Met Operation Anode concluded

on 30 September 2013.

Philippines Assist 2013 Support the whole-of-government contribution to the international humanitarian and disaster relief operations

as requested by the Philippines Government

Met

Table 4.5: Program 2.1 key performance indicators

Key performance indicator Status

ADF operations meet their stated objective within the Government’s guidance Met

ADF forces are effectively deployed and sustained Met

ADF forces are withdrawn for reconstitution when they are no longer required Met

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FEATURE |

Operation Philippines Assist In late 2013, the ADF again answered an urgent call for international assistance, this time in the Philippines.

On 8 November 2013, Typhoon Haiyan, known locally as Yolanda, made landfall in the Eastern Visayas region. The United Nations reported that Haiyan had affected around 14 million people and displaced an estimated 4 million. The typhoon was the strongest to hit the Philippines during 2013 and is considered one of the worst in recorded history.

The ADF response began in the immediate aftermath. The RAAF provided air logistic support to the Australian Medical Assistance Team, transporting essential medical personnel and equipment via C-17 and C-130 transport aircraft from Darwin to Ormoc in the Philippines. Logistic resupply was provided until the return of the team in December 2013.

A follow-up recovery support force focused on humanitarian assistance activities in the vicinity of Ormoc and the surrounding area. The Navy’s HMAS Tobruk transported ADF personnel and equipment to the region and then distributed humanitarian supplies to remote islands.

The Army’s response was comprehensive and wide-ranging. Deployed personnel repaired 16 schools and more than 180 classrooms, removed 1,302 cubic metres of debris, repaired 78 roofs, conducted hazard reduction and plumbing works, assisted the redeployment of non-government organisation personnel, supported the World Food Programme distribution centre, provided assessments in support of the United Nations and Philippines Government recovery effort, and fostered strong relationships with the local population, local government departments and the Armed Forces of the Philippines.

Meanwhile, the RAAF continued air logistic support by transporting over two tonnes of cargo, transferring about 5,000 people—including 3,300 internally displaced persons—and providing air traffic and ground support services at Mactan.

Most ADF elements returned to Australia by 21 December 2013. The contribution was considered a success on the basis of its impact and immediate support to an area devastated by the disaster. The Philippines Government has formally acknowledged the Australian support, including by presenting participating personnel with Military Civic Action medals.

Members of No 1 Airfield Operations Support Squadron load an RAAF C-17 Globemaster with Australian Medical Assistance Team equipment at Tacloban during Operation Philippines Assist

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Program 2.2 Operations Supporting Wider Interests

Under Operation Slipper, the ADF contributes to the International Security Assistance Force in Afghanistan, which is led by the North Atlantic Treaty Organization, and to the Combined Maritime Force in the Arabian Sea, Red Sea, Gulf of Aden and Arabian Gulf.

The key components of the ADF’s involvement in Operation Slipper included Headquarters Joint Task Force 633, Combined Team—Uruzgan, Advisory Task Force, Special Operations Task Group, Rotary Wing Group, Force Support Unit, Force Communications Unit, 205 Corps Advisory Team, Logistics Training Advisory Team, Afghan National Army Officer Academy Training Team, Heron Unmanned Aerial Vehicle Surveillance, Joint Task Force 633 Air Component and various maritime force elements.

During 2013-14, the main focus of the ADF effort in Afghanistan was the development of the Afghan security forces with the capability to take lead responsibility for the security of their country. To that end, the ADF completed its advisory role with the Afghan National Army’s 4/205 Brigade in December 2013 so that the Afghan force could take over lead responsibility for security in Uruzgan Province.

The Royal Australian Navy maintained the deployment of a frigate in support of maritime counter-terrorism and counter-piracy operations conducted by the Combined Maritime Force. Australia commanded Combined Task Force 150, responsible for the maritime counter-terrorism mission, between 1 December 2013 and 10 April 2014.

In support of a rules-based global security order, Defence continued to provide support to three United Nations (UN) missions—Operations Paladin, Palate II, and Aslan—and maintained its longstanding links to the Multinational Force and Observers mission in the Sinai, Egypt, under Operation Mazurka. In November 2013, Defence ceased Operation Riverbank in support of the UN mission in Iraq.

During 2013-14, Australian members performed key roles in UN efforts to maintain peace and security in highly volatile areas such as the Golan Heights, the Sinai and South Sudan. The ADF role included supporting free and fair elections in Afghanistan, contributing to the reform of legal systems in South Sudan, assisting in humanitarian efforts to provide basic services and subsistence to those in need, and supporting the return of internally displaced people and refugees. Defence will continue to support these UN missions in their critically important and globally significant work.

ADF members performed key roles in UN efforts to maintain peace and security in highly volatile areas.

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Table 4.6: Program 2.2 deliverables

Deliverable Status

Operation Commenced Objective

Paladin 1956 Contribute to the United Nations Truce Supervision Organization in the Middle East Met

Mazurka 1982 Contribute to the Multinational Force and Observers in the Sinai Met

Slipper 2001 Contribute to the international coalition against international terrorism and assist with the reconstruction of Afghanistan Met

Palate II 2005 Provide a senior military advisor and military liaison officers to the United Nations Assistance Mission in Afghanistan Met

Riverbank 2008-2013 Contribute to the United Nations Assistance Mission for Iraq (ceased November 2013) Met

Aslan 2011 Contribute to the United Nations mission to the Republic of South Sudan Met

Table 4.7: Program 2.2 key performance indicators

Key performance indicator Status

ADF operations meet their stated objective within the Government’s guidance Met

ADF forces are effectively deployed and sustained Met

ADF forces are withdrawn for reconstitution when they are no longer required Met

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CHAPTER 5 Outcome 3

Outcome 3: Support for the Australian community and civilian authorities as requested by Government

Summary Outcome 3 focuses on the ability of the ADF to contribute to national support tasks in Australia (Program 3.1) where directed by the Government, both in emergency and non-emergency situations.

Emergency assistance in Australia is provided and managed using the Government emergency management plans and arrangements maintained by Emergency Management Australia. The ADF has developed standing plans for short-notice Defence contribution to national support tasks, and continues to train and exercise to maintain selected force elements at preparedness levels should these plans be activated.

All deliverables and key performance indicators for Outcome 3 were met.

Table 5.1: Total cost for Outcome 3 2013-14 budget estimate[1]

$’000

2013-14 revised estimate[2] $’000

2013-14 actual result

$’000

Variation $’000 %

Program 3.1: Defence Contribution to National Support Tasks in Australia

Revenue from other sources - - - - -

Departmental outputs 16,933 54,097 28,879 -25,218 -47

Total resourcing

Total departmental outputs 16,933 54,097 28,879 -25,218 -47

Total departmental revenue from other sources - - - - -

Total resources for Outcome 3 16,933 54,097 28,879 -25,218 -47

Notes

This table excludes capital payments for outcomes.

1. As published in the Portfolio Budget Statements 2013-14, Table 38.

2. As published in the Portfolio Budget Statements 2014-15, Table 40.

84 DEFENCE ANNUAL REPORT 2013-14

Program 3.1 Defence Contribution to National Support Tasks in Australia

National support tasks undertaken by the ADF can include the security of the Australian coastline against illegal immigration, smuggling, quarantine evasion and other intrusions to Australian sovereignty, counter-terrorism responses, search and rescue, and natural disaster relief.

The ADF contributes to Border Protection Command, providing maritime surveillance and response assets that are routinely tasked in accordance with the Government’s direction.

Pressures that may arise from sustained deployments of major force elements are addressed by closely monitoring ADF concurrency to ensure that the ADF retains flexible response options in support of the Government’s priorities.

Table 5.2: Program 3.1 deliverables

Deliverable Status

Operation Commenced Objective

Resolute 2006 Contribute to the whole-of-government maritime surveillance and response Met

Southern Indian Ocean 2014 Contribute to the whole-of-government search for missing aircraft, MH370

Met

Landscape 2013 Contribute to Department of Immigration and Citizenship’s establishment of additional temporary accommodation at offshore immigration processing centre at Manus Island

Met

Parapet 2013 Support to the whole-of-government effort as host of the G20 Summit in 2014 Met

NSW Bushfire Assist 2013 Defence assistance to recovery efforts in NSW following the October 2013 bushfires

Met

Table 5.3: Program 3.1 key performance indicators

Key performance indicator Status

Defence’s contribution to national support tasks in Australia meets government directives Met

Defence’s response to requests for Defence Force aid to the civil authority is effectively managed, sustained and reported Met

Defence’s response to requests for Defence Assistance to the Civil Community (DACC) is effectively managed, sustained and reported Met

Further information on Outcome 3 expenditure is available online.

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CHAPTER 6 Defence Materiel Organisation

Overview

Review by the Chief Executive Officer

In 2013-14, the Defence Materiel Organisation (DMO) expended around $9.5 billion to defence industry to acquire and sustain military equipment and support services. Most of this investment is tied up in long-term contracts of over five years duration. In addition, industry support programs managed by the DMO had an allocated budget of $40 million. The DMO continues, on average, to deliver the approved project scope within budget, with only a very small number of projects experiencing cost overruns. On average, projects are delivered 5 per cent under the approved project budget.

The DMO has improved cost and capability delivery performance in an increasingly complex environment. We operate under a purchaser-provider model, underpinned by agency service agreements, to deliver commercial, engineering, sustainment and project management services to the Defence capability managers. These funded agency agreements—materiel acquisition agreements for acquisition and materiel sustainment agreements for sustainment—contain key performance indicators to measure the DMO’s performance.

To better position the DMO to deliver customer requirements and meet government performance requirements, the DMO Strategic Framework for 2013-15 continued to be a central driver for the organisation. To best align the DMO’s activities to the framework, we have also implemented four change priorities. These priorities are used to focus DMO improvement activities on the means to sustainably deliver the outcomes agreed with capability managers without compromising safety and within available resourcing. The four change priorities are:

1. Deliver acquisition and sustainment more efficiently

Use DMO resources more efficiently to deliver approved acquisition and sustainment services to the Australian Defence organisation.

2. Interact with reviews

Proactively engage with and support the National Commission of Audit, the Defence First Principles Review (which incorporates a review of the DMO), the Defence White Paper and the Force Structure Review. Implement the accepted recommendations of reviews applicable to the DMO.

3. Streamline internal processes

Streamline internal policies and processes to empower greater delegation of decisions. Apply the minimum essential guidance required to execute DMO business activities.

4. Reform the DMO

Identify opportunities for reform across the DMO, plan early phases of potential implementation, and identify possible pilot activities. In parallel, enhance the skills and diversity of the DMO workforce and collaborate with defence industry to support the sustained delivery of services required by the Government and Defence.

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There has been continuing work within the DMO to incorporate legally binding responsibilities from the Work Health and Safety Act 2011 into our policies and processes. The full suite of the DMOSAFE policy is now implemented. The continuous improvement of this framework means that we are updating our systems regularly in order to capture and share information on risks and hazards, together with lessons learned, and to support the implementation of benchmarked practices.

The DMO Work Health and Safety Assurance program has indicated that we have some exemplary performers across the organisation, and that general performance is trending up.

The DMO has also played a significant and leading role in the remediation of hazardous chemicals and joint special licence plant across all of Defence. This has facilitated the closure of the Comcare enforceable undertaking on hazardous chemical management, and the closure of the Comcare improvement notice on the management of joint special plant.

I am also pleased with the work within the DMO to enhance our diversity and inclusion. This is not just an argument about numbers, quotas or targets: it is about cultural reform and about building understanding and awareness of our workplace. Perhaps more importantly, it is also about creating a better, more productive DMO.

To that end, I have established the DMO Diversity Advisory Group. Diversity and inclusion contribute directly to ‘hard’ business outcomes and can provide a richer experience for managers and team leaders, as well as making the DMO a better place in which to work.

Given the current recruitment restrictions, the DMO is seeking to establish, where appropriate, an internal labour market, which will use staff with specific skill sets in flexible roles across several work areas. This approach aims to ensure that the key priority positions are filled, even on a more flexible, including part-time, basis—which is preferable to not filling a high-priority position. This approach should allow staff to construct more flexible working arrangements while enabling the DMO to achieve agreed outcomes.

Warren King Chief Executive Officer Defence Materiel Organisation

Diversity and inclusion contribute directly to ‘hard’ business outcomes and can provide a richer experience for managers and team leaders, as well as making the DMO a better place in which to work.

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DMO role and functions The DMO is responsible for the acquisition and sustainment of the materiel elements of operating capability for the ADF. The DMO has been a prescribed agency since 1 July 2005.

The Chief Executive Officer is directly accountable to the Minister for Defence under the Financial Management and Accountability Act 1997 for the performance of the DMO, while remaining accountable to the Secretary under the Public Service Act 1999.

Figure 6.1: Organisational structure as at 30 June 2014

Chief Executive Officer Mr Warren King

Deputy Chief Executive Officer and General Manager

Commercial Mr Harry Dunstall

General Counsel Ms Liesl O’Meara

General Manager Submarines Mr David Gould

Chief Finance Officer DMO Mr Steve Wearn

General Manager Joint, Systems and Air Ms Shireane McKinnie

General Manager Land and Maritime Mr Colin Thorne

Performance against DMO strategic priorities

Australian Military Sales Office

During 2013-14, the Australian Military Sales Office enhanced its management of major asset disposals in Defence and further developed the government-to-government sales program. Engagement with Indonesia was a major focus and included the sale and transfer of C-130H aircraft, the facilitation of an associated commercial maintenance contract, and the sale of Bushmaster vehicles during the year. In addition, the office managed 43 disposals projects and 21 international sales projects.

Gate reviews

Since its inception in 2009, the program has conducted more than 500 formal reviews. All major projects are now in at least their third year of annual review. Metrics data for the past three years indicates improving project performance.

Sustainment gate reviews are currently being trialled for eight sustainment products. Full implementation in 2014-15 will involve around 30 reviews annually on a portfolio of about 66 significant products.

88 DEFENCE ANNUAL REPORT 2013-14

Negotiation Cell

The DMO has established a Negotiation Cell to improve its internal negotiation skills and general business acumen. The Negotiation Cell provides DMO project teams and line management with direct support in the preparation and conduct of negotiations. It is establishing and maintaining a standardised suite of negotiation training, and building internal DMO skills in negotiation and general business acumen.

Looking ahead

The DMO continues to drive reform across all elements of its business operations. Current priorities for reform are focused on:

• identifying the core, minimum set of DMO roles required to deliver assigned outcomes while minimising overheads and costs through:

- optimising the efficiency of retained DMO functions

- prioritising DMO activities and resources to meet the ADF’s urgent operational demands, deliver government-approved projects, and sustain the force-in-being

- revising contract and performance arrangements to better use industry capacity and capability

• reducing the cost of equipment sustainment by around 10 per cent in real terms (against 2007-08 baseline levels) through increasing the use of productivity- and performance-based contracts, renegotiating or recompeting support contracts, improving processes, reforming supply chains, reducing targeted inventories, achieving internal efficiencies to reduce the APS workforce, and working with Defence to deliver shared services reforms

• improving schedule performance through better schedule estimation and risk assessment methodologies

• contributing to continuous tailoring of the two-pass process for major project approvals, as recommended in the 2008 Mortimer Review, to ensure the right balance in the preparatory work for project approvals, commensurate with their scope and complexity

• providing specialist commercial and technical/engineering and through-life support advice earlier in the capability development process to ensure that technical and safety risks, costs and appropriate acquisition and sustainment strategies are considered in the development of capability options

• enhancing the DMO’s advice to the Government on industry capacity to deliver required capabilities and on the accuracy of cost and schedule estimates for new equipment

• embedding stronger controls to heighten personal accountability and provide lead indicators for management intervention

• providing a range of assistance programs to improve the skills, productivity, innovation and competitiveness of Australian defence industry sectors, with a focus on those areas deemed critical to retaining Indigenous industry capacity to deliver approved Defence projects and through-life support for existing platforms.

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DMO financial performance The DMO receives around 90 per cent of its funding from Defence under agency agreements. The remaining 10 per cent of its funding is provided via a direct appropriation and own-source revenue. The DMO’s audited 2013-14 financial statements are included in Volume Two of this report.

An assessment of DMO financial performance in 2013-14 against budget projections is provided online.

2013-14 financial summary

The total net resourcing available to the DMO in 2013-14, as published in the Portfolio Budget Statements 2014-15, was $11,214 million. This comprised:

• payment from Defence: $10,033.4 million

• special account opening balance: $247.1 million

• appropriation receipts: $872.4 million

• non-appropriation receipts: $60.6 million.

During the course of a financial year, the DMO budget may vary for a number of reasons, such as changes in demand by Defence, foreign exchange fluctuations or reprogramming of cash flow to meet contractual obligations. Table 6.1 reflects the financial resource position taking all of these factors into consideration as at 30 June 2014. The 2013-14 total actual resourcing was higher than the estimate above largely due to a planned appropriation reduction of $35.4 million that was included in the 2014-15 PBS estimate that will not occur until Parliament repeals the relevant Appropriation Acts, which is expected to occur after 1 July 2016. Reported appropriation revenue in the financial statements remains at $907.8 million as reported in the Portfolio Budget Statements 2013-14. The remainder of the variation is due to an increase in non-appropriation receipts of $35.8 million offset by a decrease in appropriation receipts from other agencies (Defence) of -$44.8 million, resulting in total resourcing of $11,240 million.

The DMO made payments of $10,910.8 million in 2013-14, resulting in a special account closing balance of $329.1 million as at 30 June 2014. The special account balance remains within the Official Public Account, providing the flexibility to meet cash flow requirements across financial years to align with capability delivery across DMO programs.

The DMO’s audited 2013-14 financial statements are included in Volume Two of this report.

90 DEFENCE ANNUAL REPORT 2013-14

Resource summary Table 6.1: DMO resource statement 2013-14

Actual available appropriations for 2013-14 $’000

Payments made 2013-14 $’000

Balance remaining 2013-14 $’000

(a) (b) (a-b)

Ordinary annual services[1,2]

Departmental appropriation

Departmental appropriation 907,791 832,432 75,359

Total departmental appropriation A 907,791 832,432 75,359

Special account (departmental and administered)

Opening balance 247,136

Appropriation receipts[1,2] 907,791

Appropriation receipts

- other agencies[3] 10,033,372

- adjustment for other agencies[3,4] -44,754

Non-appropriation receipts to special accounts 60,569

Adjustment for non-appropriation receipts to special accounts[5] 35,844

Interest[6] -

Payments made[7] 10,910,842

Closing balance 329,116

Total special account B 11,239,958 10,910,842 329,116

Less appropriations drawn from annual or special appropriations above and credited to special accounts C 907,791 832,432 75,359

Total resourcing and payments (A+B-C) 11,239,958 10,910,842 329,116

Notes

3. Appropriation Bill (No. 1) 2013-14 and Appropriation Bill (No. 3) 2013-14.

4. Reported as $872,432,000 estimated actual in the Portfolio Budget Statements 2014-15. The variation is because the planned appropriation reduction will not occur until the relevant Appropriation Acts are repealed by Parliament.

5. Appropriation receipts from Defence credited to DMO’s special accounts.

6. Adjustment is variance between estimated actuals as at Portfolio Budget Statements 2014-15 and actual available appropriations for 2013-14 as at 30 June 2014.

7. Adjustment is variance between estimated actuals as at Portfolio Budget Statements 2014-15 and actual receipts for 2013-14 as at 30 June 2014.

8. Administered interest received from overseas bank accounts, which is remitted to the Official Public Account.

9. Excludes GST.

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Appropriations and other resources

The DMO workforce and operating expenses (along with industry programs) are directly appropriated by government through Appropriation Bill (No.1). The DMO has flexibility over the allocation of its workforce across the various programs it delivers. Variations for programs from the revised budget to the actual result may reflect changes to activity levels prescribed by Defence, budgeted cash flow adjustments for movements in foreign exchange rates or delivery of programs with fewer resources. Programs 1.1 and 1.2 were largely funded by payments from Defence for goods and services provided, as set out in the materiel acquisition agreements. Program 1.3 was funded largely through direct appropriation.

Table 6.2: Budgeted expenses and resources for DMO outcome

Outcome 1: Contributing to the preparedness of the Australian Defence organisation through acquisition and through-life support of military equipment and supplies

2013-14 revised budget $’000

2013-14 actual result $’000

Variation[1] $’000

Program 1.1: Management of Capability Acquisition

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 & 3) 267,393 218,645 -48,748

Special accounts 3,513,632 4,146,203 632,571

Expenses not requiring appropriation 8,877 5,906 -2,971

Subtotal for Program 1.1 3,789,902 4,370,754 580,852

Program 1.2: Management of Capability Sustainment

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 & 3) 507,363 525,056 17,693

Special accounts 5,052,741 5,318,482 265,741

Expenses not requiring appropriation 18,835 13,914 -4,921

Program for Output 1.2 5,578,939 5,857,452 278,513

Program 1.3: Provision of Policy Advice and Management Services

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 & 3) 97,622 93,581 -4,041

Special accounts 2,449 0 -2,449

Expenses not requiring appropriation 5,204 11,653 6,449

Subtotal for Program 1.3 105,275 105,234 -41

Total departmental expenses for Outcome 1 9,474,116 10,333,440 859,324

Note

1. The variation is between the actual result as disclosed in the DMO’s audited 2013-14 financial statements and the revised budget published in the Portfolio Additional Estimates Statements 2013-14.

Detailed information on income, assets, balance, cash flow and special accounts is available online.

92 DEFENCE ANNUAL REPORT 2013-14

FEATURE |

Joint Strike Fighter aircraft deliver new air capability On 23 April 2014, Prime Minister Tony Abbott and Senator David Johnston, Minister for Defence, announced the approval of an additional 58 F-35A Lightning II Joint Strike Fighter (JSF) aircraft. The approval encompassed the infrastructure, training and support systems necessary to sustain the full JSF capability.

Including the 14 previously approved aircraft, Australia’s JSF program has a total approved budget of $15.5 billion and is the nation’s biggest approved defence project.

The announcement came as Australia’s first two JSFs approached completion on the production line at the Lockheed Martin facility in Fort Worth, Texas. After final acceptance, the aircraft will be ferried to the F-35 international pilot training centre at Luke Air Force Base, Arizona, where Australian pilot training will begin in 2015.

The commencement of pilot training will be an important milestone in delivering a JSF initial operating capability in 2020. The operations and training in the United States will allow the RAAF and the DMO to gain an understanding of the activities required to introduce the JSF into service in Australia.

During 2013-14, the JSF program delivered the necessary ground-based information systems to Luke Air Force Base and negotiated agreements with the United States and other nations necessary for pooled training.

As aircraft deliveries commence and training begins to ramp up in the United States, the F-35 JSF Facilities Program is also moving ahead on the Australia-based elements of the program. During 2013-14, the program completed the business case for its $1.5 billion worth of infrastructure. Works are planned to commence in 2015, when the program will

begin to deliver significant economic benefit through construction, particularly in the Katherine (Northern Territory) and Newcastle (New South Wales) areas.

The overall JSF program has also delivered significant benefits to the Australian aerospace industry. To date, Australian industry has won contracts worth US$412 million in support of the JSF’s development and production. There is an Australian-made part in every JSF in service. Through the production phase, Australian industry is expected to secure work to the value of at least US$1.5 billion, and many more opportunities are expected in sustainment.

Setting up the Australian JSF sustainment solution will be one of the biggest challenges and one of the highest priorities for the program office over the next few years. Effectively operating and maintaining the JSF, with its unparalleled sensors, network and stealth technologies, will be a significant challenge that will demand new thinking from the Air Force, the DMO and Australian industry.

F-35A in flight

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The DMO outcome: Contributing to the preparedness of the Australian Defence organisation through acquisition and through-life support of military equipment and supplies

Summary The DMO has three programs:

• Program 1.1: Management of Capability Acquisition

• Program 1.2: Management of Capability Sustainment

• Program 1.3: Provision of Policy Advice and Management Services

Program 1.1 Management of Capability Acquisition Through Program 1.1, the DMO acquires and delivers to Defence, in a transparent and accountable manner, specialist military equipment to enable the delivery of military capability to the Government. Equipment is purchased by DMO acquisition projects in accordance with materiel acquisition agreements between Defence and the DMO. The agreements define what is to be delivered, how much it is to cost and when it is to be delivered. The DMO currently has 222 active major and minor projects.

Program 1.1 accounted for around 42 per cent of the DMO’s expenses in 2013-14. This generated around $3.8 billion of military assets for Defence; non-capitalised project expenses were about $0.4 billion.

Table 6.3: Program 1.1 deliverables for top 30 major projects

Deliverable Performance summary

General Manager Joint, Systems and Air

Aerospace Systems

Battlefield Airlift—Caribou Replacement— AIR 8000 Phase 2

This project will acquire a fleet of 10 United States military configuration C-27J aircraft as a military-off-the-shelf procurement through the US Foreign Military Sales program, with only minor changes to meet Australian airspace regulations.

The project established the interim C-27J logistics system, procured aircraft spares and support equipment, undertook activities to establish an interim US-based training system and undertook airworthiness certification activities in preparation for first aircraft acceptance in the third quarter of 2014 and the commencement of flight and maintenance training in the fourth quarter of 2014.

Growler Airborne Electronic Attack Capability— AIR 5349 Phase 3

This project will deliver a United States Navy common airborne electronic attack capability based on the EA-18G Growler aircraft and ALQ-99 Tactical Jamming System.

Foreign military sales cases for acquisition of aircraft and associated systems and support were established with the United States Navy, which also reached agreement with its primary supplier, Boeing, for the major aircraft production contracts. Growler aircraft production is on schedule; the software development effort is well underway and has achieved early development milestones.

Seven Air Force aircrew commenced training on the EA-18G at the United States Naval Air Station, Whidbey Island, Washington.

Airborne Early Warning and Control Aircraft—AIR 5077 Phase 3

The project provided Defence with an airborne early warning and control capability based on six E-7A Wedgetail aircraft and associated supplies and support.

The project made progress on software modifications to remove a small number of limitations agreed to under the final commercial settlement. In-Service Software Build 2 was released in April 2014, while the project also delivered the majority of residual spares to support the final operational capability. In-Service Software Build 3 will be released during 2014-15.

94 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

Air to Air Refuelling Capability— AIR 5402

This project will deliver five new-generation Airbus A330 multi-role tanker transport aircraft (known as the KC-30A in Air Force service) and associated through-life support infrastructure for the fleet.

The project delivered the penultimate upgrade to the simulation training devices, began the avionics modification program (which is the first phase of the overall aircraft modification) and re-entered the Aerial Refuelling Boom System flight test program.

This project continues to be managed as a project of concern (see Table 6.6).

Electronic Systems

Battlespace Communications System (LAND)— JP 2072 Phase 2A

This project will deliver and introduce into service new digital radios, provide combat radios and ancillary equipment to replace the Raven, Wagtail and Pintail fleets for most of the land force, and establish the mature support system for combat and tactical data radios.

Delivery and introduction into service of the new digital radios are 60 per cent complete. Initial materiel release and initial operating capability were achieved. Interim support arrangements are in place, while two major support contracts for the life-of-type of the new radios are being tendered or evaluated.

Next Generation Satellite Communications System—JP 2008 Phase 4

This project will deliver high-priority components of the next-generation satellite communication system to support the ADF. The capability is being delivered under a memorandum of understanding with the United States Government. Wideband Global Satellite Communications System Satellites 1 to 6 are now fully operational. The interim anchoring system has achieved materiel releases 3 and 4 milestones and is fully operational. Offshore anchoring has achieved materiel release and is fully operational.

The project achieved final materiel release on 26 June 2014.

Battle Management System—LAND 75 Phase 3.4

This project will deliver mounted battle management systems, including command post systems, to the ADF in cooperation with Land 125 Phase 3A (Dismounted Systems) and JP 2072 Phase 1 (Combat Radio System).

The project delivered to the Army all installations of the battle management systems into Bushmaster protected mobility vehicles and selected logistic vehicles. Installations into G-Wagon vehicles were also progressed during the year. The completion of design acceptance activities and introduction into service processes will continue in 2014-15.

Military Satellite Capability— Wideband Terrestrial Terminals —JP 2008 Phase 3H

This project will deliver 51 medium-sized transportable satellite terminals for ADF units, along with onsite spares kits, spares, and support and test equipment. The terminals will allow early use of the Wideband Global Satellite Communications (WGS) system by introducing medium-sized WGS-certified terminals to the ADF land forces.

The project completed acceptance testing of the transportable satellite terminals, and introduction into service training has concluded. The initial tranche of 24 terminals was delivered to the ADF as part of the initial materiel release requirement. Action is underway to improve the power supply system in the context of contemporary Australian Standards. The final tranche of terminals will be delivered in 2014-15.

Anzac Electronic Support System Improvements— SEA 1448 Phase 4A

This project will provide the Anzac class frigates with an improved tactical electronic support mission system for improved passive situational awareness and early threat warning. The project includes the provision of a mission system and emulators for training and a ground-based support segment for mission system programming.

The project completed a preliminary design review in October 2013 and a critical design review in February 2014.

Joint Command Support Environment— JP 2030 Phase 8

This project is an evolutionary acquisition project established to deliver a cohesive and integrated joint command support environment for the efficient and effective planning and conduct of ADF operations for Headquarters Joint Operational Command (HQJOC).

The project delivered the third release Evolution 2 capability to HQJOC and the combat net radio interface capability.

Table 6.3 (continued)

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Deliverable Performance summary

Helicopter Systems

Future Naval Aviation Combat System Helicopter— AIR 9000 Phase 8

This project will deliver 24 MH-60R Seahawk Romeo helicopters to replace the capability of the current 16 S-70B-2 Seahawk Classic helicopters. The acquisition of the Romeos will enable the Navy to provide eight helicopters concurrently embarked in Anzac class frigates and the new Hobart class air warfare destroyers. The remainder will be based at HMAS Albatross in Nowra, New South Wales, conducting training and maintenance.

The first four aircraft were accepted in the United States, initial introduction into service training for aircrew and maintainers commenced, Australian certification activities were completed, and construction of the dedicated Seahawk Romeo facilities at HMAS Albatross and HMAS Stirling, in Western Australia, began.

Multi-Role Helicopter— AIR 9000 Phase 2/4/6

This project will deliver 47 MRH-90 multi-role helicopters, associated support, and training systems for the Army and the Navy.

New aircraft are now being accepted ahead of the revised production schedule that came into effect on 1 July 2013. Nine MRH-90s were accepted during 2013-14, raising the fleet total to 29 aircraft. A retrofit program to modify 12 early production aircraft to the final contracted production configuration standard is also in progress; five aircraft have been accepted out of this program to date. The first of two full flight and mission simulators was accepted into service at Oakey, Queensland, in August 2013; the second arrived in Townsville, Queensland, in May 2014 and will be accepted by the end of 2014.

The project is being managed as a project of concern (see Table 6.6).

New Air Combat Capability

Joint Strike Fighter Aircraft—AIR 6000 Phase 2A/2B

This project will deliver 72 conventional take-off and landing F-35 Joint Strike Fighter (JSF) aircraft and associated support and training systems. Three operational squadrons and one training squadron are planned to enter operational service between 2020 and 2023 to replace the ageing F/A-18A/B Hornet aircraft.

In April 2014, in addition to the previously agreed 14 aircraft, the Government agreed to the acquisition of an additional 58 JSFs and associated support systems and infrastructure.

Production of Australia’s first two JSFs is significantly advanced and is on schedule for delivery and acceptance in 2014-15.

The program delivered its first set of ground support information systems to the international pilot training centre at Luke Air Force Base, Arizona. These systems will be used to support Australia’s first two JSFs and the commencement of US-based Australian pilot training in 2015.

General Manager Land and Maritime

Guided Weapons Branch[1]

Standard Missile-2 Conversion and Upgrade—SEA 4000 Phase 3.2

This project is converting the existing inventory of surface-to-air standard missiles from rail to canister launch configuration for employment with the Hobart class air warfare destroyer, and upgrading a proportion of the missiles from a Block IIIA to a Block IIIB configuration. The project is also upgrading the Standard Missile Intermediate Level Maintenance Facility to enable the recertification and maintenance of Block IIIB missiles.

The project delivered Block IIIB missile components and commenced the Standard Missile Intermediate Level Maintenance Facility upgrade.

Lightweight Torpedo Replacement— JP 2070 Phase 2

This project will deliver MU90 anti-submarine lightweight torpedoes integrated with the Anzac and Adelaide class frigates.

The Navy successfully test-fired an MU90 torpedo against a realistic target. Final operational capability for the MU90 lightweight torpedo system was declared in September 2013, and in-service support arrangements were implemented for the system.

Bridging Air Combat Capability— AIR 5349 Phase 2

This project is delivering new weapons and countermeasures for the F/A-18F Super Hornet.

The project delivered AIM-120 advanced medium-range air-to-air missile training assets and operational AGM-154 joint stand-off weapons, and continued to work with the United States Navy and Air Force to progress the delivery, integration and introduction into service of new weapons and countermeasures for the F/A-18F Super Hornet.

Table 6.3 (continued)

96 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

Munitions Branch[2]

Mulwala Redevelopment Project—JP 2086 Phase 1

This project will deliver a modernised propellant manufacturing facility at Mulwala, New South Wales, to replace the existing but now obsolete plant. The modernised facility will meet more stringent and up-to-date environmental and work health and safety standards.

The project continued the commissioning of the modernised propellant manufacturing facility at Mulwala. Approximately 40 per cent of the contracted capability was delivered during the year, and formal testing of the remainder of the plant began in June 2014. A number of technical issues identified throughout the commissioning process will continue to be addressed through a collaborative approach involving all stakeholders to enable the delivery of the remaining elements of the plant at the earliest possible opportunity.

This project continues to be managed as a project of concern (see Table 6.6).

Air Warfare Destroyer

Air Warfare Destroyer Build— SEA 4000 Phase 3

The Air Warfare Destroyer (AWD) Build Project is being delivered under an alliance-based contracting arrangement between the Commonwealth (the DMO), ASC AWD Shipbuilder Pty Ltd and Raytheon Australia. The project will deliver three Hobart class destroyers and their support systems to the Navy.

The project achieved a number of key milestones. For Ship 01, HMAS Hobart, block consolidation was completed, stern release was finalised and combat systems crew training commenced in the US. The keel for Ship 02, HMAS Brisbane, was laid in February 2014. HMAS Hobart system fit-out is well advanced, work is underway on all HMAS Brisbane blocks, and more than 80 per cent of Ship 03

blocks are under construction.

While the ships are coming together, shipbuilding aspects of the program are well over the target cost because of poor productivity.

The Government commissioned an independent review of the project in February 2014, which led to the announcement in June 2014 of a reform strategy to ensure that the program delivers this capability effectively and efficiently.

This project is being managed as a project of concern (see Table 6.6).

Land Systems

Field Vehicles and Trailers—Overlander Program— LAND 121 Phase 3A/5A

LAND 121 Phase 3A is delivering 2,146 unprotected lightweight and light Mercedes-Benz G-Wagon vehicles, together with specialist modules and 1,799 Haulmark trailers, to provide the Army and the Air Force with tactical mobility for training and the flexibility to undertake a wide range of tasks in difficult off-road conditions.

The issue of production vehicles, modules and trailers to units, the refinement of through-life support, and vehicle operator and maintainer training continued. At 30 June 2014, 1,209 vehicles and 802 trailers had been delivered into service Australia-wide.

Bushmaster Protected Mobility Vehicles—LAND 116 Phase 3

This project will deliver 1,015 vehicles in seven variants (troop, command, mortar, assault pioneer, direct fire weapon, air defence and ambulance). They will provide protected land mobility to Army units and the Air Force Airfield Defence Guards. The vehicles comprise 737 vehicles that are to meet the current capability requirement, an additional 70 to meet future operational attrition and 208 to maintain critical skills at the Thales Bendigo site.

The project delivered 84 vehicles to the Army, bringing the total number delivered to Defence to 922.

Additional Lightweight Towed Howitzers— LAND 17 Phase 1C.1

This project will deliver 19 M777A2 lightweight towed howitzers by 1 April 2015, in addition to the 35 lightweight towed howitzers that were delivered under LAND 17 Phase 1A. The delivery of the LAND 17 PH1C.1 Lightweight Towed Howitzers Capability Assurance Program (CAP) is currently subject to consideration by the Government.

The project took delivery of the 19 M777A2 howitzers in Australia. The howitzers are being prepared for issue to the Army. The project also supported the Capability Development Group in the development of the capability proposal for LAND 17 PH1C.1 CAP.

Overlander— Medium/Heavy Capability, Field Vehicles, Modules and Trailers— LAND 121 Phase 3B

This project will deliver 2,707 medium and heavy vehicles in a number of variants, including recovery trucks, integrated load handling systems and flatbeds, in both protected and unprotected configurations. To complement the acquisition, approximately 3,800 modules and flatracks will be supplied and around 1,700 trailers will be acquired to increase payload carrying capacity.

The project entered into contracts with Rheinmetall MAN Military Vehicles Australia for vehicles and modules and Haulmark Trailers Australia for the trailers. Contract start-up has commenced, and product design for both vehicles and trailers is underway.

Table 6.3 (continued)

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Deliverable Performance summary

Digital Terminal Control System— LAND 17 Phase 1B

This project is to deliver 152 digital terminal control systems. This capability allows artillery forward observers and joint terminal attack controllers to identify targets with greater accuracy through the use of precision targeting software. It also provides the means to digitally request fire support from land, sea or airborne weapon systems.

The project achieved initial materiel release, which was defined to include the initial 56 systems bought under an operationally urgent procurement and an additional 76 systems with updated software, and the provision of the associated operator training for those systems.

Artillery Replacement 155 mm Howitzer— LAND 17 Phase 1A

This project is scoped to deliver 35 M777A2 lightweight towed howitzers, a command and control battle management system based on Advanced Field Artillery Tactical Data System software and course correcting fuzes. The project has introduced into service all 35 howitzers and the final version of the battle management system.

The project achieved final materiel release for the towed howitzers and the battle management system and is being prepared for closure.

Maritime Systems

Amphibious Deployment and Sustainment— JP 2048 Phase 4A/B

This project is scheduled to deliver two Canberra class Landing Helicopter Dock (LHD) vessels and associated LHD support system comprising engineering information training, spares, documentation and test equipment.

The project undertook initial contractor sea trials of the first LHD but was unable to complete all trials required for delivery in accordance with the planned schedule. Continuing resource limitations within BAE Systems and the maritime sector have resulted in schedule slippage of the first LHD from early 2014 to late 2014. The second LHD currently remains on schedule for quarter three 2015, but is at risk of being affected by the same industry sector limitations that caused delay on the first LHD.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2B

This project will deliver a phased array radar system to the Anzac class frigates for target indication/ tracking, mid-course guidance and target illumination for the Evolved Sea Sparrow Missile, and a new dual navigation radar system to replace the existing navigation radar suite.

The project delivered the phased array radar system with the software upgrade to both the phased array radar and combat management systems in HMAS Perth and HMAS Arunta. The capability was successfully tested operationally in August 2013 in HMAS Perth. HMAS Arunta is currently undergoing sea trials after upgrade and HMAS Anzac, the third ship, is almost complete. The upgrade on HMAS Warramunga is progressing.

Amphibious Watercraft Replacement— JP 2048 Phase 3

This project will acquire 12 new watercraft to operate as landing craft with the two Canberra class LHD ships. The landing craft will provide an organic ship-to-shore connection in support of Defence’s amphibious capability, enabling the transport of personnel and equipment between the LHD ships and the shore, including where there are no fixed port facilities or prepared landing facilities.

The project received and accepted the first batch of four LHD landing craft from prime contractor Navantia and completed the installation of military communication and navigation systems.

Standard Missile-1 Missile Replacement— SEA 1390 Phase 4B

This project upgrades four Adelaide class frigates with the Standard Missile-2 surface-to-air mid-course guidance mode missile capability. It will also acquire the weapons and provide missile technician training.

The project achieved Navy Operational Release for the ship weapon system capability and established principal support for three years for the system and its software through United States Foreign Military Sales. Direct commercial arrangements continue to be progressed. Project closure is planned for 2014-15.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2A

As part of the Anti-Ship Missile Defence Program, this project will provide the Anzac class frigates with an upgraded combat management system and introduce an infra-red search and track system to the platform.

The project installed an upgraded combat management system and an infra-red search and track system in HMAS Perth. HMAS Arunta is currently on sea trials, and HMAS Anzac, the third ship, is almost complete. The upgrade on HMAS Warramunga is progressing.

Table 6.3 (continued)

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Deliverable Performance summary

General Manager Submarines

Future Submarines

Future Submarine— Acquisition— SEA 1000 Phase 1A

This project will deliver a replacement conventional submarine capability as the Collins class is progressively withdrawn from service on reaching the end of its life.

The project continued to refine operational specifications for the Future Submarine based on informed cost and capability considerations. Formal agreement was reached on Collins intellectual property rights, after which studies on the feasibility of evolving the Collins submarine as an option for the Future Submarine began. This work proceeded in parallel with the completion of investigations into the suitability of European military-off-the-shelf submarines. At the same time, the Future Submarine Program made substantial progress in defining the key Australian requirements that would need to be satisfied by any design option, while also building the core technical competence that will be essential for the robust management of Australia’s future submarine capability. Additionally, an independent cost analysis was initiated to improve the fidelity of program costings.

Notes

1. In April 2014, Guided Weapons Branch commenced transition to Helicopter Systems Division. The move took effect on 1 July 2014.

2. In April 2014, Munitions Branch commenced transition to Land Systems Division. The move took effect on 1 July 2014.

The following information is available online:

• top 30 major projects by expenditure • previously reported top 30 projects • closed major materiel acquisition agreements • closed minor materiel acquisition agreements • new major projects • new minor projects • top 10 minor projects by deliverables and expenditure.

Program 1.1 key performance indicators

The key performance indicators for Program 1.1 are to deliver major and minor capital equipment within the agreed parameters for schedule, scope and budget. The detail varies with each project and is specified in the materiel acquisition agreements.

Australian Defence industry involvement in major capital equipment projects is reported online.

Table 6.3 (continued)

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Program 1.2 Management of Capability Sustainment

The objective for DMO Program 1.2 is to sustain the ADF and its capabilities. Each financial year, the DMO enters into an agency-level bilateral materiel sustainment agreement with each Defence capability manager. The agreement details the level of performance and support required, within an agreed price, as well as key performance indicators by which service delivery will be measured.

In 2013-14, the program supported 118 products for Defence, which ranged from high-grade specialised military platforms (such as the C-17 Globemaster III heavy airlift aircraft, Super Hornet F/A-18 multi-role aircraft, Anzac class frigates and Seahawk helicopters) to clearance diving systems and patrol boats, as well as commodity-type items such as rifles and ADF clothing.

Support to ADF operations is the highest priority for the DMO. Significant effort is put into ensuring that our forces are effectively deployed and maintained. This task includes ensuring that the forces are supported from the outset, from training and exercise regimes to well-serviced and maintained platforms, and are equipped with the supplies and support needed to do the job. This outcome is only achieved through planning and implementing efficient procurement activities and maintenance programs.

Program 1.2 accounted for around 57 per cent of the DMO’s expenses in 2013-14.

Table 6.4: Program 1.2 deliverables for top 30 sustainment products

Deliverable Performance summary

General Manager Joint, Systems and Air

Aerospace Systems products

Aerospace Systems Division provides through-life support to 13 aircraft types, including the F/A-18A/B Classic Hornet, F/A-18F Super Hornet, E-7A (airborne early warning and control), AP-3C Orion, C-17A Globemaster, KC-30A (multi-role tanker/transport), C-130J and PC9. The Division also supports a number of advanced flight simulators and ground-support equipment fleets.

Achievements in 2013-14 included:

• implementing efficiency initiatives, including incentive-based support contracts

• managing the ageing Classic Hornet to maintain the capability until at least 2021

• supporting operationally deployed weapon systems, such as the C-17A, C-130J and AP-3C

• continuing to finalise in-service support arrangements for the F/A-18F, KC-30A and E-7A

• developing acquisition and sustainment strategies for future aerospace projects

• providing support to emergent operational capabilities, such as the Heron unmanned aerial system

• replacing the ageing aircraft cargo loader fleet.

Airborne Early Warning and Control System (CAF20)

The Airborne Early Warning and Control system, comprising six E-7A Wedgetail aircraft, fixed and deployable mission support systems, flight deck and mission simulators and two software laboratories, is sustained principally through a performance-based commercial support and training service arrangement.

Performance against sustainment levels agreed with the Air Force improved as support systems matured towards final operational capability in 2015. This work included the development and release of the second in-service software build, and maturing the logistics system to support the increasing flying rate of effort.

The prime in-service support contract was novated from Boeing Defence, Space and Security in the United States to Boeing Defence Australia, providing both efficiencies and greater Australian industry involvement. A five-year contract extension was negotiated during the year and became operative in July 2014.

100 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

F/A-18 Hornet Weapon System (CAF02)

Seventy-one F/A-18 Classic Hornet 9 (CH) aircraft and associated training systems are supported by a range of commercial contracts and Air Force workshops. The major challenge in supporting the CH is the increased maintenance requirements of an ageing aircraft fleet.

The CH Logistics Management Unit continued to work closely with the Air Force and industry partners to remediate ageing issues, ensuring that required aircraft serviceability levels were achieved. Effort centred on bedding in the CH deeper maintenance contract, which merged all deep maintenance events in one contractor venue incorporating a combined contractor and military workforce. The CH Structural Refurbishment Program also concluded after the last aircraft completed modifications in early 2014.

F/A-18F Block II Super Hornet Weapons System (CAF21)

The sustainment of 24 F/A-18F Super Hornets and their systems, weapons and support infrastructure has continued to mature. Current performance targets for aircraft availability have been consistently achieved. Flying program requirements have been met despite the lack of some long-lead spares that are yet to be delivered.

As a result of adjustments to the Air Combat Capability Plan, there have been a number of initiatives to assess and develop enhanced support arrangements in recognition of the extended planned withdrawal date for the Super Hornet, as well as the introduction of the AIR 5349 Phase 3—Growler Airborne Electronic Attack Capability.

P-3C/AP-3C Orion Weapons System (CAF04)

The P-3 capability includes 17 aircraft and a range of ground-based systems. The capability is supported through the P-3 Accord and a range of commercial and foreign military support arrangements.

The fleet continues to be maintained under the more resource-intensive ‘safety-by-inspection’ program, comprising additional targeted structural inspections, repairs and/or structural element replacements. Boeing Defence Australia completed the P-3 aircraft repaint program in June 2014.

C-130J-30 Weapon System (CAF06)

The C-130J fleet comprises 12 aircraft that provide air logistics support, aero-medical evacuation, airborne operations, and search and survivor assistance and training.

During 2013-14:

• revised product support arrangements were established for the C-130J spares previously managed under C-130H arrangements

• a new performance-based contract was entered into that reduced the cost of the propulsion system support

• aircraft maintenance efficiencies were implemented by the C -130J through-life support contractor and operational squadron to further reduce costs and increase aircraft availability

• upgrades to the self-protection capability through project AIR 5416 4B1 achieved final materiel release

• the Selective Availability Anti-Spoofing Module compatible embedded Global Positioning System trial installation was completed.

Lead-In Fighter Hawk 127 Weapon System (CAF03)

The Hawk 127 Lead-in Fighter weapon system comprises 33 Hawk Mk 127 aircraft, a full-scale fatigue test article, mission planning systems, a computer-based training system and a tactical weapon system training system.

The aircraft and training devices are sustained through a prime contract with BAE Systems Australia and a number of smaller contracts that focus on specific areas of Hawk sustainment, such as fatigue testing and repainting. The main performance-based contract provides all in-service support other than operational maintenance, which is currently performed by the Air Force. The in-service support contract, which commenced on 1 July 2013, transitioned during 2013-14 and all key performance metrics were met.

The fleet corrosion control and repaint program continued throughout the year.

KC-30A Weapon System (CAF22)

Five KC-30A multi-role tanker/transport aircraft were accepted by the Commonwealth between June 2011 and November 2013. Transition of the KC-30A into service continues. The in-service support arrangements are maturing as the acquisition project office continues to deliver remaining capability requirements.

An additional aircraft was committed to support the completion of remaining acquisition project flight test activities. One aircraft is assigned continuously to an acquisition-managed modification program.

Sustainment performance in 2013-14 against the agreed Air Force requirements was limited by hail damage to two aircraft in December 2013.

Table 6.4 (continued)

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Deliverable Performance summary

C-17 Heavy Air Lift Weapons System (CAF19)

The Australian C-17 fleet comprises six aircraft, an aircrew training simulator and other training devices. Primary support for the C-17 is through foreign military sales arrangements with the US Air Force, which provides comprehensive engineering, maintenance and global supply support to the US and all international operators of the C-17.

The new cargo compartment trainer was accepted in November 2013, increasing the scope of training for loadmasters in Australia.

The C-17 fleet achieved final operational capability in February 2014.

Special Purpose Aircraft (CAF09) The current special-purpose aircraft fleet consists of two Boeing business jets and three Bombardier Challenger CL604 aircraft. The aircraft are secured under a commercial lease

arrangement with General Electric Capital Holdings and maintained by Northrop Grumman Integrated Defence Services.

The aircraft leases and maintenance support arrangements were extended until mid-2017, ensuring the continued delivery of the capability while Defence manages the acquisition of, and transition to, a replacement capability.

PC-9/A Weapon System (CAF10)

The PC-9/A system comprises 63 aircraft. The fleet requires significant management attention to treat problems such as fatigue, parts obsolescence and corrosion, which are customary in an ageing fleet.

To ensure that the fleet can operate to its planned withdrawal date, the DMO began a range of reliability assessment and correction measures in 2013-14.

Electronic Systems products

Electronic systems are sustained through 17 system program and system support offices based on materiel sustainment agreements with five capability managers. The offices cover command and control systems, communications, satellites and tactical interoperability, airspace surveillance and control systems, and electronic warfare systems.

Achievements in 2013-14 included:

• the safe delivery of required sustainment despite growth in demand and increasing obsolescence • analysis, planning and execution of a major radio fleet transition phase as the second tranche of JP 2072 (Future Combat Net Radio) equipment is delivered and rolled out • the management of sustainment of all ADF large aircraft infra-red countermeasures systems, covering multiple current

and future airborne programs • the sustainment of the joint counter improvised explosive device capability • remediation of air traffic control and air defence support arrangements in preparation for possible life-of-type extensions

and to achieve reform • the treatment of obsolescence issues at the Woomera Test Facility, South Australia • the development of support concepts for narrowband satellite communications, the identification of further efficiencies

and the remediation of obsolescence issues effecting tactical satellite terminal equipment • the sustainment of maritime, land and air tactical electronic warfare capabilities, including continued support to address changes in targeted technologies and the remediation of systems returning from operations.

Wide Area Surveillance (CAF13)

The wide area surveillance capability consists of three over-the-horizon-radars based in Longreach, Queensland; Laverton, Western Australia; and Alice Springs, Northern Territory, and is known as the Jindalee Operational Radar Network (JORN). The capability is remotely operated by the Air Force from an operations centre at RAAF Base Edinburgh, South Australia.

The JORN Priority Industry Capability Support Program was implemented. The aim of the program is to retain specialised engineering skills through minor capability enhancements, urgent remediation of obsolescence issues, system improvements and risk reduction for future major acquisitions.

Command and Intelligence Systems (CA40)

The product schedule addresses the sustainment of a suite of hardware and software products used to support Defence’s specialised command and control environment. It includes modular deployable local area networks (DLANs); geospatial stand-alone and deployable systems; special operational command support systems; and command, control and intelligence products, along with the associated deployable standard operating environment (DSOE) upon which many of the applications function.

Systems deployed on operations were supported, including through transition and remediation action on systems as the ADF progressively withdraws from operations. The design of the next-generation DLAN and its supporting DSOE was completed. Subject matter advice was provided on DLANs, the DSOE design and build and geospatial architecture to emerging and current projects with deployable components. Sustainment was also begun on a range of deployable network equipment being acquired by the Chief Information Officer Group’s Strategic Communications Modernisation Program—Land.

Table 6.4 (continued)

102 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

Air Traffic Control Capability (CAF12) The air traffic management capability consists of fixed and deployable radars, navigation aids, display and data processing systems, communications systems and related training aids at Defence sites

throughout Australia.

The required sustainment outcomes and strategic reform targets were met, while system obsolescence was mitigated.

Naval and Shore Communication Systems (CN22)

This product provides sustainment services for the Defence high frequency (DHF) and very low frequency (VLF) communications systems, modernised maritime communication systems and ship- shore communications.

The delivery of contracted support for the naval and shore communication operational systems, the change out of antenna guy wires for the VLF system and the remediation of workshop equipment and hazardous chemical products across the product suite continued. Multiple-platform baseline software upgrades for the maritime communications system were undertaken, the Navy’s global maritime distress and safety-at-sea-system radios began to be replaced, and obsolete components in some of the Navy’s communication switching equipment were replaced.

The fleet-wide support and service delivery contract for the Satellite TV @Sea capability for naval platforms as part of an overall Quality of Life at Sea program for deployed personnel was established. Changes were made to extend the network operation support contract and support services contract to provide for the continued support of the DHF communications system, inclusive of the integrated Nullarbor capability, until May 2019.

Battlespace Communications Systems (CA33)

The capability consists of two primary fleets of communications equipment. The combat net radio fleet is a range of man-portable and vehicle-mounted radios for use by ground forces on the battlefield. The battlefield telecommunications network fleet is a satellite and trunking system that provides a voice and data capability to a deployed brigade. These fleets are maintained through sustainment contracts with Thales Australia, Saab Australia and BAE Systems Australia.

Planning for the transition of the first phase of the JP 2072 generation of communications equipment from acquisition to sustainment occurred. Planning for the establishment of mature maintenance and support contracts with Harris Corporation and Raytheon Australia began. Concurrently, elements of the old-generation fleet were identified for retirement as the new-generation radios are introduced into service. This activity is critical to minimise longer term sustainment costs.

Helicopter Systems products

Helicopter Systems Division provides through-life support to seven rotary-wing weapons systems through system program offices based at Nowra, New South Wales, for Navy Aviation; and Brisbane and Oakey, Queensland, for Army Aviation. The offices provide fleet-wide engineering, repair parts, and manage contracts for deeper level maintenance and replacement of ageing and obsolescent equipment for the helicopters. In addition, a combined project and sustainment team to manage the through-life support of the Army’s tactical level unmanned aerial systems has been established within the Division in Brisbane.

The highest priority sustainment task in 2013-14 remained the support of operational deployments, including the embarked Seahawk Classics in ships serving in the Middle East. Chinooks and Shadows were supported on operations in the Middle East until late 2013. Achievements in 2013-14 included: • improved MRH-90 availability as a result of the implementation of significant contractual reforms negotiated in 2013 • recognition of the requirement for a ‘step-change’ in industry’s Tiger sustainment performance • the establishment of the new MH-60R Seahawk Romeo logistic support framework • the commencement of Black Hawk and Seahawk Classic withdrawal from service • the integration of Guided Weapons Branch into the division.

In April 2014, the Guided Weapons Branch of Explosives Ordnance Division was transitioned into Helicopter Systems Division.

Multi-Role Helicopter (CA48) MRH-90 availability and flying rate of effort continued to improve steadily during 2013-14, but remained below contracted levels. Prime contractor performance has been sharply focused on

improving outcomes following the introduction of significant reforms to the sustainment contract agreed in May 2013 and effective from 1 July 2013.

Armed Reconnaissance Helicopter Weapons System (CA12)

As a result of continuing maintenance and supply-chain problems, the Tigers underflew the 2013-14 plan by 7 per cent. A strategic review of the Tiger sustainment contract, focusing on reducing the cost of ownership and improving support to the Army, has begun.

Table 6.4 (continued)

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Deliverable Performance summary

S-70A-9 Black Hawk Weapons System (CA11)

The fleet of 34 Black Hawks contributes to the Army’s air mobile and special operations capabilities. The Black Hawk is being phased out of service in lock step with the introduction of the MRH-90. Black Hawk operations at the School of Army Aviation in Oakey, Queensland, ceased in December 2013, and the drawdown of Black Hawks from the 5th Aviation Regiment in Townsville, Queensland, commenced. Black Hawk operations with the 6th Aviation Regiment in Holsworthy, New South Wales, will continue until the mid-2018 planned withdrawal date.

The Black Hawk was supported throughout 2013-14 by a combination of maintenance contracts, mainly held with BAE Systems Australia and Asia Pacific Aerospace, Army in-unit maintenance, and support from helicopter manufacturer Sikorsky.

S-70B-2 Seahawk Weapons System (CN03)

The fleet of 16 Seahawk Classic helicopters contributes to the Navy’s anti-surface and antisubmarine warfare capabilities. The Seahawk was supported throughout 2013-14 by a combination of maintenance contracts, mainly with BAE Systems Australia and Asia Pacific Aerospace, Navy in-unit maintenance, and support from helicopter manufacturer Sikorsky.

The phase-out of the Seahawk Classic fleet has begun, ahead of the introduction of the new Seahawk Romeo capability.

General Manager Land and Maritime

Guided Weapons Branch products[1]

Guided Weapons Branch acquires and sustains ADF guided weapons. Two guided weapons system program offices provide sustainment logistics, engineering and maintenance support at RAAF Base Amberley, at Defence Establishment Orchard Hills and at the Torpedo Maintenance Facility in Western Australia.

ADF guided weapons include maritime and land strike missiles, air combat missiles, land and air defence missiles, aerial smart bombs and underwater weapons, including light- and heavy-weight torpedoes. The majority of these weapons are supported by a combination of US Government Foreign Military Sales arrangements, commercial contracts and Commonwealth in-house maintenance activity. Varying degrees of industry support are provided by Thales, MBDA, Boeing, Raytheon and Euro Torp.

Achievements in 2013-14 included:

• the satisfaction of all Navy, Army and Air Force demands for guided weapons

• the continuing remediation of the Harpoon missile inventory

• the completion of facilities upgrades at the Surface Warfare Complex, Defence Establishment Orchard Hills, New South Wales, for maintenance of the Block IIIB Standard missile, and at the Torpedo Maintenance Facility, Fleet Base West, for maintenance of the Mark 54 lightweight torpedo.

Guided Weapons Navy, Army and Air Force (CN38, CA60, CAF33)

Navy guided weapons products include the Harpoon missile, Standard missile, Evolved Sea Sparrow missile, Mark 48 heavyweight torpedo, Mark 46 lightweight torpedo, MU90 lightweight torpedo, Encapsulated Harpoon Certification test vehicle, Danish mine disposal charge and Stonefish exercise mine.

All operational and raise, train and sustain demands for Navy guided weapons were met.

Army guided weapons products include the FGM-148 Javelin missile, RBS70/Bolide missile and AGM-114 Hellfire missile.

All operational and raise, train and sustain demands for Army guided weapons were met.

Air Force guided weapons products include AIM-132 advanced short range air-to-air missile, AIM 120 advanced medium-range air-to-air missile, AIM-9M and X Sidewinder missiles, AGM-154 C/C1 joint stand-off weapon, AGM-158 joint air-to-surface stand-off missile, joint direct attack munitions, high-explosive and inert bombs and laser-guided bomb kits.

All operational and raise, train and sustain demands for Air Force guided weapons were met.

Munitions Branch products[2]

The Munitions Branch, which transitioned to Land Systems in April 2014, is responsible for the acquisition and sustainment of non-guided explosive ordnance systems for the ADF, including the management of strategic contracts for munitions supply with Thales and Chemring. In addition, it is responsible for JP 2086 Mulwala Redevelopment Project and the Domestic Munitions Manufacturing Arrangements Project.

Achievements in 2013-14 included:

• the development and implementation of a detailed plan to transition out of the current arrangements for domestic manufacture of munitions, propellant and high explosives • the repatriation of a significant quantity of munitions from Afghanistan in preparation for a reduction in Australian forces • a revision of munitions target stockholdings to reflect greater confidence by the Services in effective inventory management • ministerial consideration of options for future domestic munitions manufacture.

Table 6.4 (continued)

104 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

Explosive Ordnance—Navy, Army & Air Force (CN37, CA59, CAF32)

All munitions demands in support of operations were met within the required timeframes. Navy, Army and Air Force requirements for munitions in support of training were mostly met. The exceptions were invariably due to unforeseen supply-chain disruptions resulting from a dramatic reduction in global munitions production. The exceptions were managed in conjunction with the Navy, the Army and the Air Force to minimise their impact on training. Improvements in inventory management and reporting facilitated reductions in target stockholdings, which enabled planned strategic reform savings targets to be met.

Land Systems products

Land Systems Division is responsible for the sustainment of the following materiel, managed in conjunction with the Army, the Navy, the Air Force and Joint Health Command as the lead capability managers:

• armoured fighting, combat support and field vehicles • commercial and general service vehicles • engineer, surveillance and simulation systems • weapon systems, from small arms to missiles • medical and dental equipment, health systems and combat rations • ADF clothing and personal combat equipment • the national inventory of munitions.

Achievements in 2013-14 included:

• meeting the support requirements of forces on operations and conducting post-operational equipment remediation in accordance with agreed plans

• delivering the agreed level of support to the ADF, within budget

• completing a comprehensive review of key performance indicators and health indicators in consultation with Defence capability managers

• progressing the development and training of the division’s sustainment workforce

• commencing trials to optimise vehicle fleet sustainment by using vehicle health usage monitoring systems

• absorbing Munitions Branch from Explosive Ordnance Division.

ADF Clothing (CA39)

ADF clothing comprises about 21,300 line items of personal clothing, footwear and other items manufactured by the textile, clothing and footwear industry.

During 2013-14, new clothing lines introduced included new parade footwear for the three Services, including RM Williams boots for the Army; a new general-purpose jacket for the Army; a new general-purpose uniform for the Air Force; cadet footwear; and wet and foul-weather garments. Continuing procurement to meet the ADF’s clothing and footwear requirements was undertaken to support operations as well as for raise, train and sustain activities.

General Service B Vehicle Fleet (CA45)

The general service vehicle fleet consists of approximately 8,700 light, medium and heavy wheeled vehicles, including protected (up-armoured) and unprotected variants, used in Australia and on operations overseas. Defence is progressively replacing most vehicles in the fleet under Project LAND 121.

During 2013-14, full support continued to be provided for operations, including the procurement of deployable all-terrain vehicles and the acquisition of additional up-armoured sports utility vehicles. In addition, work continued to upgrade 135 stores and ammunition modules to improve operator safety and functionality.

A key focus for the fleet has been to ensure that the required capability levels are maintained, and the fleet reduced in size as new capability is delivered under Project LAND 121. As part of the fleet reduction program, about 1,350 vehicles were removed from service.

Australian Defence Organisation Commercial Vehicles Fleet (CA19)

The Defence Commercial Vehicle Program uses commercially available motor vehicles for administrative purposes. Currently, the fleet has around 5,600 vehicles and trailers under management. The fleet ranges from passenger sedans through to heavy rigid trucks and touring coaches. The whole-of-government fleet services provider, sgfleet, supports the fleet.

During 2013-14, the fleet replaced around 1,200 vehicles as part of its normal replacement cycle. This included 880 passenger and light commercial vehicles, 39 medium cargo trucks, 250 light trailers and 25 medium buses. Under the program, around 880 vehicles were released for disposal during the year.

Table 6.4 (continued)

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Deliverable Performance summary

Health Systems (JHC01) The health systems fleet is made up of pharmaceutical, medical and dental consumables and medical and dental equipment. These are generally commercial off-the-shelf items.

During 2013-14, a prime vendor contract for the provision of medical and dental consumables was established to achieve efficiencies in their management, the replacement of defibrillators was completed, and ADF health requirements for operations and raise, train and sustain activities were satisfied.

Maritime Systems products

The DMO supports maritime capability through cost-effective materiel design, maintenance engineering and logistic support to platforms, equipment and systems. These sustainment services are provided under a structure of system program offices that are collocated regionally with the Navy forces and groups by ship class. The offices manage the delivery of services through a variety of outsourced commercial contracts.

Under the Rizzo Review, the Maritime Capability Business Model Health Check program has been used to assist the Navy and the DMO business units to embed policy, procedural and cultural changes and assess the maturity and effectiveness of their processes to deliver end-to-end sustainment.

Implementation of the Navy Inventory Procurement Office strategic sourcing initiative continued. In 2013-14, there was progress in the formalisation of through-life support for Navy life-rafts and the development of support contracts for LM2500 gas turbines and MTU diesel engines and components.

Improvement of configuration management and the maintenance baseline of major surface ships and other platforms continued.

Other achievements in 2013-14 included:

• the awarding of the guided missile frigate FFG class group maintenance contract • the awarding of the Garden Island dock operating and reticulated services contract • the transfer of the Ocean Shield to the Australian Customs and Border Protection Service on 1 July 2014 • the awarding of the Canberra class landing craft heavy capability support coordinator contract.

Fuels and Lubricants—Navy, Army & Air Force (CN26, CA43, CAF18)

Petrol, oil and lubricant products are procured under long-term contracts and provided to Defence operational and support elements and visiting foreign forces. The Fuels Technical Regulatory and Quality Control Framework is maintained for the conduct of Services’ operations and technical data integrity.

Provision of these products was completed to meet requirements. Under the implementation of the Wraith Review of the petroleum supply chain, Joint Logistics Command has assumed control of the fuel supply chain for the ADF. The DMO’s Joint Fuels and Lubricants Agency will now formally transfer to Joint Logistics Command.

Anzac Class Frigate (CN02)

Planned outcomes were the provision of continuing sustainment of materiel capability to meet the Navy’s operational requirements, the continued implementation of the Anzac class group maintenance contract, continued inventory management reforms and the continuation of anti-ship missile defence refit work on the designated ships under Project SEA 1448 Phases 2A and 2B.

Planned maintenance was completed, including additional pre-anti-ship missile defence work in HMAS Warramunga. Materiel support to capability was provided to the Anzac class frigates undertaking activities associated with operations Slipper, Sovereign Borders and Southern Indian Ocean. HMAS Arunta is undergoing sea trials following the completion of an anti-ship missile defence upgrade and refit program.

Adelaide Class Frigate (CN01) The support objective is to maintain the materiel capability of the Adelaide class frigates through the provision of materiel support and continuing maintenance of the ships and associated equipment,

systems and operator training facilities. Planned maintenance was completed in the four guided missile frigates. A contract for combat system support, the signing and commencement of the group maintenance contract and the extension of the integrated materiel support contract were achieved; together, they will provide the long-term contracted support required to sustain the class.

Mine Hunter Coastal (CN14) The support objective is to maintain the materiel capability of the Huon class coastal mine-hunter vessels and associated training equipment through the provision of materiel support and continuing

maintenance of the in-service ships. Scheduled ship maintenance was completed during 2013-14, along with additional maintenance. Detailed designs for the upgrade of the firefighting system and the upgrade of the combat systems are progressing as planned.

Table 6.4 (continued)

106 DEFENCE ANNUAL REPORT 2013-14

Deliverable Performance summary

Armidale Class Patrol Boat (CN09) The objective is to provide the agreed support services required for the sustainment of 14 Armidale class patrol boats.

While operational requirements were largely achieved during 2013-14, boat availability was affected by a class-wide structural design defect that required extensive rectification work. Along with significant growth in corrosion, this caused maintenance overruns. There has been increased effort to address the root cause of system failures and to instigate the upgrade program for the boats to reduce the level of operational damage. A sustainment reform program is being conducted to improve the delivery of materiel support to the ships and to provide options to optimise supply. Implementation of an improved asset management regime commenced with the development of a rolling hull-survey program.

General Manager Submarines

Collins Submarines program

Performance: • Availability: 105 per cent of an increased availability target was achieved on the path towards benchmark performance, despite three unscheduled dockings and the significant impact associated with a fire in HMAS Waller. • HMAS Rankin full-cycle docking was completed early against the integrated master schedule. • HMAS Collins main generator room and motor room hull cuts were completed (proving new maintenance techniques

as part of continuing sustainment reforms). • HMAS Farncomb full-cycle docking commenced (the first of the new two-year full-cycle dockings). Reforms: • The two-year transition phase of the in-service support contract with ASC Pty Ltd was completed on schedule on

30 June 2014; the DMO and ASC entered the first performance period of this contract on 1 July 2014. • Substantial improvements were made to the combat system support contract with Raytheon Australia, paving the way to evolve this contract into a performance-based contract. • Substantial improvements were made to the sonar support contract with Thales Underwater Systems, paving the way

to evolve this contract into a performance-based contract. • Industry management responsibility for Collins class inventory increased to 98 per cent (by line item). • Increased engineering authority was awarded to industry members operating within the Collins authorised engineering

organisation, including an expansion of platform engineering authority and the introduction of combat system and sonar engineering authority.

Collins Class Submarine (CN10) Reforms to improve Collins class sustainment were catalysed by the Coles Report of November 2012. The report’s recommendations will take a number of years to implement fully; however, after returning

to Australia for a progress review in early 2014, Coles assessed the turnaround in Collins sustainment as ‘remarkable’.

Sustainment experienced several setbacks in 2013-14, including a merchant vessel colliding with HMAS Sheean while the boat was berthed in July 2013 and a fire in HMAS Waller in February 2014. The repair of HMAS Waller is still being scoped, but is expected to continue well beyond 2013-14. The achievement of the agreed aggregate 2013-14 submarine availability target despite these setbacks reflects the emerging resilience of Collins sustainment. While the impact of the HMAS Waller fire is expected to be felt beyond the end of 2013-14, it is not expected to delay the restoration of Collins class sustainment to Coles’s benchmark by 2016-17.

Notes

1. In April 2014, Guided Weapons Branch commenced transition to Helicopter Systems Division. The move took effect on 1 July 2014.

2. In April 2014, Munitions Branch commenced transition to Land Systems Division. The move took effect on 1 July 2014.

Program 1.2 key performance indicators

Program 1.2 key performance indicators vary with each sustainment product and are specified in the relevant materiel sustainment agreements.

Further information on the top 30 sustainment products by expenditure is available online.

Table 6.4 (continued)

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Program 1.3 Provision of Policy Advice and Management Services

The objective for Program 1.3 is to meet government, ministerial, Defence and DMO expectations and time frames for the provision of policy advice and support, including the delivery of programs to support the Australian defence industry. The key performance indicator involves meeting these expectations and time frames. The deliverables include specialist legal, procurement and contracting policy and services, industry programs and engagement, and acquisition and sustainment advice.

Program 1.3 accounted for about 1 per cent of the DMO’s expenditure in 2013-14. Expenses under this program included:

• procurement policy advice to Defence and the DMO and contracting services for the DMO and various Defence procurement activities

• the delivery of industry programs and engagement activities for the Government and Defence

• corporate governance and reporting to meet the Government’s requirements.

Table 6.5: Program 1.3 deliverables

Deliverable Performance information

Specialist legal, procurement and contracting policy and services High-quality and timely commercial law and contracting support was provided to DMO projects, system program offices and other business areas. Significant work

was done to maintain the currency of and continue to improve Defence procurement and contracting policy and practice outcomes.

The DMO continued to provide direct legal and contracting support to DMO project and system project offices. Significant work was also done to simplify and streamline procurement policy and practice, with an emphasis on improving the commerciality of procurement outcomes and reducing the costs of doing business with Defence.

Acquisition and sustainment advice High-quality and timely advice was provided through regular reports, ministerial correspondence and briefings on acquisition and sustainment issues.

Defence industry, programs, engagement and advice to both the Defence portfolio and the Government

The DMO provided advice to Defence and the Government on industry capacity and capability. Defence’s industry programs continued to be delivered, providing practical and targeted assistance in a range of areas, including skilling, export support and innovation.

Ministerial support

A key function of the DMO is to provide policy advice and support to the Minister for Defence, the Assistant Minister for Defence and the Parliamentary Secretary for Defence. The DMO continues to provide accurate responses to ministerial representations, other parliamentary questions and ministerial submissions. In 2013-14, the DMO met ministerial, government, Defence and DMO expectations and time frames for the provision of policy advice and support.

108 DEFENCE ANNUAL REPORT 2013-14

DMO governance and accountability The current Ministerial Directive was issued on 28 July 2008 to the then CEO of the DMO. The DMO continues to operate within the principles established by the directive. The directive establishes the accountability of the CEO to the minister to achieve the following outcomes:

• timely, accurate and considered advice in the CEO’s role as principal adviser to the minister on equipment acquisition and fleet sustainment

• efficient and effective acquisition and through-life support of materiel for Defence capabilities

• sound management of financial and other resources, operating within the budget and meeting statutory requirements for preparing financial statements

• an appropriately skilled and experienced workforce while providing a working environment that attracts and retains people

• high-quality governance and management, implementing agreed reform initiatives and embedding continuous improvement within business processes

• savings and efficiencies for reinvestment in priority areas in Defence

• appropriate representation of Australia internationally in the CEO’s role of National Armaments Director.

DMO senior committees Three senior committees provide advice and direction and oversee performance within the DMO (Figure 6.2). These are:

• the Executive Committee

• the Council Chairs’ Forum

• the Materiel Audit and Risk Committee.

Executive Committee

The Executive Committee advises the CEO on directing the DMO. The committee is chaired by the CEO and meets monthly to review strategic direction and performance. As required, the committee meets as the Strategic Budget Committee to focus on strategic investment and budget management.

Council Chairs’ Forum

The Council Chairs’ Forum addresses DMO enterprise business performance risks and issues against the DMO’s functions of procurement, finance management, project management, materiel engineering, sustainment management and materiel logistics, work health and safety, human resources, industry engagement and administration. The Deputy CEO chairs the forum, which meets quarterly.

Materiel Audit and Risk Committee

The independent Materiel Audit and Risk Committee allows the CEO to meet his obligations under the Financial Management and Accountability Act 1997. The committee monitors and recommends improvements to the DMO’s governance, risk management, internal controls and financial reporting.

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Figure 6.2: DMO senior committees

Branch heads to directors

Division heads to branch heads

General managers to division heads

Chief Executive Officer to general managers

Council Chairs’ Forum

DMO Procurement Council Materiel Engineering Council

Finance Council Project Management Council

Sustainment Management and Materiel Logistics Council Work Health and Safety Council

DMO Executive Committee

Defence Industry Innovation Board

Materiel Audit and Risk Committee

D

A

D

A

D

A

D

A

D

A

A

Key: A=Advise D=Direct

A D

Projects of concern The projects of concern regime is a proven process for the senior management of seriously underperforming projects. Once troubled projects have been identified through triggering one or more of the early indicators and warnings thresholds and have undergone a diagnostic gate review to identify specific and measurable remediation objectives, a recommendation may be made to the Government to add a project to the formal list of projects of concern. Once listed, the primary objective of the regime is to remediate these projects through implementing an agreed plan to resolve any significant commercial, technical, cost and/or schedule difficulties. Projects of concern receive targeted senior management attention and are required to report more regularly to the Government.

Since its introduction in early 2008, the DMO has been working closely with industry, Defence and the Government to successfully remediate these projects with the goal of returning them to a standard management regime.

Significant movements in 2013-14 included:

• the successful remediation of electronic support measures upgrade for AP-3C Orion aircraft (AIR 5276 Phase 8B) and the subsequent removal of the project from the list of projects of concern

• the addition of the Air Warfare Destroyer (SEA 4000 Phase 3) project to the list following a critical report from the Australian National Audit Office and a comprehensive independent review confirming a significant cost overrun.

Table 6.6: Current projects of concern at 30 June 2014

Project name Project number/phase Date added

Collins class submarines sustainable and projects CN 10 November 2008

Multi-role tanker transport aircraft air-to-air refuelling capability AIR 5402 October 2010

Multi-role helicopter (MHR-90) AIR 9000 Phase 2,4,6 November 2011

Direct fire support weapons LAND 40 Phase 2 December 2012

Mulwala redevelopment project JP 2086 Phase 1 December 2012

Air Warfare Destroyer Build SEA 4000 Phase 3 June 2014

A list of former projects of concern by expenditure is available online.

DEFENCE ANNUAL REPORT 2013-14 111

3PART THREE GOVERNANCE AND ACCOUNTABILITY

112 DEFENCE ANNUAL REPORT 2013-14

CHAPTER 7 Reform and cultural change

Management of reform—key achievements In September 2013, the then Minister for Defence agreed to the new Strategic Reform Operating Model to replace the 2009 Strategic Reform Program. Oversight of strategic reform in Defence rests with the Chief Operating Officer, on behalf of the Secretary and the Chief of the Defence Force.

Existing reform activities have transitioned to business as usual, and are being managed by the relevant Group or Service. Groups and Services are now responsible for the design, implementation, monitoring and measurement of new reform activities within the Strategic Reform Benefits Framework, which provides a benefits and reporting framework to track future reform progress.

While benefits are realised over the life of a reform activity, progress milestones and long-term benefits will be monitored through inclusion in Defence Annual Plans and measured through periodic enterprise reports to the Defence Committee. This focus on benefits realisation will allow Defence to better understand changes that occur because of reforms. It will also facilitate the more effective allocation of resources to reform activities that are shown to be adding value to Defence, reducing or reshaping effort where reforms are not achieving the desired outcomes as they are being implemented.

March 2014 marked the second anniversary of Pathway to Change: Evolving Defence Culture, Defence’s cultural reform program that is both a statement of cultural intent and a strategy for addressing the recommendations from a range of culture reviews into aspects of Defence and ADF culture.

Activities under Pathway to Change will continue through 2014-15 and 2015-16. However, its success will only be evident over time and in concert with other cultural change reform activities being undertaken by the Groups and Services. Continuing reform remains a strategic imperative for Defence.

Cultural change In the two years since Pathway to Change was launched, substantial progress has been made. As at 30 June 2014, 148, or 84 per cent, of the 175 key actions and recommendations from the six culture reviews were implemented.

Key achievements included:

• establishing the Sexual Misconduct Prevention and Response Office (SeMPRO)

• an increased focus on improving diversity and inclusion within Defence

• the release of the ADF alcohol management strategy.

Defence has developed measures and metrics for evaluating Pathway to Change progress against six key levers for cultural change and reinforcement. In the past two years, some positive trending results against each lever show:

• perceptions of Defence commitment to creating a diverse workforce is at a very high level and has remained stable from February 2013 to February 2014

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DEFENCE ANNUAL REPORT 2013-14 113

• perceptions of the extent to which Defence colleagues, supervisors, commanders/managers and Defence senior leaders behave with integrity is at a very high level and has remained stable from February 2013 to February 2014. Of the workplace behaviours included in Defence’s YourSay survey, ‘behave with integrity’ is one of the behaviours reported as observed most frequently in the workplace

• the proportion of women in initial training establishments is increasing

• the proportion of women attending courses that facilitate promotion is increasing

• perceptions that it is worthwhile to report unacceptable behaviour are high, although there is room for improvement in actual rates of reporting

• the percentage of unacceptable behaviour cases finalised in less than six months is improving. Progress in this area is expected to improve now that better reporting of complaints is in place

• perceptions about the accessibility of flexible working arrangements are increasing, particularly for the ADF.

In order to embed and further develop cultural reform, Defence has begun a four-year collaboration with the Australian Human Rights Commission (AHRC). The AHRC has substantial knowledge of Defence and our objectives, as a result of Sex Discrimination Commissioner Elizabeth Broderick’s two reviews into the treatment of women at Australian Defence Force Academy (ADFA) and in the ADF more broadly. This collaboration will see joint ADF/AHRC teams visiting 10 establishments annually, with the potential for additional site visits to deal with particular issues, as well as assisting and advising Defence with thematic work to support Pathway to Change.

To support the work of the AHRC, Defence has implemented a research program to provide an annual ‘health check’ of the perceptions of cultural reform and the organisational climate across Defence. This program is in addition to Defence standard attitudinal research, the YourSay program, which measures workforce attitudes and behaviours across a range of topics. Both of these programs contribute directly to the measurement of cultural change in Defence.

We have demonstrated our commitment to the cultural reform program by substantially completing the implementation of the culture reviews within a two-year time frame. Defence is also committed to making a concentrated effort over a further three-year period towards embedding the changes needed to achieve the enduring cultural change.

Improved reporting of sexual misconduct

SeMPRO was launched in July 2013 as one of Defence’s key responses to the Review into the treatment of women in the Australian Defence Force Academy (ADF)—Phase 2 report. The office supports victims of sexual misconduct in Defence and provides advice and guidance to commanders and managers on the management and reporting of sexual misconduct.

SeMPRO is the single point of data collection, analysis and mapping of sexual misconduct within Defence. The office collects demographic data of alleged reports of sexual misconduct, including de-identified data on the victims of these reports.

Over time, the collection of sexual misconduct data will enable the identification of behavioural trends or areas of prevalence of sexual misconduct to enable Defence to enhance strategies for prevention and response. A particular focus will be Defence’s sexual misconduct education and prevention programs by allowing for the development of customised and targeted packages.

The report on sexual misconduct in Defence is available online. It provides a baseline for future reporting of sexual misconduct in Defence. We will use this data to inform the understanding of sexual misconduct trends within Defence to facilitate a quantitative assessment of the progress of Defence’s cultural reform efforts in relation to sexual misconduct.

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Table 7.1: Completed or closed recommendation on employment pathways for APS women in Defence, by theme, as at 30 June 2014

Theme Status of recommendations

Theme 1— Committed leadership support

Recommendation 1.1—Developed a Defence Diversity and Inclusion Strategy and Implementation Plan.

Recommendation 1.2—Amended SES performance agreements to record leadership commitment to diversity and inclusion.

Recommendation 1.3—Established internal and inter-agency rotation programs for SES bands 2 and 3.

Recommendation 1.4—Delivered pilot unconscious bias awareness training and coaching across ranks and levels.

Recommendation 1.5—Increased number of women on senior leadership committees.

Theme 2— Talent management and succession planning

Recommendation 2.1—Developed an EL1 talent management program which includes a facilitated shadowing and coaching component.

Recommendation 2.2—Developed an EL1 talent management program designed to provide a 50:50 gender ratio, ensuring over-representation of women.

Recommendation 2.3—Consolidated various graduate programs.

Theme 3— Workplace flexibilities

Recommendation 3.1—Amended policy to enhance and support workplace flexibility.

Recommendation 3.1—Conducted review of customer access channels for workplace flexibilities information.

Theme 4— Attraction, recruitment and selection

Recommendation 4.1—Developed branding and attraction strategy for APS recruitment.

Recommendation 4.2—Developed EL 2 refresher programs.

Recommendation 4.3—Developed online recruitment guide and fact sheets and mandated gender balance on recruitment panels.

Recommendation 4.4—Developed a common induction process to raise awareness of staff and manager responsibilities and obligations under APS employment.

Recommendation 4.5—Arranged for the Directorate of Senior Officer Management to provide a centralised approach to recruitment and selection activities for the SES.

Theme 5— Support and development

Recommendation 5.1—Developed formal and organic networking programs with SES women in sponsorship roles.

Recommendation 5.2—Incorporated mentoring components into EL1 and EL2 talent management programs.

Theme 6— Governance and infrastructure

Recommendation 6.1—Developed a diversity awareness training program in collaboration with the Australian Public Service Commission.

Recommendation 6.2—Communicated revised APS Values to all staff.

Recommendation 6.3—Funded backfilling requirements to meet obligations associated with parenting leave—any resource risk associated with parenting leave will be met by the portfolio.

Recommendation 6.4—The APS Women’s Review Oversight Group was established to oversee the implementation of the review’s recommendations and evaluation strategy. This has since been replaced by the Defence Civilian Committee.

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Diversity in Defence Defence values an inclusive and diverse workplace and the unique knowledge, skills and attributes that our people bring to their work. Defence’s capability is maximised by drawing on the diversity of its people, which reflects the variety of personal experiences that arises from differences of culture and circumstance.

Defence has continued its strong commitment to improving the diversity of its workforce through its Centre of Diversity Expertise and the development of the Defence Diversity and Inclusion Strategy, which was endorsed by the Defence Gender Equality and Diversity Council. The strategy draws together, for the first time, the corporate intent for diversity and inclusion. It also articulates the strategic goals that will underpin successful diversity and inclusion in Defence and identifies the immediate diversity priorities for the organisation. Those priorities align with each stage of the employment lifecycle of Defence people—attract, recruit, develop, retain and transition. They also reflect those groups in Defence requiring priority attention—women, Indigenous Australians, people from culturally and linguistically diverse backgrounds, people with disability, and lesbian, gay, bisexual, transgender and intersex (LGBTI) people.

The Diversity and Inclusion Strategy Implementation Plan released in 2013-14 is drawing together all current activities across the organisation. This will allow Defence to expand programs currently delivered to parts of Defence and will clearly identify opportunities to develop further programs and initiatives. The implementation plan will be used to address gaps in the attraction, recruitment and retention of a diverse workforce and will profile Defence as an employer of choice.

Tables providing a more detailed breakdown of diversity statistics are available online.

PERMANENT PERSONNEL

ADF

ONGOING STAFF

APS

WERE BORN IN A COUNTRY OTHER THAN AUSTRALIA

12. 4% 14 .3%

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On 30 JUNE 2014

A TOTAL OF

30 JUNE 2014

PERMANENT

30 JUNE 2013

ONGOING

30 JUNE 2014

ONGOING

30 JUNE 2013

PERMANENT

30 JUNE 2009

ONGOING

30 JUNE 2009

PERMANENT

Country of birth (not Australia) Non-English-speaking background

Country of birth (not Australia, Canada, NZ, UK or US) Indigenous

Have a disability

Note These diversity segments are not mutually exclusive—a person may belong to more than one. The underlying data relies on self-identification on the Defence HR system.

30 JUNE 2014

PERMANENT

30 JUNE 2013

ONGOING

30 JUNE 2014

ONGOING

30 JUNE 2013

PERMANENT

30 JUNE 2009

ONGOING

30 JUNE 2009

PERMANENT

Country of birth (not Australia) Non-English-speaking background

Country of birth (not Australia, Canada, NZ, UK or US) Indigenous

Have a disability

Note These diversity segments are not mutually exclusive—a person may belong to more than one. The underlying data relies on self-identification on the Defence HR system.

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PROFILE | Captain Mona Shindy, RAN

Building Defence capability through cultural understanding Head of the Guided Missile Frigate System Program Office, Captain Mona Shindy, is also the Chief of Navy’s appointed Strategic Adviser on Islamic Cultural Affairs.

As part of her role as Strategic Adviser on Islamic Cultural Affairs, Captain Shindy works to help create a better understanding among Defence members of the Islamic faith, traditions and cultural sensitivities.

Captain Shindy explained how this work helps to improve Defence capability.

‘It gives our people, particularly when working with our close Muslim-allied navies, a better understanding and appreciation of serving Muslims, their needs and how they view the world’, she said.

Another key function of the role is to increase the appeal of the Navy as an employer of choice among the Australian Muslim community.

A member of a large, culturally diverse extended family, and involved in many community and school mentoring programs, Captain Shindy is determined to motivate and inspire others, and is passionate about encouraging more Muslims to think about the ADF and the Navy as a career.

In 2013, Captain Shindy participated in the Community Relations Commission’s outreach to the International Fleet Review. She was also instrumental in the establishment of an Australian Navy Cadet Unit, comprising many culturally diverse groups, in western Sydney.

‘The new cadet unit highlights the wonderful way in which the RAN gives back to the community, enriching and enhancing the lives of young Australians’, she said.

‘Through the Australian Navy Cadets Youth Development Program, teenagers are given great skills for life. I feel privileged to be involved with this and I am excited for the current and future youth of western Sydney.’

Egyptian-born Captain Shindy joined the RAN in 1989 as an undergraduate engineer. She holds a Bachelor of Electrical Engineering (Hons) and a Masters of Commerce (Advanced Major in Organisation and Management Studies) from the University of New South Wales.

She said her career has exposed her to a broad range of technologies and experiences in and around the Defence Materiel Organisation. She has seen everything from active service at the start of the 2003 Iraq War to shore positions involving overseeing myriad complex programs.

‘As a mother, I would like to think I am helping to create a future for my children where they feel understood, included, and respected’, she said.

Captain Shindy said that, although there have been challenges, the ADF and the Navy are well positioned to improve cultural sensitivity. She said she is honoured to be working with the Chief of Navy and Defence on this critical issue.

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Indigenous participation and engagement Defence continues to make progress against the objectives outlined in the Defence Indigenous Employment Strategy 2012-2017. The organisation provides a range of programs for Indigenous Australians with the aim of improving individuals’ access to employment opportunities and working with remote communities on infrastructure and environmental conditions.

For the first time in several years, Indigenous participation in the ADF increased from 1.1 per cent to 1.2 per cent in 2013-14, while the APS participation rate increased from 0.8 per cent to 0.9 per cent.

Several initiatives from the Defence Indigenous Employment Strategy have advanced, including a greater use of ‘affirmative measures’ positions across the Defence APS workforce; the establishment of an Indigenous alumni network; the integration of an Indigenous ‘shadowing’ program; and the launch of the Defence Indigenous University Support Program. This program provides support for up to 10 undergraduate students and up to 10 students undertaking undergraduate enabling programs in a discipline that contributes to Defence capability. It includes enhancing the students’ academic performance and their understanding of Defence through mentoring, work experience and other support.

Through the Australian Public Service Commission’s Indigenous Pathways program, Defence increased its 2013-14 intake for the Defence APS traineeship and cadetship programs. This involved complementary work to develop the programs, enabling better support for participants and their supervisors.

Defence continued to conduct a range of programs to support the recruitment of Indigenous Australians to the ADF. The most notable are the four Indigenous pre-recruitment courses conducted each year and the three Defence Indigenous Development programs. These courses aim to develop participants’ knowledge, confidence and individual skills to prepare them for employment opportunities in the ADF and Defence APS. Key components include culture and values; fitness; military training; preparation for the recruiting process; and language, literacy and numeracy skills.

Defence also continues to support its community engagement role, which includes a number of events across the country during NAIDOC Week and National Reconciliation Week to celebrate Aboriginal and Torres Strait Islander culture.

From left: Mary Dodd, Phillipne Kauri, Belinda Sketchley and Heather Perdjert squish in for a photo during a radio lesson given at the Wadeye cadet unit.

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PROFILE | Chief Petty Officer Ray Rosendale

Indigenous Affairs adviser helps grow a diverse Navy Chief Petty Officer Ray Rosendale is one of the Royal Australian Navy’s proudest change makers. He is helping the Navy grow a professionally diverse workforce, mentoring young Indigenous and Torres Strait Islander members through his role as Navy Strategic Adviser on Indigenous Cultural Affairs.

Chief Petty Officer Rosendale was born in Nambour with family in Hopevale, just north of Cooktown in Queensland. He joined the Navy in 1991 at 26, as what was known then as a Quartermaster Gunner, the category preceding Boatswain’s Mate.

He was inspired to join the Navy by his uncle, and his career so far has included service in HMAS Canberra, patrol boats, selection for Naval Police Coxswain, and now his role as Indigenous Affairs Adviser.

‘When I joined the Navy in the 90s I knew only two senior sailors and two junior sailors who were Indigenous Australians.

‘They spoke to me very honestly about the challenges I might face—it was a different Navy back then. “Life in a blue suit” meant everyone needed to be the same, so if you were different, you actually worked hard at not being different.

‘In the Navy today it makes no difference who you are, where you come from, what you look like, as long as you’re a professional, work hard and follow the Navy’s Values—that’s what’s important. It now makes no difference to the Navy if you’re different.’

Chief Petty Officer Rosendale said a high point for change in his eyes was the New Generation Navy cultural change program, introduced just over five years ago.

‘The new, positive and inclusive culture is so ingrained in how we do business and who we are as an organisation. I know it sounds like the party line but I really truly do see the difference. Now, if something’s not right we fix it’, he said.

A major part of Chief Petty Officer Rosendale’s job is engaging with Indigenous communities throughout Australia to help enhance understanding, and improve Indigenous recruitment.

‘It’s about dispelling the stereotypes either organisation may see of each other. We need to bring them together and educate each other, ultimately making the Navy an employer of choice.’

He said the community leaders he speaks to are very positive about a future friendship with Navy.

‘They understand that when we say we’ll look after their young people we mean it.

‘The young sailors and officers are coming back to their communities as positive role models for other young people, showing them they can be a successful Australian and Indigenous at the same time. They don’t have to give up their cultural heritage to be successful.’

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People with disability

Defence has developed an inclusive workplace through a range of initiatives to support people with disability. This work was given sharper focus in 2014 through the Defence Civilian Committee.

Key Defence APS disability initiatives in 2013-14 included:

• the Defence Intellectual Disability Employment Initiative, which employed 18 people with intellectual disability

• the Paralympian Workplace Diversity Program, which provided 12-month non-ongoing positions for paralympians

• the piloting of a Notification of Reasonable Adjustment Passport, which will document reasonable adjustments in the workplace for people with disability to reduce their need to continually explain their disability or adjustment requirements and facilitate cross-agency transfers of equipment provided for them

• two Australian Disability Enterprises, which provided administrative support to Defence in Canberra and Brisbane

• the application of the Australian Public Service Commission’s pilot RecruitAbility scheme principles to all APS jobs advertised, including graduate positions.

Disability reporting mechanisms

Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007-08, reporting on the employer role was transferred to the Australian Public Service Commission’s State of the Service Report and the APS Statistical Bulletin. These reports are available on the Australian Public Service Commission’s website (www.apsc.gov.au). Since 2010-11, departments and agencies have no longer been required to report on these functions.

The Commonwealth Disability Strategy has been overtaken by the National Disability Strategy 2010-2020, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these reports will be available in late 2014 on the Department of Social Services website (www.dss.gov.au).

Lesbian, gay, bisexual, transgender and intersex people

Defence has a number of initiatives in place that enhance inclusiveness and provide additional support and networks for LGBTI members and employees.

Each year, Pride in Diversity Australia issues the Australian Workplace Equality Index, a benchmarking initiative that assesses an organisation’s commitment to LGBTI workplace practices. Participation in this index provides Defence with comprehensive feedback on the organisation’s LGBTI inclusiveness.

Defence was identified as a Bronze status employer for an LGBTI inclusive workplace at the 2013 Australian Workplace Equality Index Awards. To be awarded Bronze status, employers must achieve a minimum score set by current practice for Bronze status and show a considerable amount of activity in this area through providing sufficient evidence of work in LGBTI workplace inclusion.

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PROFILES |

Building a career through delivering great customer service Natalie Booth

When Natalie Booth began working at Defence almost 30 years ago, she never thought she would be there for so long.

‘I still remember coming in to work on my first day all those years ago’, she said.

‘I just take each day as it comes, but I certainly didn’t think that I would be here to receive an award for 30 years of service.’

During her long career at Defence, Natalie has worked in a variety of areas, including the typing pool, the Word Processing Cell and the Defence Publishing Service. She is currently a member of the team in one of the customer service centres in Canberra, where she said she enjoys a variety of tasks and being part of a supportive team.

‘We have a great working environment—it’s inviting, supportive and fun, which is what keeps us going on the really busy days’, Natalie said.

Dean Wright

Dean Wright commenced with the Department of Defence in 1990 and currently works as a processing centre officer in the Customer Service Centre. His primary responsibilities include

mail deliveries, conference facility support and recycling bin management.

Dean started at Defence through a program for people with disability, an initiative that Defence continues to support today.

He said that mornings are the busiest time of the day for the team at the Customer Service Centre, as they sort and deliver the day’s mail.

‘We work as a team and everyone helps out when it gets really busy’, he said.

Dean said that what he enjoys most about his job is interacting with people.

‘I enjoy getting out of the office and talking to people as I walk around the building delivering mail’, he said.

‘I say “Hi” to everyone and I am always polite because that is how we treat our clients.’

Sam Fogarty

Sam Fogarty joined Defence as a permanent employee in the Customer Service Centre in September 2013. After six months of work experience with the department, Sam was

employed through the department’s Centre of Diversity Expertise, which carries out Defence’s commitment to a fair and equitable workplace by providing a work environment that values and respects diversity.

‘I really enjoyed work experience and wanted to continue working at Defence’, he said.

Sam, whose Dad is a former ADF member, has a passion for collecting old military uniforms. He said he enjoys being in an environment that is so closely related to his hobby and his family connection to the military.

Sam sees a long career at Defence ahead of him, saying he would like to work at Defence for the next 35 years.

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Women in Defence Defence continues to focus its efforts on implementing changes in the workplace to ensure greater representation of women generally, within the organisation and specifically, in leadership positions. Actions are underway to remove direct and indirect structural and cultural barriers preventing women from achieving their full potential and full participation. A key milestone was reached in 2013-14 when the participation rate of women in the ADF reached 15 per cent, an increase from 14.3 per cent at the beginning of the financial year. The Defence APS female participation rate remained steady at 40.6 per cent.

Two reviews, the Review into the treatment of women in the Australian Defence Force—Phase 2 report and the Review of employment pathways for APS women in the Department of Defence, established a strong capability imperative to improve the treatment of, and enhance career opportunities for, women in Defence. A separate report on women in the ADF was included for the first time in the Defence Annual Report 2012-13 and is provided again

this year as a supplement. Progress against Phase 1 of the implementation of the review of employment pathways for APS women in Defence is provided as a supplement (all 20 recommendations are now completed or closed). A forward work plan has been developed, and agreed by the Defence Civilian Committee, to deliver a second phase of activity against the review’s themes, including an evaluation and further development of the various pilot programs.

Other key Defence initiatives for women in 2013-14 included the following:

• The removal of gender restrictions on ADF combat role employment categories continued. The Defence Science and Technology Organisation is continuing to work with all three Services to implement the Physical Employment Standards in line with agreed timings for the removal of gender restrictions to allow direct recruitment into all combat roles by 2016.

• The ADF Recruitment of Women Strategy included the introduction of specialist recruitment teams for women to improve the inquiry-to-enlistment conversion rate of female candidates.

• The Secretary and Chief of Defence Force Gender Equality Advisory Board, which is composed of public and private sector members, continued its work. The advisory board drives and shapes the strategic direction of the Secretary’s and the CDF’s gender equality priorities within the broader Defence cultural reform agenda. The Secretary and the CDF also use the board to incorporate community perspectives on how to make Defence a more inclusive organisation—one that proactively aligns its values and accepted behaviour with evolving community standards.

• Ms Julie McKay was appointed as the CDF’s gender adviser to provide alternative perspectives on gender issues, informed by an expert understanding of wider community and United Nations gender issues.

• Defence implemented a strategy to attract female graduates to the organisation, including through closer engagement with universities that have relatively high numbers of students studying science and engineering.

• A pilot Building Confidence program was initiated to address confidence gaps that have been highlighted as the main barrier to progressing senior women in the APS. A further pilot program addresses unconscious bias.

• A talent management program, designed to ensure that high-performing women are given maximum opportunity to progress their careers, was implemented.

• Senior women’s mentoring and network opportunities were developed.

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FEATURE |

Chief of Army addresses the Global Summit to End Sexual Violence in Conflict According to the Chief of Army, Lieutenant General David Morrison, AO, ‘Sexual violence in conflict is in absolute contradiction to the principles of human decency and respect. It goes against everything we, as professional soldiers, are trained to think, value and achieve’.

Lieutenant General Morrison was a key speaker at the Global Summit to End Sexual Violence in Conflict, held in London from 10 to 13 June 2014.

Natasha Stott Despoja, AM, Australia’s Ambassador for Women and Girls, led the Australian delegation to the summit. The event is a key element of the United Kingdom’s Preventing Sexual Violence in Conflict initiative, of which Foreign Minister Julie Bishop is an official champion.

At the summit, Lieutenant General Morrison joined the Right Honourable Mr William Hague MP, then British Foreign Secretary; Mr John Kerry, United States Secretary of State; and Ms Angelina Jolie, Special Envoy for the United Nations High Commissioner for Refugees. The summit was the largest international event that has yet been held on the issue of sexual violence in conflict, and aimed to create both an irreversible momentum and practical action that has an impact on those in combat.

Lieutenant General Morrison said he was honoured to be invited to attend and to present at the final plenary session on 13 June 2014.

‘As the Chief of Army, I am proud to represent both the Australian Army and the Australian Defence Force at this very significant event’, Lieutenant General Morrison said.

‘Sexual violence in conflict is not just a by-product or a weapon of war. It is an act that devalues people and destroys communities.

‘Stopping sexual violence in conflict begins at home, by promoting diversity and inclusion in our workplaces and in our communities, as well as in our armed forces.

‘We must not accept any act that degrades or dehumanises others’, he said.

Lieutenant General Morrison’s address to the summit is available at http://army.gov.au/ Our-work/Speeches-and-transcripts/United-Nations-International-Womens-Day-Conference.

Chief of Army Lieutenant General David Morrison, AO addresses the Global Summit to End Sexual Violence in Conflict, held in London 10 to 13 June 2014

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Women in the ADF

The Review into the treatment of women in the Australian Defence Force—Phase 2 report, undertaken by Sex Discrimination Commissioner Elizabeth Broderick, established a strong capability imperative to improve the treatment of women and enhance their career opportunities in the ADF. Defence is committed to a range of strategies and targets required to achieve the recommendations of this review.

Recommendation 3 of the review was the publication of a report on women in the ADF as a supplement to the Defence annual report, to include information in the broad areas of:

• women’s participation

• women’s experience

• access to flexible work

• sexual harassment and abuse.

The inaugural ‘Women in the ADF’ report was published as an online supplement to the Defence Annual Report 2012-13, and provided a strong baseline for future reporting of women’s participation and experience in the ADF. A second ‘Women in the ADF’ report has been developed and is provided online. It incorporates feedback from the AHRC’s 2014 audit report to include changes such as the addition of more discussion and analysis of data and making the report more suited to a general audience. The report’s fourth element—sexual harassment and abuse—is now a dedicated report in an online supplement separate to the ‘Women in the ADF’ report, reflecting its relevance to both women and men in the ADF.

The 2013-14 ‘Women in the ADF’ report uses the baseline established for the previous year’s report to compare past and current data. This allows for a more rigorous measurement of what Defence’s cultural reforms have achieved. While cultural reform takes time, the comparison shows that considerable gains have been made in the previous year. For example, the proportion of women in the ADF has increased, women are more likely to access flexible work and women have become much more positive about Pathway to Change.

These improvements indicate the success of the implementation of Commissioner Broderick’s recommendations, and of the broader Pathway to Change strategy. They reinforce the imperative for Defence to remain committed to cultural reform and to continue to make progress.

Removal of gender restrictions from ADF combat role employment categories

On 27 September 2011, the then Minister for Defence announced that the Government had formally agreed to the removal of gender restrictions from Australian Defence Force combat roles. Subsequently, a well-considered and phased five-year implementation plan was developed by Defence and endorsed by the Government in June 2012.

Implementation progress is reflected in Table 7.2. Key milestones fully achieved in 2011-12 and 2012-13 are reported in the Defence annual reports for those years. Key milestones that were not fully achieved in those years and have been achieved this period are included in Table 7.2, in addition to key milestones reported for 2013-14. Additionally, key milestones that extend across the five-year implementation period will continue to be reflected until completed or until 2016-17.

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Table 7.2: Key milestones for removal of gender restrictions from ADF combat role employment categories

Key milestone Status

Corporate

(i) Pathway to Change Substantially met

Pathway to Change has made considerable progress.

(ii) In-service transfers in all Services Met

All combat roles opened to current serving female members.

Navy

(i) Relevant documentation, programs and guidance reviewed or developed Met

(ii) Culture change program developed Substantially met

This milestone is due for completion by December 2015.

(iii) Support mechanisms developed Substantially met

This milestone is due for completion by December 2015.

Army

(i) Cultural change programs implemented

Substantially met

The milestone is due for completion by December 2015.

(ii) Policy/procedur es and training documents amended Substantially met This milestone is due for completion by December 2015.

(iii) In-service transfers arranged Met

All Army combat roles have been opened to current serving female members.

(iv) Physical employment standards trade transfers implemented Met All mechanisms are in place to allow successful trade transfer within the Army.

Air Force

(i) Culture reform initiatives implemented Substantially met

As part of the broader Air Force cultural reform program, activities related to inclusion and the removal of gender restrictions are expected to be completed by December 2015.

(ii) Support mechanisms implemented Met

The Air Force is developing support mechanisms for women undertaking combat roles, in addition to support already available to all Air Force members. The development of these support systems will be informed by independent review and supported by the Air Force Directorate of Organisational Development and Culture.

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ADF alcohol management strategy

The release in June 2014 of the ADF Alcohol Management Strategy and Plan 2014-17 provided new guidelines for the use of alcohol in the ADF and contained a very clear message for all Defence members: the ADF expects all members to be responsible, safe and respectful when drinking anywhere at any time.

The message for the Australian community is that the ADF has adopted a whole-of organisation approach through:

• educating and informing staff about responsible alcohol use

• managing the availability and supply of alcohol

• providing support and treatment to those who require it

• monitoring and responding to alcohol-related incidents.

The ADF alcohol management strategy was developed because Defence, as an organisation, needed to change the culture of alcohol use within the ADF and minimise alcohol-related harm.

In April 2011, an independent advisory panel on alcohol, chaired by Professor Margaret Hamilton, was commissioned and its report, The use of alcohol in the Australian Defence Force (the Hamilton review), was published in March 2012.

The review highlighted that much of the risk, cost and harm associated with alcohol use in the ADF did not arise from the small number of personnel who were alcohol dependent, but from those who participated in occasional episodes of short-term risky drinking and associated risk behaviours.

The ADF worked closely with the Australian Drug Foundation to develop a strategy, plan and a range of supporting tools and resources that incorporates the recommendations of the Hamilton review and draws on evidence from the National Drug Strategy 2010-15 and recommendations from the World Health Organization by incorporating an integrated suite of supply reduction, demand reduction and harm reduction interventions.

The supporting tools and materials include an ADF Behaviour Expectations Statement endorsed by the Chief of the Defence Force, a Leader’s Guide to Alcohol Management and the ADF Event Management Guide.

The ADF Alcohol Management Strategy and Plan 2014-17 is a landmark document that sets out a four-year framework for improving alcohol management and reducing the negative impact of alcohol on the health, safety and capability of the ADF.

The ADF expects all members to be responsible, safe and respectful when drinking anywhere at any time.

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CHAPTER 8 People

Workforce summary Defence budgets for its ADF workforce on a funded strength basis and the APS workforce on a full-time equivalent (FTE)—that is, paid—basis. Defence uses actual FTE—that is, paid strength at a particular date—as the most accurate indicator of current staffing levels. Workforce planning is based on average funded strength and average FTE respectively for the financial year. These averages, while suitable for planning and budgeting purposes, are lag indicators against the actual end-of-year figures.

Defence records some statistical data by headcount; that is, all personnel are counted equally regardless of the number of hours worked, and the figures include all personnel recorded as on duty or on leave, full-time or part-time, with or without pay. This statistical basis is used for gender information, employment categories and location. Defence does not base its workforce planning on headcount staffing figures.

By way of comparison, ADF and APS staffing figures for 2013-14, and for 2012-13, are shown against the three measures in tables 8.1 and 8.2.

Table 8.1: Australian Defence Force—staffing figures 2013-14

ADF staffing measure 2012-13 2013-14 Variation

For workforce planning purposes

Actual funded strength (paid strength as at 30 June) 56,117 56,922 +805

Average funded strength (over the financial year) 56,607 56,364 -243

For other statistical data

Permanent strength (headcount) (on duty/leave and paid/unpaid) 56,159 57,036 +877

Note

Figures do not include the Reserve workforce. Due to the nature of Reserve service, Reservists are counted by headcount rather than average strength and the numbers are not comparable.

Table 8.2: Australian Public Service—staffing figures 2013-14

ADF staffing measure 2012-13 2013-14 Variation

For workforce planning purposes

Actual FTE (paid strength as at 30 June) 21,006 19,988 -1,018

Average FTE (over the financial year) 21,534 20,496 -1,038

For other statistical data

Headcount figure (on duty/leave, full-time or part-time, paid or unpaid) 22,105 21,194 -911

128 DEFENCE ANNUAL REPORT 2013-14

Workforce planning This section provides information on the average workforce strength during 2013-14.

ADF permanent force

Table 8.3 shows details of the ADF permanent force average funded strength for 2013-14. The ADF average strength achievement was 56,364 in 2013-14, a decrease of 243 from 2012-13. These figures include ADF Reservists on continuous full-time service. Average funded strength achievement for continuous full-time service in 2013-14 was 727 (comprising Navy 400, Army 252 and Air Force 75)—an increase of 221 from 2012-13.

The ADF permanent force grew significantly between 2007 and 2011 in response to requirements such as the Hardened and Networked Army, the Enhanced Land Force, the Defence Capability Plan and initiatives from the 2009 Defence White Paper. This growth included a recruitment surge over the period 2007 to 2010.

After reaching a peak in 2010-11, permanent force strength trended downwards until January 2014. It has been increasing since then, and further growth towards the approved allocation is expected in future years.

Table 8.3: ADF permanent force average funded strength (including DMO), 2013-14

2012-13

actual

2013-14 budget estimate[1]

2013-14 revised estimate[2] 2013-14

actual Variation %

Navy 13,760 14,224 13,794 13,862 68 0.5

Army 28,928 29,847 28,833 28,568 -265 -0.9

Air Force 13,919 14,164 13,943 13,934 -9 -0.1

Total average funded strength 56,607 58,235 56,570 56,364 -206 -0.4

Notes

Figures in this table are average strengths; they are not a ‘headcount’. Reservists undertaking full-time service are included. Employees on forms of leave without pay are not included.

1. As published in the Portfolio Budget Statements 2013-14.

2. As published in the Portfolio Additional Estimates Statements 2013-14.

ADF enlistments and separations

The permanent ADF strength (headcount) increased by 877 in 2013-14; this reflects the net difference between enlistments and separations.

The ADF enlisted 6,355 permanent members, made up of 5,157 men and 1,198 women, for the 12 months up to 30 June 2014. This was 1,297 more than in 2012-13.

ADF enlistments can be categorised as ab initio (those with no prior military service) or prior service enlistments. Of the 6,355 permanent members enlisted, 968 entrants had prior military service in either the Reserves, the Gap Year program, another Service or another country, or had previous permanent force service. There were 5,387 ab initio entrants. Some prior service candidates are enlisted against Defence Force Recruiting permanent force entry targets.

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Tables 8.4 and 8.5 provide information about separations during the financial year. More information on ADF separation rates is available online.

Table 8.4: ADF permanent force, 12-month rolling separation rates, 30 June 2013 and 30 June 2014

Twelve-month rolling separation rate (%)

30 June 2013 30 June 2014

Navy 8.9 8.4

Army 12.3 12.4

Air Force 6.3 5.5

ADF 10.0 9.7

Table 8.5: ADF permanent force separations, 2012-13 and 2013-14

Voluntary separations[1] Involuntary separations[2]

Age

retirement

Trainee

separations

Total

2012-13[3]

Navy Officers 87 18 2 67 174

Other ranks 633 237 0 164 1,034

Army Officers 226 61 9 130 426

Other ranks 1,857 757 9 475 3,098

Air Force Officers 157 34 6 35 232

Other ranks 485 85 9 76 655

Total permanent force

Officers 470 113 17 232 832

Other ranks 2,975 1,079 18 715 4,787

Total 3,445 1,192 35 947 5,619

2013-14

Navy Officers 104 23 1 40 168

Other ranks 564 184 1 228 977

Army Officers 212 84 11 139 446

Other ranks 1,667 871 5 564 3,107

Air Force Officers 123 32 13 17 185

Other ranks 399 93 15 88 595

Total permanent force

Officers 439 139 25 196 799

Other ranks 2,630 1,148 21 880 4,679

Total 3,069 1,287 46 1,076 5,478

Notes

Figures in this table show permanent force employee numbers (substantive headcount). Reserves undertaking continuous full-time service are not included. Classifications are not mutually exclusive, and an individual is placed in only one group. The order of classifications is as follows: cadets and trainees, then age retirement; the remainder are classified as voluntary or involuntary. Employees commencing leave or leave without pay are not included.

1. ‘Voluntary’ includes voluntary redundancies and resignations.

2. ‘Involuntary’ primarily comprises members who are medically unfit, are unsuitable for further duty, died while serving or fell into the ‘Management initiated early retirement’ category.

3. Some 2012-13 figures have been adjusted from what was reported in the Defence Annual Report 2012-13 to account for retrospective transactions.

130 DEFENCE ANNUAL REPORT 2013-14

A number of internal and external factors have contributed to ADF separation rates. One factor that has clearly affected the Army and hence the ADF is the earlier recruiting surge: many of the soldiers recruited at that time are now separating because they have reached the end of their initial minimum period of service, at which time there is a higher propensity to leave.

To address the increase in separations, Defence has developed the Defence Employment Offer framework to ensure that there is a compelling offer to join and stay with the organisation. Differentiated offers can be made to promote retention in those parts of the workforce that are under pressure.

The Navy has addressed training pipeline issues that previously hindered workforce growth. Recruiting targets are being increased for the Navy and the Army, which will aid growth towards a permanent workforce strength of around 58,500.

ADF Reserves

Table 8.6 shows the number of Reservists who rendered paid service during 2013-14. The number of days each Reservist works in a year can vary substantially depending on personal circumstances and organisational need.

In 2013-14, 19,741 Reservists undertook paid service, which was 967 less than the 2012-13 figure of 20,708. While this appears to suggest lower participation in Reserve service, it is significant that the number of Reserve members who served 20 or more days in the year increased by almost 3,000 from the previous financial year, and the total days served increased by over 25 per cent.

Project Suakin The ability to attract and retain the right people, in the right numbers, is fundamental to the sustainment of ADF capability. Project Suakin is a whole-of-Defence workforce model designed to contribute to ADF capability by providing the flexibility to manage the workforce using full-time, part-time and casual service arrangements.

The flexibility afforded by the new model will contribute to a reduction in the barriers limiting members’ ability to achieve a long-term military career, and support increased diversity across the military workforce. Simpler transfer arrangements between categories of service—for example, from full-time to part-time and vice versa—and at various stages of a member’s life will result in greater retention of skills and knowledge and a reduction in turnover in critical trades.

During 2013-14, milestones set to track the development of the foundation elements of the new model were largely achieved. The project has supported the alignment of certain allowances and conditions of service for Reservists, and the detailed design of the new workforce model is nearing completion.

Phase 2 of the project commenced on 1 July 2014. Its primary focus is to put in place the mechanisms needed to deploy the model. The outputs of Project Suakin will enhance Defence’s ability to deliver military capability while at the same time enabling staff to achieve a number of strategic personnel objectives.

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FEATURE |

Pre-recruitment course offers new opportunities to Indigenous Australians In April 2014, the Australian Defence Force held its Indigenous Pre-Recruitment Course (IPRC) in South Australia for the first time, offering unique personal and professional development opportunities to young Indigenous Australians.

The six-week course focuses on the delivery of five core training modules: cultural appreciation; language, literacy and numeracy; military skills; physical fitness; and vocational training.

Warrant Officer Class One Colin Watego, a Bundjalung and Torres Strait Island man who has served in the Australian military for 39 years, is the Regimental Sergeant Major of the IPRC. He says it offers high quality training to young Indigenous Australians from a range of cultural backgrounds.

‘The Indigenous Pre-Recruitment Course offers unique opportunities for personal and professional development that participants take back to their local communities’, Warrant Officer Class One Watego said.

‘The Australian Defence Force values and supports young Indigenous people and recognises that Indigenous Australians have a unique contribution to make. I am proud to be part of the leadership team running the course.’

For the first time the IPRC is being held in South Australia, supported by 9th Brigade, Australian Army.

The 9th Brigade has a proud history and continues to contribute to the Australian Army and the wider community as a highly responsive reserve brigade. It has responded to domestic emergencies including the Black Saturday bushfires in Victoria and 40 per cent of 9th Brigade soldiers have deployed on operations overseas.

The Commander of 9th Brigade, Brigadier Peter Connor, said some IPRC participants come from areas where 9th Brigade has many regional depots.

‘We value cultural diversity in our workforce at 9th Brigade and we recognise the unique contribution that Indigenous Australians make to the Australian Defence Force’, he said.

‘We encourage Indigenous people to apply to join 9th Brigade or the wider Australian Defence Force when they graduate from the course.’

The IPRC is conducted four times each year, and offers places for up to 100 participants from across Australia who are looking for careers in the Australian Defence Force, or the Defence Australian Public Service.

The Indigenous Pre-Recruitment Course members

Able Seaman Isaac Ingui watching members of the Indigenous Pre-Recruitment Course

132 DEFENCE ANNUAL REPORT 2013-14

Table 8.6: ADF reserve paid strength (including DMO), 2013-14

2012-13

actual

2013-14 budget estimate[1]

2013-14 revised estimate[2] 2013-14

actual Variation %

Navy 2,229 2,150 2,150 2,021 -129 -6.0

Army 15,464 15,200 15,200 14,662 -538 -3.5

Air Force 3,015 3,100 3,100 3,058 -42 -1.4

Total paid Reserves 20,708 20,450 20,450 19,741 -709 -3.5

Notes

Because the number of days or hours worked by Reserve members can vary greatly, figures in this table are headcount rather than average strength. Reservists on full-time service in the permanent force are not included in this table; they are included in Table 8.3. Figures include the High Readiness Reserve Force, Active Reserve Force and Specialist Reserve Force.

1. As published in the Portfolio Budget Statements 2013-14.

2. As published in the Portfolio Additional Estimates Statements 2013-14.

APS workforce

Table 8.7 shows details of the APS average strength, expressed as average full-time equivalent (FTE), in 2013-14. APS average strength was 20,496 in 2013-14. This was a decrease of 1,038 from the 2012-13 figure of 21,534. The decrease in 2013-14 was 1,018 FTE, from 21,006 to 19,988 (Table 8.8). The decrease was due to continuing reforms to Defence’s business practices, including through the further progress of shared services reform.

Table 8.7: Civilian (APS and contractor) average FTE, 2013-14

2012-13

actual

2013-14 budget estimate[1]

2013-14 revised estimate[2] 2013-14

actual Variation %

APS—Defence 15,786 15,547 15,268 15,280 12 0.1

APS—DMO 5,389 5,307 4,878 4,812 -66 -1.4

APS—DMO - ADF backfill [3] 359 363 428 404 -24 -5.6

Total APS 21,534 21,217 20,574 20,496 -78 -0.4

Defence contractors 358 445 346 340 -6 -1.7

DMO contractors 33 48 28 18 -10 -35.7

Total contractors 391 493 374 358 -16 -4.3

Total civilian workforce 21,925 21,710 20,948 20,854 -94 -0.4

Notes

These figures are average FTE; they are not a headcount.

1. As published in the Portfolio Budget Statements 2013-14.

2. As published in the Portfolio Additional Estimates Statements 2013-14.

3. The DMO manages its workforce under a combined ADF, APS and contractor model. Under that arrangement, it can use funding from unfilled ADF positions to fill and resource positions with APS staff.

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Table 8.8: APS end-of-year FTE, 2013-14

2012-13

actual

2013-14 budget estimate[1]

2013-14 revised estimate[2] 2013-14

actual Variation %

APS 21,006 - 20,300 19,988 -312 -1.5

Notes

Figures in this table are actual FTE for the last payday of 2013-14. Employees on forms of leave without pay are not included. The figures differ from those in Table 8.7, as that table shows the average FTE over the whole year.

1. The Portfolio Budget Statements 2013-14 did not include an estimate for end-of-year FTE.

2. As published in the Portfolio Additional Estimates Statements 2013-14.

APS recruitment and separations

Defence recruited 473 APS employees during 2013-14, including 173 as part of the graduate program.

The APS (headcount) decreased by 911; this reflects the net difference between recruitment and separations. The separations are shown in Table 8.9 and the majority of separations were due to resignation/retirement from Defence.

Table 8.9: APS separations 2012-13 and 2013-14

Voluntary redundancy[1]

Involuntary separations[2] Resignation/ retirement[3]

Transfers[4] Total

2012-13

Senior Executive Service 2 2 8 5 17

Senior officers 255 10 260 72 597

Other staff 453 74 987 131 1,645

Total APS (2012-13) 710 86 1,255 208 2,259

2013-14

Senior Executive Service 3 7 6 16

Senior officers 66 17 251 47 381

Other staff 89 77 725 96 987

Total APS (2013-14) 158 94 983 149 1,384

Notes

Figures in this table show ongoing and non-ongoing employee numbers (substantive headcount).

1. Voluntary redundancies are managed at a Group level.

2. Involuntary figures include breach of conduct, invalidity retirement, involuntary redundancy, lack of qualifications, non-performance, term probation and death.

3. Resignation/retirement figures include resignation, retirement (minimum age and Senior Executive Service) and completion of non-ongoing.

4. Transfers are those who have transferred to other government departments. Movements between Defence and the DMO are not included.

134 DEFENCE ANNUAL REPORT 2013-14

Remunerating people Defence remuneration is a key component of the Defence employment offer, which realises the People in Defence vision. It provides a key incentive for people to join Defence, develop personally and professionally, and choose to remain in Defence. The employment offer provides for fair and competitive remuneration, consistent with the parameters laid down by Government.

Just as there are diverse ADF and APS remuneration requirements, there are separate ADF and APS remuneration structures, which are explained in this section.

ADF remuneration

The independent Defence Force Remuneration Tribunal established under section 58H of the Defence Act 1903 is responsible for setting pay and pay-related allowances for ADF members.

The ADF Workplace Remuneration Arrangement 2011-2014 is a key component of the ADF remuneration framework and is consistent with the Government’s broader workplace relations policies. The arrangement is part of the ADF remuneration initiative aimed at attracting and retaining military personnel and forms a significant part of the Defence employment offer.

The Workplace Remuneration Arrangement increases salary and salary-related allowances in return for improvements in organisational efficiency and productivity. Other conditions of service are determined by the Minister for Defence under section 58B of the Defence Act. The current arrangement expires on 3 November 2014.

Table 8.10: Permanent ADF salary ranges as at 30 June 2014

Rank

Salary range

Minimum Maximum

Officer of the permanent force (equivalent)

General (E)[1] $535,000 $764,420

Lieutenant General (E)[1] $350,000 $537,600

Major General (E)[2] $217,636 $265,408

Brigadier (E)[2,3] $148,183 $242,705

Colonel (E)[2,3,4] $135,000 $231,707

Lieutenant Colonel (E)[2,3,4] $123,771 $220,486

Major (E)[2,4] $81,329 $198,620

Captain (E)[2,4] $63,699 $188,521

Lieutenant (E)[5] $52,952 $110,996

2nd Lieutenant (E)[5] $49,473 $103,619

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Rank

Salary range

Minimum Maximum

Other rank of the permanent force (equivalent)

Warrant Officer Class 1 (E) $72,131 $111,018

Warrant Officer Class 2 (E) $66,436 $102,868

Staff Sergeant (E) $64,208 $99,237

Sergeant (E) $57,409 $94,906

Corporal (E) $49,609 $86,784

Lance Corporal (E) $45,633 $80,663

Private Proficient (E) $44,690 $79,720

Private (E) $43,766 $78,799

Notes

1. General (E) and some Lieutenant General (E) rates are set by the Remuneration Tribunal.

2. Includes rates for Medical Officers.

3. Includes rates for Chaplains.

4. Excludes Medical Procedural Specialist.

5. Includes transitional rates for other rank appointed as officer.

Table 8.11: ADF workplace arrangements

Australian Defence Force[1] Star rank Non-star rank

Members covered by the Workplace Remuneration Arrangement 0 56,918

Members covered by the Senior Officer Remuneration Arrangement 168 0

Statutory office holders [2] 6 1

Non-statutory office holders 3 0

Notes

1. Numbers in this table reflect permanent force members only. However, members of the Reserve force are also covered by the relevant arrangement.

2. Statutory office holders in Defence are remunerated under determinations made by the Remuneration Tribunal, which is administered by the Department of the Prime Minister and Cabinet.

Table 8.10 (continued)

136 DEFENCE ANNUAL REPORT 2013-14

APS remuneration

The Defence Enterprise Collective Agreement sets out most of the terms and conditions of employment—including remuneration, performance management and working arrangements—for Defence’s non-SES APS employees. The legal framework that underpins the agreement includes the Fair Work Act 2009 and the Public Service Act 1999. The agreement is developed through extensive consultation with Defence employees and their representatives and is negotiated and governed consistent with that legislation and broader government policy.

The agreement underpins Defence’s capacity to attract and retain employees with the right skills and experience to meet capability needs. It is a principles-based agreement that supports the deregulation of Defence’s employment policies and broader Defence reform agendas. It provides managers and supervisors with the flexibility to make and implement decisions in their workplaces that meet the needs of both Defence and its employees.

Through the agreement, Defence can provide its APS employees with an attractive employment offer and, in return, employees and supervisors have a range of responsibilities (including mutual responsibilities) that must be fulfilled as part of their employment. Salary rates for SES employees are set by a determination under section 24(1) of the Public Service Act.

Table 8.12 reflects Defence APS salary arrangements as at 30 June 2014. The majority of Defence employees receive salaries within the standard salary range; however, some employees with specialist skills receive higher salaries that reflect individual arrangements or recognised technical skill sets. These are covered under the Defence Enterprise Collective Agreement.

Remuneration arrangements need to be flexible enough to allow Defence to develop, attract and retain employees with the necessary skills and knowledge. The Secretary and any employee covered by the Defence Enterprise Collective Agreement may agree to make an individual flexibility arrangement to vary the effect of some specified terms of the agreement.

Defence remuneration provides a key incentive for people to join Defence, develop personally and professionally, and choose to remain in Defence.

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Table 8.12: APS salary ranges at 30 June 2014

Broadband salary range ($)

Classification Minimum Maximum

Individual

arrangements[1]

SES pay arrangements

SES Band 3 $228,846 $272,659 $466,458[2]

SES Band 2 $184,037 $222,173 $258,496[3]

SES Band 1 $151,665 $177,964 $195,760

Collective agreement[4]

Executive Level 2 $111,559 $133,905 $179,276[5]

Executive Level 1 $96,084 $108,382 $133,905[6]

APS Level 6 $76,023 $86,844 $89,463[7]

APS Level 5 $69,395 $74,331 $74,904[8]

APS Level 4 $63,236 $69,038 $69,038

APS Level 3 $55,825 $61,512 $61,512

APS Level 2 $49,009 $55,096 $55,663[9]

APS Level 1 $43,306 $48,613 $48,613

Notes

1. Maximum salary paid under an individual remuneration arrangement shown.

2. Includes rates for Chief of Division 3.

3. Includes rates for Chief of Division 2 and Medical Officer Class 6.

4. Salary ranges provided under the Defence Enterprise Collective Agreement.

5. Includes rates for EL2.1, EL2.2, Legal and Science specialist structures and Medical Officer Class 3 and 4.

6. Includes rates for Public Affairs and Legal specialist structures and Medical Officer Class 1-2.

7. Includes rates for Public Affairs Grade 2 retained pay point.

8. Includes rates for Senior Technical Officer Grade 1 retained pay point.

9. Includes rates for Technical Assistant Grade 2 retained pay point.

Senior Leadership Group remuneration In accordance with government policy, SES employees in Defence have their conditions of employment—including levels of remuneration, set by a ‘collective’ determination made under section 24(1) of the Public Service Act— overlaid by individual common law agreements. Because Defence operates in a values-based employment framework, mutual responsibilities for SES employees in areas such as accountability, performance and productivity are also outlined in these instruments.

The Secretary may decide to increase the salary rates for each SES classification level, taking into account any of the following matters:

• a review of the salary rates relevant to the employee’s classification, conducted in July each year

• movements in APS SES salary levels generally

• other relevant factors, including Australian Government employment policy and non-SES and ADF remuneration outcomes following a review at any time.

138 DEFENCE ANNUAL REPORT 2013-14

The ADF Senior Officer Remuneration Arrangement 2011-2014 is the military counterpart of the SES employment arrangement. It applies to all generalist ADF senior officers holding the rank of Brigadier (equivalent) and Major General (equivalent). All other senior officers (excluding statutory office holders) may be remunerated by way of a determination from the Defence Force Remuneration Tribunal under section 58H of the Defence Act. Other non-salary-related conditions of service are determined by the Minister of Defence under section 58B of the Defence Act.

Statutory office holders, including the Chief of the Defence Force and the Secretary, are remunerated by way of a determination from the Remuneration Tribunal under the Remuneration Tribunal Act 1973.

Performance pay Performance-related pay is available to non-SES employees under the current Defence Enterprise Collective Agreement. Subject to performance, employees may be eligible to progress to a higher pay point within the salary band for their classification or, for those at the top of the range, be paid a 1 per cent lump-sum payment. The salary advancement is not considered performance pay; however, the lump-sum payment to employees at the top of the pay band is considered to be a form of performance pay.

An SES employee may be paid non-superannuable bonuses. A performance bonus may be paid as an incentive and reward for exceptional performance during the performance cycle. Payment of a performance bonus is dependent on the Secretary’s assessment of the SES employee’s performance. A retention bonus may be paid as an incentive to remain in an identified role.

Performance-based pay is not a feature of any existing ADF remuneration framework. Career development opportunities, including promotion, are the key recognitions of performance.

Productivity gains

The Australian Government requires improved remuneration and conditions for APS employees to be underpinned by improved productivity and performance. In accordance with the Australian Government Public Sector Workplace Bargaining Policy, Commonwealth agencies are required to ensure that they are able to demonstrate that proposed improvements to the terms and conditions of employment for agency employees are underpinned by quantifiable productivity initiatives.

Managing and developing APS staff During 2013-14, the two key initiatives used to manage and develop Defence APS employees continued to be the APS Core Capability Framework and the Job Families Project.

The APS Core Capability Framework for Defence includes the core skills, knowledge and behaviours that are expected of all Defence APS employees to ensure the delivery of government priorities and high-quality services, now and in the future. As it is integrated into all human resources functions, the framework guides recruitment and selection, learning and development, performance management, and career development. The APS Core Capability Framework is designed to:

• aid greater APS workforce productivity through a system that provides a more structured, coherent and consistent development of leadership, management and administrative skills for the Defence APS workforce

• help employees to realise their own potential through a better understanding of what is required of them

• help develop employees as leaders

• assist supervisors in having a conversation with their employees about the capabilities required for the job.

In 2013-14, refinements were made to the content and structure of the core leadership and management programs at key career transition points and, where necessary, the programs were integrated with products developed by the Australian Public Service Commission as part of the APS Leadership and Core Skills Strategy.

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The Job Families Project In 2011, the Defence Committee tasked a project office to develop content for the Defence APS Standard Classification of Occupation (DAPSSCO) codes. The office was established in May 2012. During 2013-14, it achieved the project requirements by developing a DAPSSCO profile for each of the 2,100 codes. Each DAPSSCO profile contains an approved APS classification, an occupation description, a duty statement, selection criteria based on the Australian Public Service Commission’s Integrated Leadership System, and Essential, Highly Desirable and Desirable learning and career development requirements based on the 70/20/10 learning principle.

In developing the content of each DAPSSCO profile, the Job Families Project conducted several hundred workshops, engaging more than 1,000 EL1 and EL2 APS subject matter experts across Defence. After further consultation, the profiles were approved by the relevant Job Family Sponsor and Deputy Secretary of the Defence People Group.

The DAPSSCO profiles are available for display, wider consultation and use via the Job Families intranet page and through Employee Self-Service in PMKeyS. The Job Families intranet page contains additional information on the project, using the profiles and the Job Family Business Rules.

The work of the Job Families Project has now become business as usual and has been embedded into the Workforce Supply team.

Complaint handling and resolution Defence employees have the right to complain if they are aggrieved by matters related to their employment. ADF members (permanent and reserve) may apply for redress of grievance under the provisions of Part XV of the Defence Force Regulations 1952. APS members may seek a review of actions under the Public Service Act 1999.

On average, between 300 and 350 formal requests for redress are lodged by ADF members annually, or about three complaints per thousand members. Similarly, APS employees lodge an average of 80 formal requests for review of an action affecting them, or about five complaints per thousand employees.

Military redress of grievance

Three hundred and ninety-five new applications for redress of grievance were received in 2013-14, an increase on the previous year (Figure 8.1). Four hundred and six applications received during the current and previous reporting periods were finalised at unit level. Of those, 304 (75 per cent) were not granted, withdrawn or not reviewable; the remainder were granted or partly granted. The primary focus of complaints remains as termination of service decisions, career management issues, and conditions of service entitlements.

A significant proportion of members who are dissatisfied with the redress decision of their commanding officer refer their complaint to their Service chief or to the CDF for further review. On average, one-third of redress of grievance applicants exercise this entitlement.

When a redress of grievance is referred to the CDF or a Service chief, priority is allocated based on the nature of the complaint. Referrals contesting termination of service decisions continue to account for a significant proportion (31 per cent) of referred complaints. These cases are given the highest priority—often at the expense of other complaints.

140 DEFENCE ANNUAL REPORT 2013-14

Figure 8.1: Military redresses of grievance received and finalised, 2009-10 to 2013-14

349 322 323 395

450

0

50

100

150

200

250

300

350

400

Received Finalised

345 344 331 319

406

296

2009-10 2010-11 2011-12 2012-13 2013-14

APS review of actions

In 2013-13, the number of applications for reviews of actions received across Defence increased by 15 per cent from the previous year (Figure 8.2). This increase is attributed to an increased awareness by employees that they are able to have their disputed performance assessments reviewed under review of actions provisions.

The most common subjects of applications for reviews were:

• performance feedback or assessment and salary or performance progression

• the handling and outcomes of unacceptable behaviour complaints by line management

• access to leave or other conditions of employment.

Figure 8.2: APS review of actions applications received and finalised, 2009-10 to 2013-14

66

77

98

113

140

0

20

40

60

80

100

120

Received Finalised

65 62 68

90

119

59

2009-10 2010-11 2011-12 2012-13 2013-14

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Unacceptable behaviour Defence personnel can make a complaint about any incident of unacceptable behaviour they have experienced or witnessed in the workplace. Defence policy requires that any such complaint be reported and recorded on the Defence Complaints Management, Tracking and Reporting System (ComTrack). Guidance and support are available to ensure that complaints are managed and resolved appropriately.

All Defence personnel are required to undertake annual workplace behaviour training, which includes information about expectations of behaviour and guidance on dealing with complaints of unacceptable behaviour. Given the nature of service in the ADF, for most ADF members this policy applies to their behaviour 24 hours a day, seven days a week.

In 2013-14, 827 complaints of unacceptable behaviour were recorded in ComTrack (Figure 8.3). This was an increase in reporting from previous years and was due in part to continued improvements to ComTrack and the continuing encouragement of personnel to report any incident of unacceptable behaviour.

During the year, Defence maintained a focus on encouraging commanders and managers to finalise old cases where the incident had already been dealt with but the case had not been formally finalised in ComTrack.

Complaints of this type fall into six main categories:

• abuse of power

• discrimination

• harassment

• sexual harassment

• workplace bullying

• inappropriate workplace relationships and conflict of interest.

Complaints alleging sexual misconduct (including sexual harassment) are also discussed in the section of this report that deals with the Sexual Misconduct Prevention and Response Office (SeMPRO).

On average, between 10 per cent and 15 per cent of unacceptable behaviour incidents are serious enough to result in a formal disciplinary or administrative outcome. Most complaints continue to be resolved informally. Fewer than 1 per cent of the Defence workforce makes complaints of this type.

Figure 8.3: Unacceptable behaviour complaints reported as received and finalised, 2009-10 to 2013-14

669 658 753 827

140

0

20

40

60

80

100

120

Received Finalised

655 686 610

925 860

569

2009-10 2010-11 2011-12 2012-13 2013-14

142 DEFENCE ANNUAL REPORT 2013-14

Work health and safety performance Defence is committed to providing a safe, healthy and positive working experience for all workers to enable them to contribute to delivering the organisation’s capability requirements.

The Defence Work Health and Safety (WHS) Strategy 2012-2017 was developed to drive continuous improvement of WHS systems across the whole of Defence. It was released on 1 January 2012 to coincide with the implementation of the Work Health and Safety Act 2011.

Defence continues to implement a comprehensive program of work in accordance with the requirements of the Work Health and Safety Act and Regulations, the Defence WHS Strategy, the corporate Safety Management System and the principles of continuous improvement.

The Defence WHS Management System is based on the premise that the business owner of any platform, fleet, process, system, place or workforce is responsible for identifying hazards and controlling risks associated with it. Responsibilities overlap, and business owners are required to communicate, consult and coordinate to ensure that all hazards are identified and risks controlled. Business owners are located in all Groups and Services.

This section of the annual report is focused on initiatives that support the communication, consultation and coordination requirements. Key activities during 2013-14 included work on the organisation’s WHS information system, hazardous substances and policy development.

SENTINEL

Defence worked towards implementing SENTINEL, a whole-of-Defence WHS management information system, to improve the availability, timeliness and quality of WHS information. SENTINEL is scheduled for implementation in the second half of 2014. It supports a key objective from the Defence WHS Strategic Plan.

SENTINEL will provide decision makers at all levels with access to quality WHS information to empower them to eliminate or manage hazards across the Defence lifecycle and upon the disposal of assets.

To support the successful implementation of the system, four training packages were developed and will be released for completion before the system is implemented.

Hazardous chemicals enforceable undertaking

The enforceable undertaking placed on Defence by Comcare for the management of hazardous chemicals was lifted in November 2013. This was the culmination of three years of work by Defence to implement a consistent, comprehensive and inclusive system for the management of hazardous chemicals.

Defence is committed to continued improvement in hazardous chemicals management through an enduring hazard reduction program.

Policy development

A key activity for Defence is the continuing review and updating of policies to be compliant with the Work Health and Safety Act and Regulations. In 2013-14, a significant number of policies were reviewed for release in 2014-15.

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FEATURE |

Improving the quality of mental health care in the ADF: the Australian Defence Force Centre for Mental Health The work of the ADF Centre for Mental Health and its staff continue to go from strength to strength, ensuring that ADF personnel with mental health issues are provided with the very best care and support on their road to recovery.

Over the past year, the centre has entered into a partnership with the Australian Centre for Posttraumatic Mental Health at the University of Melbourne to develop and provide training on mental health assessment and case formulation to around 75 ADF mental health professionals. A further 30 received training in cognitive processing therapy to enhance the treatment of post-traumatic stress disorder. Other programs include Recognising the Early Signs of Emerging Trauma, Acute Mental Health on Operations and, in partnership with the Australian Centre for Posttraumatic Mental Health, a clinical trial in anger and aggression management for post-traumatic stress disorder.

Staff conduct a formal second-opinion clinic to assist Defence medical officers and consultant psychiatrists in the management of ADF members who are experiencing difficult, complex or treatment-resistant mental disorders. This clinic has provided clinical consultancies on 48 cases to date and has proven to be enormously effective. Additionally, the ADF Centre for Mental Health provides clinical supervision to mental health professionals across Defence and regularly provides advice to both the Command and Joint Health Command on the review and management of complex mental health presentations.

In 2014, the centre hosted a joint meeting of the Department of Veterans’ Affairs Mental Health Clinical Reference Group and the ADF Mental Health Advisory Group, and a workshop of mental

health and research representatives from the United States, the United Kingdom, Canada and New Zealand militaries.

Collaborations such as these are invaluable. They present opportunities to explore and expand the knowledge and understanding of mental health issues shared by centre staff and their colleagues here and abroad.

In November 2013, the centre moved into newly refurbished and purpose-built facilities on board HMAS Penguin in Sydney. The facilities are equipped with state-of-the-art consulting, counselling, observation, video conferencing, training, meeting and conference rooms.

Established in 2010, as part of the Defence mental health reform program arising from the Dunt Review, the centre was designed to improve the quality of mental health care in the ADF. It provides mental health consultancy services, trains and upskills the ADF mental health workforce, and provides expert advice to ADF commanders and members.

The team at the centre consists of a range of mental health professionals—including two Army psychologists, a consultant psychiatrist, a clinical psychologist and a program development manager—reporting directly to the Director General of the Mental Health, Psychology and Rehabilitation Branch within Joint Health Command.

Three members of the team: psychologist SO3 Captain Alison Beeley; psychologist and Officer-in-Charge SO1 Mental Health, Education and Training Lieutenant Colonel Jacquie Costello; and consultant psychiatrist Dr Duncan Wallace

144 DEFENCE ANNUAL REPORT 2013-14

Comcare interventions and investigations

The Work Health and Safety Act’s requirement for a proactive approach to safety has changed the methodology used by Comcare. Comcare now undertakes interventions or inspections based on known high risk. The new legislation has not negated the use of improvement and prohibition notices. To assist Comcare to develop a workable arrangement for its new approach, Defence and Comcare have agreed on a protocol for the management of interventions. The number of proactive interventions is determined by the regulator’s strategic focus and available resources.

During 2013-14, the number of Comcare interventions (230) increased only slightly from the 2012-13 figure (228), (311 in 2011-12).

Other work health and safety achievements

The commitment by Defence and its leaders to improving the organisation’s safety culture is achieving results. This effort is overseen by Defence’s WHS Committee. Continued focus on safety in the design and planning phases of all Defence activities will maintain the positive cultural trend.

The number of Comcare notifiable incidents continued to decline in 2013-14 (Figure 8.4), while the number of Comcare notices remained steady (Figure 8.5).

Figure 8.4: Work health and safety—statistics and notifiable incidents, 2010-11 to 2013-14

25,000

5,000

10,000

15,000

20,000

2010-11 2011-12 2012-13 2013-14

16

23

1,237

1,587

1,611

1,722

2,864

3,332

559

745

1,312

15

982

1,493

2,490

8

20,010

19,301

20,068

16,802

Total incident reports[1] Comcare—notifiable deaths[2] Comcare—serious injury or illness Comcare—dangerous incident Total Comcare notifiable

Notes

Defence completes a data quality process each year. For example, the process removes duplicated reports and ensures that reports are recorded in the correct financial year.

1. Incidents are recorded based on the date of the incident. Delays in the reporting of incidents affect these statistics.

2. Comcare notifiable deaths are all deaths, excluding those that were known to be combat related.

When I report an accident, injury, incident or hazard, I believe that appropriate action

will be taken

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DEFENCE ANNUAL REPORT 2013-14 145

Figure 8.5: Work health and safety—Comcare notices, 2010-11 to 2013-14

2

1

0

2

1

0 0

1

0 0 0

3

1

0 0 0

8

0

2

4

6

2010-11 2011-12 2012-13 2013-14

5

6

1 1

Improvement notices[1] Prohibition notices[2] Do not disturb notices[3] Enforceable undertakings[4] Written requests[5]

Notes The only notice issued in 2013-14 was a variation to an improvement notice to operate special plant that was originally issued in 2012.

1. Improvement notices—based on incidents and occurrences that contravene the WHS legislation.

2. Prohibition notices—issued to remove an immediate threat to the health or safety of workers.

3. Do not disturb notices—issued for a specific period of time to remove a threat to the health or safety of personnel.

4. Enforceable undertaking—Comcare may accept a written undertaking to fulfil an obligation under the WHS Act.

5. Written request—issued where the employer is to provide particulars of action proposed to be taken as a result of a Comcare report and/or any improvement or prohibition notice.

Health and safety is treated as an important issue in my workplace

146 DEFENCE ANNUAL REPORT 2013-14

Headcount staffing figures This section provides workforce information as at 30 June 2014 and outlines changes in the workforce that occurred during 2013-14. It includes numbers of people, employment categories, locations and gender information; the information is based on headcount.

At 30 June 2014, Defence had 78,137 permanent employees, comprising 57,036 permanent ADF members and 21,101 ongoing APS employees. An additional 93 APS employees were employed on a non-ongoing basis.

During 2013-14, the permanent ADF strength increased by 877 to 57,036. The growth in the permanent workforce is expected to continue over the next few years until the ADF reaches its Average Funded Strength guidance. The Reserve strength decreased by 1,367 to 24,028 (including those members on continuous full-time service and Active Reserve). The total ADF workforce was 81,064, and included 18,870 Navy permanent and Reserve members, 43,591 Army permanent and Reserve members and 18,603 Air Force permanent and Reserve members. At 30 June 2014, 1,474 Reservists were also Defence APS employees.

At 30 June 2014, there were 5,305 APS employees in DMO and 15,889 in the remainder of Defence. This number includes all APS employees recorded as paid, unpaid, full-time, part-time, ongoing and non-ongoing.

In addition to tables 8.13-18, further information and statistics on the Defence workforce are available online.

AND

59.4% 12,583

30 JUNE 2014

85% 48,468 15% 8,568

40.6% 8,611

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Table 8.13: Defence workforce headcount, 30 June 2013 and 30 June 2014

Navy Army Air Force ADF APS[1]

30 June 2013[2]

Permanent ADF[3] 13,513 28,579 14,067 56,159 -

Department of Defence - - - - 16,540

DMO - - - - 5,565

Total at 30 June 2013 13,513 28,579 14,067 56,159 22,105

30 June 2014

Separations[3]

Permanent ADF 1,145 3,553 780 5,478 -

Department of Defence - - - - 1,065

DMO - - - - 319

Subtotal 1,145 3,553 780 5,478 1,384

Net transfers[4]

Defence - - - - 37

DMO - - - - -37

Subtotal - - - - -

Additions

Permanent ADF[3] 1,393 4,019 943 6,355 -

Department of Defence - - - - 377

DMO - - - - 96

Subtotal 1,393 4,019 943 6,355 473

Employee numbers

Permanent ADF[3] 13,761 29,045 14,230 57,036 -

Department of Defence - - - - 15,889

DMO - - - - 5,305

Total at 30 June 2014 13,761 29,045 14,230 57,036 21,194

Change 248 466 163 877 -911

Notes

Figures in this table show employee numbers (substantive headcount).

1. Includes paid and unpaid employees, which covers full-time, part-time, ongoing and non-ongoing employees.

2. Some 30 June 2013 str ength figures have been adjusted from those reported in the Defence Annual Report 2012-13 to account for retrospective transactions.

3. Does not include Reservists or those undertaking continuous full-time service.

4. Net transfers represent the net effect of transfer of APS employees between Department of Defence and the DMO. Some of these transfers are the result of movements under the shared services program.

148 DEFENCE ANNUAL REPORT 2013-14

Table 8.14: ADF permanent and Reserve forces and APS, by gender and employment category, 30 June 2013 and 30 June 2014

30 June 2013[1] 30 June 2014

Men % Women % Men % Women %

Navy permanent

Trained force

Officers 1,997 14.8 473 3.5 2,027 14.7 495 3.6

Other ranks 6,817 50.4 1,521 11.3 6,963 50.6 1,548 11.2

Training force

Officers 590 4.4 168 1.2 614 4.5 155 1.1

Other ranks 1,622 12.0 325 2.4 1,596 11.6 363 2.6

Total Navy 11,026 81.6 2,487 18.4 11,200 81.4 2,561 18.6

Army permanent

Trained force

Officers 4,533 15.9 761 2.7 4,536 15.6 799 2.8

Other ranks 17,952 62.8 1,934 6.8 17,399 59.9 2,008 6.9

Training force

Officers 771 2.7 187 0.7 815 2.8 200 0.7

Other ranks 2,189 7.7 252 0.9 2,873 9.9 415 1.4

Total Army 25,445 89.0 3,134 11.0 25,623 88.2 3,422 11.8

Air Force permanent

Trained force

Officers 3,273 23.3 780 5.5 3,353 23.6 845 5.9

Other ranks 7,410 52.7 1,422 10.1 7,295 51.3 1,439 10.1

Training force

Officers 510 3.6 152 1.1 529 3.7 158 1.1

Other ranks 412 2.9 108 0.8 468 3.3 143 1.0

Total Air Force 11,605 82.5 2,462 17.5 11,645 81.8 2,585 18.2

ADF permanent

Trained force

Officers 9,803 17.5 2,014 3.6 9,916 17.4 2,139 3.8

Other ranks 32,179 57.3 4,877 8.7 31,657 55.5 4,995 8.8

Training force

Officers 1,871 3.3 507 0.9 1,958 3.4 513 0.9

Other ranks 4,223 7.5 685 1.2 4,937 8.7 921 1.6

Total ADF permanent 48,076 85.6 8,083 14.4 48,468 85.0 8,568 15.0

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30 June 2013[1] 30 June 2014

Men % Women % Men % Women %

Reserves[2]

Navy 4,054 16.0 1,051 4.1 4,058 16.9 1,051 4.4

Army 14,005 55.1 2,154 8.5 12,617 52.5 1,929 8.0

Air Force 3,263 12.8 868 3.4 3,483 14.5 890 3.7

Total Reserves 21,322 84.0 4,073 16.0 20,158 83.9 3,870 16.1

APS[3]

APS (Dept. of Defence) 9,343 42.3 7,197 32.6 9,010 42.5 6,879 32.5

APS (DMO) 3,766 17.0 1,799 8.1 3,573 16.9 1,732 8.2

Total APS 13,109 59.3 8,996 40.7 12,583 59.4 8,611 40.6

Notes

Figures in this table show employee numbers (substantive headcount). Percentage figures are calculated against the respective totals. Percentages may not sum due to rounding.

1. Some 30 June 2013 figures have been adjusted from those reported in the Defence Annual Report 2012-13 to account for retrospective transactions.

2. Reserves include all active members (training, deployed and performing other part-time military work commitments) and those on continuous full-time service.

3. Figures include paid, unpaid, full-time, part-time, ongoing and non-ongoing employees. The 30 June 2014 figures for APS include 1,474 APS employees who are also counted as Reserve members.

Table 8.15: APS personnel, by gender and category, 30 June 2013 and 30 June 2014

30 June 2013[1] 30 June 2014

Full-time Part-time[2] Total Full-time Part-time[2] Total

Ongoing employees

Men 12,846 180 13,026 12,309 217 12,526

Women 7,876 1,035 8,911 7,452 1,123 8,575

Total ongoing 20,722 1,215 21,937 19,761 1,340 21,101

Non-ongoing employees

Men 81 2 83 48 9 57

Women 73 12 85 34 2 36

Total non-ongoing 154 14 168 82 11 93

Men 12,927 182 13,109 12,357 226 12,583

Women 7,949 1,047 8,996 7,486 1,125 8,611

Total 20,876 1,229 22,105 19,843 1,351 21,194

Notes

Figures in this table show employee numbers (substantive headcount). Figures include paid and unpaid employees.

1. Some 30 June 2013 figures have been adjusted from those reported in the Defence Annual Report 2012-13 to account for retrospective transactions.

2. Part-time employees are those with weekly hours less than the standard hours, not those in part-time positions.

Table 8.14 (continued)

150 DEFENCE ANNUAL REPORT 2013-14

Table 8.16: Defence workforce, by employment location, 30 June 2014

NSW Vic.[1] Qld SA WA Tas. NT ACT[2] O/S[3] Total

Permanent forces[4]

Navy 6,495 1,544 927 84 2,209 19 668 1,533 282 13,761

Army 5,919 3,342 11,236 1,434 849 68 3,280 2,639 278 29,045

Air Force 4,753 986 3,013 1,941 367 7 979 1,927 257 14,230

Subtotal 17,167 5,872 15,176 3,459 3,425 94 4,927 6,099 817 57,036

Reserve forces[5]

Navy 1,376 531 782 196 869 165 147 1,039 4 5,109

Army 3,842 2,604 3,285 1,219 1,537 442 595 1,020 2 14,546

Air Force 1,078 383 1,182 416 279 51 119 865 0 4,373

Subtotal 6,296 3,518 5,249 1,831 2,685 658 861 2,924 6 24,028

Total ADF 23,463 9,390 20,425 5,290 6,110 752 5,788 9,023 823 81,064

APS[6]

APS (Dept. of Defence) 2,045 2,642 1,122 1,986 367 87 308 7,254 78 15,889

APS (DMO) 1,212 1,503 330 294 205 0 27 1,724 10 5,305

Total APS 3,257 4,145 1,452 2,280 572 87 335 8,978 88 21,194

Notes

Figures in this table show employee numbers (substantive headcount).

1. Victorian figures include employees located in Albury (NSW).

2. ACT figures include employees located in Jervis Bay (Cwlth), Queanbeyan (NSW) and Bungendore (NSW).

3. Employees posted for reasons including long-term duty, training, exchange and liaison.

4. Includes paid and unpaid employees.

5. Includes Reserves on continuous full-time service.

6. Includes paid and unpaid employees, which covers full-time, part-time, ongoing and non-ongoing employees. The 30 June 2014 figures for APS include 1,474 APS employees who are also counted as Reserve members.

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Table 8.17: Star-ranked officers, 30 June 2014

Total star rank 2013-14 promotions 2013-14 separations

Men Women Total Men Women Total Men Women Total

Four star

Navy 0 0 0 0 0 0 0 0 0

Army 1 0 1 0 0 0 0 0 0

Air Force 0 0 0 0 0 0 0 0 0

Three star

Navy 4 0 4 2 0 2 0 0 0

Army 3 0 3 1 0 1 0 0 0

Air Force 2 0 2 0 0 0 0 0 0

Two star

Navy 15 1 16 3 0 3 0 0 0

Army 16 1 17 3 1 4 3 0 3

Air Force 10 0 10 4 0 4 2 0 2

One star

Navy 38 1 39 6 0 6 3 0 3

Army 52 6 58 9 2 11 4 1 5

Air Force 36 4 40 5 1 6 6 0 6

Total 177 13 190 33 4 37 18 1 19

Table 8.18: APS Senior Executive Service employees, 30 June 2014

Total SES 2013-14 engagements[1] 2013-14 separations[2]

Men Women Total Men Women Total Men Women Total

Senior Executive

Secretary 1 0 1 0 0 0 0 0 0

Band 3 12 3 15 2 0 2 0 0 0

Band 2 24 6 30 1 0 1 5 1 6

Band 1 62 28 90 0 0 0 3 4 7

Chief of Division

Grade 3 2 0 2 0 0 0 0 0 0

Grade 2 8 3 11 0 0 0 3 0 3

Senior Executive

Relief staff 14 11 25 0 0 0 0 0 0

Total 123 51 174 3 0 3 11 5 16

Notes

1. Includes resignations, retirements, redundancies and transfers to other agencies.

2. Non-SES officers who are temporarily acting in SES/Chief of Division positions due to temporary or longer term vacancies.

152 DEFENCE ANNUAL REPORT 2013-14

FEATURE |

Community grants assist Defence families across Australia Each year Defence Community Organisation (DCO) awards funding to non-profit groups that help Defence families build support networks and become involved in their local community.

DCO’s Director General Ray Bromwich said that funding for 2013-14 totalled $1.4 million and was shared among 61 groups across the country.

‘The grants support organisations that help Defence families manage military life and connect with their community through hobby and interest groups and development activities for kids and teens’, he explained.

‘Defence families posted to far-flung places like Papua New Guinea and Karratha in the Pilbara region of Western Australia can access organisations supported by our grants scheme.’

Duntroon Community Centre in Canberra has been supporting military families for more than 30 years, and uses its grant to deliver programs including playschool, playgroup, and a craft group.

Centre coordinator Jenny Lean said that the funding allows the centre to improve and grow each year, helping family members from both the military and civilian community to network and offer valuable support to each other.

‘It supports Defence families regardless of rank, particularly when partners are away’, she said.

Network Tindal in the Northern Territory also received funding in the 2013-14 round. Coordinator Renee Fox said the funding would be used for a range of community programs and social events including playgroups, craft and computer gaming groups, social cooking classes and a monthly newsletter.

‘We also run swimming lessons for six weeks, twice a year for between 70 and 100 children’, she said.

Late last year the group organised the inaugural Twilight Community Fair in Katherine, bringing together more than 550 people from the local community.

‘The fair was a great success and is one event that helps build relationships between the RAAF community and the Katherine community’, Ms Fox said.

DCO delivers other services to military families including support from a social worker, assistance for partners’ education and employment, help with childcare, assistance for dependants with special needs, help for families during crisis and emergency, education support for children, and assistance for members leaving the military.

Families can access support services by calling the all-hours Defence Family Helpline—1800 624 608—which is staffed by qualified human services professionals including social workers and psychologists.

For more information visit www.defence.gov.au/dco or www.facebook.com/ DefenceCommunityOrganisation.

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DEFENCE ANNUAL REPORT 2013-14 153

CHAPTER 9 Corporate governance

Senior management committees and their roles Defence operates seven senior committees and one board, each playing an important role in the governance and management of the organisation. Each body has an advisory role, with the chair (or chairs) exercising executive authority.

Figure 9.1: Senior management committees and their roles

Minister for Defence

Strategic

Command Group

Defence Committee

Defence Civilian Committee

Defence Capability and Investment Committee

Chief of Service Committee

Chief of the Defence Force Secretary

Gender Equality Advisory Board

Secretary and CDF Advisory Committee

Defence Audit and Risk Committee

Further details of specific roles of committees are available online.

Fraud and ethics Defence has implemented an intelligence-led fraud control program focusing on responding to emerging high risks within Defence. Defence is using the information to target allowances and contract management to disrupt potential fraudulent activity. Staff have also been embedded in the Commonwealth Fraud and Anti-Corruption Centre to coordinate efforts to combat fraud and corruption.

The Ethics and Fraud Awareness program underpins Defence’s approach to fraud control. The program consists of a face-to-face or e-learning course as well as newsletters and an intranet site for information and advice. It is mandatory for staff to participate in the program at least every two years. In 2013-14, more than 69,000 Defence personnel completed the program.

In 2013-14, 288 fraud investigations were registered within Defence and 322 investigations were completed (some of those completed were registered in previous years). Approximately 25 per cent of completed investigations resulted in criminal, disciplinary or administrative action. Of these, around 44 per cent related to disciplinary action under the Defence Force Discipline Act 1982.

The determined fraud loss for completed investigations was $1.77 million in 2013-14, while monies recovered were just under $0.13 million. Table 9.1 shows detected fraud over the past five financial years, averaging approximately $1.13 million per year within a range of $0.8 million to $1.8 million.

154 DEFENCE ANNUAL REPORT 2013-14

Table 9.1: Determined fraud loss and recoveries, 2009-10 to 2013-14

2009-10 ($) 2010-11 ($) 2011-12 ($) 2012-13 ($) 2013-14 ($)

Loss 1,039,721 916,419 1,102,979 835,685 1,770,422

Recovery 359,393 422,691 493,210 393,902 133,457

Note

The determined loss and recoveries information is based on investigations closed in the relevant year.

Audit Audit Branch provides assurance to the Secretary and the CDF that controls designed to manage Defence’s major risks are in place and are operating in an efficient and effective manner. Audit Branch also assists Defence senior managers in improving the business performance of their organisations.

During the year, Audit Branch provided internal audit services in accordance with the Audit Work Program that is endorsed by the Defence Audit and Risk Committee and approved by the Secretary and the CDF. The program is developed in consultation with all Group heads and Service chiefs. It is designed to address areas of high-level risk or activities where there are potential control deficiencies that could lead to significant financial loss or expose Defence to serious reputational damage.

Audit Branch also monitors and reports to the Defence Audit and Risk Committee, the Defence Committee and the minister on the status of the implementation of recommendations from Audit Branch and the Australian National Audit Office.

In 2013-14, Audit Branch issued a total of 22 audit reports. In addition, six Australian National Audit Office performance audits on Defence were completed, along with three cross-portfolio audits involving Defence, to which Audit Branch provided direct support. Audit Branch also facilitated Defence input into an Australian National Audit Office audit of another agency that contained a reference to Defence.

Defence Whistleblower Scheme/Public Interest Disclosure Scheme On 15 January 2014, Defence implemented the Defence Public Interest Disclosure (PID) Scheme following the commencement of the Public Interest Disclosure Act 2013. The PID Scheme replaced the Defence Whistleblower Scheme, which had been successfully operating since July 2002. Any whistleblower complaints made before 15 January 2014 will continue to be investigated under the previous scheme until finalised.

The PID Scheme facilitates and encourages public officials to report suspected wrongdoing, supports and protects disclosers, and ensures that suspected wrongdoing is investigated appropriately. Defence continues to work closely with the Commonwealth Ombudsman for PID reporting purposes and to improve the implementation of the Public Interest Disclosure Act within Defence and more broadly within the Commonwealth public sector.

Table 9.2 shows the number of allegations made to the Defence Whistleblower Scheme over the past five financial years and the number of public interest disclosures allocated to Defence and other agencies since 15 January 2014.

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DEFENCE ANNUAL REPORT 2013-14 155

Table 9.2: Reports made to the Defence Whistleblower Scheme and the Defence Public Interest Disclosure Scheme, 2009-10 to 2013-14

2009-10 2010-11 2011-12 2012-13 2013-14

Defence Whistleblower Scheme 255 242 270 253 181

PID Scheme[1] - - - - 181

Note

3. The Defence PID Scheme began operating on 15 January 2014.

Status report on the Australian Government Security Vetting Agency review The Defence Chief Audit Executive’s annual assessment in 2014 concluded that progress continues to be made since the first assessment in 2011 and that, at this time, the Australian Government Security Vetting Agency is compliant with government security vetting policy.

The annual assessment is one of 13 recommendations made by the Inspector-General of Intelligence and Security. The recommendations were the result of an inquiry requested by the then Prime Minister, following allegations of inappropriate vetting practices made by three former data entry contractors on the ABC Lateline program in 2011.

In 2013-14, the Chief Audit Executive assessed that 11 of the 13 recommendations had been fully completed, one is currently being implemented and one is in the development stage. Both recommendations that are yet to be completed are being actively managed, and progress towards their implementation is reported on a regular basis to senior management within the Australian Government Security Vetting Agency and the Defence Security Authority.

The Chief Audit Executive noted that the Australian Government Security Vetting Agency is continuing to implement a reform program to ensure compliance. Intelligence and Security Group senior management have allocated additional resources and are fully committed to the reform program.

Report of the Inspector-General of the Australian Defence Force The position of Inspector-General of the Australian Defence Force (IGADF) is established under section 110B of the Defence Act 1903. The IGADF provides the Chief of the Defence Force with a mechanism for internal audit and review of the military justice system independent of the chain of command and an avenue by which failures in the system may be examined and remedied.

The operating tempo in the Office of IGADF remained relatively high in 2013-14 and was characterised by increases in the number of submissions received for investigation or inquiry and the number of military justice performance audits completed into the military justice arrangements of ADF units. Regulation 125 of the Defence (Inquiry) Regulations 1985 provides that the CDF must report on the operation of the regulations during the financial year. There were no reports of any systemic issues or serious deficiencies in the quality of an inquiry report or a legal review during the reporting period. Further details are available online.

During 2013-14, the IGADF received 60 inquiry submissions, an increase of approximately 10 per cent on the previous year. In recent years, the trend has been that submissions disclose issues of greater complexity than in previous years, and this continued in 2013-14. During the year, the IGADF resolved 42 submissions by way of inquiry, investigation and review.

156 DEFENCE ANNUAL REPORT 2013-14

The submissions received included 18 concerning service police professional standards matters. Of those, 10 became the subject of IGADF investigations and eight were referred back to service police for further action. Of the 10 matters investigated, three complaints were substantiated and seven matters were still being investigated at the end of June 2014.

The IGADF conducted 49 ADF military justice unit audits, or audits of about 10 per cent of all auditable ADF units. In three of those units, potential material deficiencies were identified. In all, a total of 714 recommendations and suggestions to improve military justice arrangements, practices and procedures were made during 2013-14. The overwhelming majority of the recommendations and suggestions related to minor compliance or procedural issues.

During the conduct of military justice unit audits, 2,552 ADF personnel participated in focus group discussions, raising to 24,641 the total number of focus group participants since the pilot program commenced in 2004. Focus group survey outcomes in 2013-14 indicate a stronger endorsement of, and confidence in, the military justice system and the chain of command to take action to resolve military justice problems. There is also strong evidence to indicate that incremental cultural change under Pathway to Change: Evolving Defence Culture occurred within the ADF during the year.

During 2013-14, the Office of IGADF conducted 50 face-to-face courses and seminars at locations around Australia, attended by 1,599 ADF members. Of those, the vast majority attended inquiry officer familiarisation training. A further 1,058 undertook the IGADF online inquiry officer familiarisation course on campus. Other practical training opportunities offered by the IGADF included seminars on administrative sanctions, complaint handling and conducting quick assessments.

The principal themes affecting the ADF military justice narrative in 2013-14 included the attention given to cultural issues addressed in Defence’s Pathway to Change policies, the work of the Human Rights Commission’s examination of gender issues throughout the ADF, and the continuing speculation as to the future arrangements for ADF investigation, inquiry, review and redress of grievance processes arising from the finalisation of the Defence Re-thinking Review. More broadly, in the public domain, credit for dealing with the reportedly large numbers of cases of abuse within Defence over time exposed by the DLA Piper Report and the activities of the Defence Abuse Response Taskforce tended to be counterbalanced by continuing adverse media coverage of such cases, resulting in further reputational impact for Defence.

Pursuant to section 110R of the Defence Act, in 2013-14 the IGADF provided a detailed report to the CDF on the operations of the Office of IGADF.

CDF commissions of inquiry The CDF appoints commissions of inquiry (COIs) primarily to inquire into the deaths of ADF members that appear to have arisen out of, or in the course of, their service. The CDF may also appoint a COI into any other matter concerning the ADF, although this would only occur for the most serious or complex matters. COIs are intended to provide the CDF with accurate information as a basis for internal decision-making. COI reports may include recommendations intended to prevent a recurrence of incidents. Lessons learned from COIs are considered in the design and review of policy, practices, procedures and orders, and may affect decisions concerning equipment, systems and personnel.

COIs are appointed by the CDF and are presided over by a civilian with judicial experience. They may be constituted by a president alone or by a president with additional members, who may be civilians or ADF members. The appointment of a civilian president is intended to give these inquiries a degree of independence beyond that possessed by other forms of military inquiry, while the qualification of judicial experience is intended to ensure that they are conducted professionally and efficiently. The independence and judicial experience of COI presidents promotes confidence in the integrity of COIs.

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During 2013-14, four COIs were appointed, completed or remained in progress. The deaths of other members which appeared to arise out of, or in the course of, their service occurred in circumstances specified by a minister in the Defence portfolio as circumstances in which a COI was not required.

Able Seaman Ewan McDonald

A COI into the death of Able Seaman Ewan McDonald was appointed on 21 September 2012. The family and next of kin were in attendance at the public hearing, which concluded on 5 March 2013. The COI submitted its report on 16 August 2013. The outcomes of the COI will shortly be briefed to the next of kin. A decision on whether or not the report will be publicly released is yet to be made.

Sapper Jordan Ronald Penpraze

Sapper Jordan Ronald Penpraze died on 11 October 2012 as a result of a single vehicle roll-over accident three days earlier. A COI into the death was appointed on 24 October 2012, and hearings commenced on 8 April 2013. Hearings have been adjourned while criminal proceedings against the driver of the vehicle take place.

Midshipman Peter Bach

A COI into the death of Midshipman Peter Bach was appointed on 24 November 2012. The family of Midshipman Bach attended the hearings, which commenced on 8 March 2013. The COI submitted its report on 15 October 2013. The outcomes of the COI have been briefed to the next of kin. A decision on whether or not the report will be publicly released is yet to be made.

Fire at Marrangaroo Training Area

A COI into the circumstances surrounding a fire at the Marrangaroo Training Area on 16 October 2013 was appointed on 26 October 2013. Hearings commenced on 9 December 2013, and the COI submitted its report on 31 January 2014. A redacted copy of the report was publicly released on 17 June 2014.

CDF inquiry officer inquiries Inquiry officer inquiries (IOIs) are generally appointed by the CDF as a fact-finding tool following combat or combat-related deaths of ADF members. IOI reports are used to inform the CDF before appointing a COI, or to inform the Minister for Defence before specifying that a member’s death has occurred in circumstances in which a COI is not required.

In a paper on Afghanistan tabled in conjunction with a ministerial statement on 9 February 2012, the then Minister for Defence, the Hon Stephen Smith MP, stated that the past focus of the IOI process had been on the public release of IOI reports, which had been released as a matter of course. The minister indicated that the focus needed to be on the timely provision of the report to the family of the deceased. Any decision on publicly releasing a report would come after weighing the wishes of family members and public interest in the release of the report.

During 2013-14, one IOI into a combat death was appointed and completed. This death occurred in circumstances specified by the minister as circumstances in which a COI was not required.

Corporal Cameron Stuart Baird, VC, MG

Corporal Cameron Baird, 2nd Commando Regiment, was killed in action as a result of enemy fire in Afghanistan on 22 June 2013. An IOI was appointed on 5 July 2013, and the inquiry officer submitted their report on 12 September 2013. The outcomes of the IOI have been briefed to the family. A redacted copy of the report was publicly released on 7 March 2014.

A number of other IOIs into combat and combat-related deaths that were completed during the previous financial year were announced by Defence as having been concluded. The reports were released to the public in some instances.

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CHAPTER 10 External accountability

Parliamentary business In 2013-14, Defence provided 10 written submissions to various Senate, House of Representatives and joint committee inquiries. Defence witnesses appeared at nine hearings providing evidence on a range of issues, took 35 questions on notice (16 had not yet been tabled at 30 June 2014) and either tabled or contributed to eight government responses to parliamentary committee reports throughout the year. These are available at aph.gov.au.

To assist parliamentary committee members to gain a better understanding of Defence issues, Defence also provided private briefings on a variety of subjects, including matters of regional security and capability.

Table 10.1: Defence’s parliamentary contribution, 2011-12 to 2013-14

Parliamentary contribution 2011-12 2012-13 2013-14

Written submissions 15 24 10

Whole-of-government submissions 1 Nil 1

Government responses 5 2 8

Public hearings 14 16 13

Private briefings 12 14 25

Total 47 46 57

Parliamentary committees

Tables 10.2 to 10.4 provide information on Defence’s activities in relation to parliamentary committee inquiries.

Table 10.2: Defence’s involvement with joint committees, 2013-14

Joint committee

Joint Standing Committee on Foreign Affairs, Defence and Trade

SEA 4000 Air Warfare Destroyer

Inquiry into Australia’s Relationship with Timor-Leste

Inquiry into the Review of the Defence Annual Report 2011-2012

Inquiry into the Care of ADF Personnel Wounded and Injured on Operations

Inquiry into the Human Rights Issues Confronting Women and Girls in the Indian Ocean - Asia-Pacific Region

Inquiry into the Review of the Defence Annual Report 2012-13

Inquiry into Government Support for Australian Defence Industry Exports

Joint Parliamentary Committee on Intelligence and Security

Inquiry into Reforms of Australia’s National Security Legislation

Review of Administration and Expenditure 2012-13

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Joint committee

Joint Committee of Public Accounts and Audit

Report 422—Review of the 2012-13 DMO Major Project Report

Report 443—Review of Auditor-General’s Report Numbers 23 and 25 (2012-13) and 32 (2012-13) to 9 (2013-14)

Joint Standing Committee on Public Works

Joint Project 2047 Phase 3 Defence Terrestrial Communications Network Facilities and Infrastructure Project (JP 2047)

Air 9000 Phase 5C replacement Chinook facilities project, Townsville, Queensland

Development and Construction of Housing for Defence at RAAF Base Tindal, Northern Territory

Joint Standing Committee on Treaties

Treaty between the Governments of Australia and the United Kingdom and Northern Ireland for Defence Security Cooperation

Table 10.3: Defence’s involvement with Senate committees, 2013-14

Senate committee

Senate Standing Committee on Foreign Affairs, Defence and Trade

Government Response to the Defence Abuse Response Taskforce

Inquiry into the Breach of Indonesian Territorial Waters

Report of the Review of Allegations of Sexual and Other Abuse in Defence, DLA Piper

Inquiry into the Importance of the Indian Ocean Rim for Australia’s Foreign, Trade and Defence Policy, tabled 6 March 2014

Inquiry into Australia’s Overseas Development Programs in Afghanistan

Implementation of the Defence Trade Controls Legislation

Defence Legislation Amendment (Woomera Prohibited Area) Bill 2013

Defence Legislation Amendment (Woomera Prohibited Area) Bill 2014

Senate Standing Committee on Finance and Public Administration

Inquiry into Commonwealth Procurement Procedures

Further information on Defence’s involvement with parliamentary committees is available online.

Senate Estimates and questions on notice

Defence attended three estimates hearings before the Senate Standing Committee on Foreign Affairs, Defence and Trade (Table 10.4) and responded to a total of 450 questions on notice from the three hearings (Table 10.5). Of the questions taken on notice from the Senate and House of Representatives notice papers during 2013-14, Defence was asked a total of 18 (two had not yet been tabled at 30 June 2014).

Table 10.2 (continued)

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Table 10.4: Defence’s involvement with Senate Estimates, 2014-14

Senate Standing Committee on Foreign Affairs, Defence and Trade

Supplementary Budget Estimates 2013-14 Defence witnesses appeared at a hearing on 20 November 2013. Thirty-four questions were taken on notice during the hearing. An additional 103 written questions were received following the hearing.

Additional Estimates 2013-14 Defence witnesses appeared at a hearing on 26 February 2014. Twenty-eight questions were taken on notice during the hearing. An additional 108 written questions were received following the hearing.

Budget Estimates 2014-15 Defence witnesses appeared at hearings on 2 and 3 June 2014. Fifty-three questions were taken on notice during the hearing. An additional 124 written questions were received following the hearing.

Table 10.5: Defence’s questions on notice, 2011-12 to 2013-14

Source of questions on notice 2011-12 2012-13 2013-14

House of Representatives/Senate notice paper 358 167 18

Senate Estimates (October, February, June) 650 440 450

Parliamentary inquiries 118 97 35

Total 1126 704 503

Judicial decisions and decisions of administrative tribunals In Danthanarayana and Another v Commonwealth of Australia & Ors [2014] FCA 552, the applicants sought damages for adverse consequences alleged to have been caused by the actions of the Commonwealth, six Defence employees and a contractor. On 28 May 2014, the Federal Court summarily dismissed the applicant’s Further Amended Statement of Claim as it failed to disclose a reasonable cause of action for the tort of civil conspiracy, for misfeasance in public office or for damages under the Trade Practices Act against the respondents. The court found that the applicants had no reasonable prospects of successfully prosecuting any of those causes of action and that the first applicant’s pleaded allegations of negligence were deficient and should be struck out. The court allowed the first applicant one last opportunity to plead a claim in negligence as against the Commonwealth subject to the condition that any further pleadings be submitted both to the court and to the respondents for consideration prior to leave being granted to file a further amended application. The matter is continuing and is expected to resume before the Federal Court later in 2014.

An ADF member had been convicted of a service offence of creating a disturbance on service land following a court martial under the Defence Force Discipline Act 1982. The conviction was upheld, on subsequent appeals, by the Defence Force Discipline Appeal Tribunal and the Full Court of the Federal Court. In Li v Chief of Army [2013] HCA 49, the High Court unanimously allowed an appeal against a decision of the Full Court of the Federal Court and quashed the conviction. The High Court held that ‘creating a disturbance’ involves the intentional doing of an act which results in a non-trivial interruption of order, the person charged being reckless as to the occurrence of that result. The High Court found that the court martial had been misdirected as to the proper law at first instance. The court remitted the matter to the Defence Force Discipline Appeal Tribunal for further consideration.

On 2 June 2014, the ACT Supreme Court dismissed the plaintiff’s application, in Barry Thomas Blunden v Commonwealth of Australia [2014] ACTSC 123, to reinstate proceedings under rule 76 of the ACT Court Procedures Rules 2006. The plaintiff’s application for an extension of time to commence proceedings seeking common law damages for injuries alleged to have been suffered as a consequence of the HMAS Voyager/HMAS Melbourne collision in 1964 had been previously dismissed by the ACT Supreme Court in 1999 and an appeal from that decision had not been successful. The court noted the prior applications and appeals between 2000 and 2007 and found that the plaintiff had taken no substantive steps in the proceedings since October 2007. The court found no justification in the interest of justice for the proceedings to be reinstated.

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Auditor-General’s reports In 2013-14, the Auditor-General tabled six performance audit reports relating directly to Defence and the Defence Materiel Organisation. The reports are listed in Table 10.6. Table 10.7 lists cross-portfolio audits involving Defence that were tabled during the year. Table 10.8 gives details of an audit in which Defence participated as the largest holder of radiation sources monitored by the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA). The Auditor-General’s findings and recommendations can be found at www.anao.gov.au.

Table 10.6: Auditor-General’s reports on Defence, 2013-14

Report Objective

Audit Report No. 3, AIR 8000 Phase 2—C-27J Spartan Battlefield Airlift Aircraft, tabled 15 August 2013

The objective of the audit was to assess the adequacy of Defence’s processes, including compliance with the Financial Management and Accountability Act 1997, the Financial Management and Accountability Regulations 1997, and relevant Commonwealth and Defence procurement requirements, to select the capability solution recommended to the Government to satisfy the requirements of AIR 8000 Phase 2.

Audit Report No. 6, Capability Development Reform, tabled 30 October 2013

The objective of the audit was to examine the effectiveness of Defence’s implementation of reforms to capability development since the introduction of the two-pass process for government approval of capability projects and the Government’s acceptance of the reforms recommended by the Mortimer Review. The scope of this audit included the requirements phase and, to a limited extent, the acquisition phase of major capability development projects, focusing on changes flowing from the major reforms.

Audit Report No. 14, Explosive Ordnance and Weapons Security Incident Reporting, tabled 18 December 2013

The audit objective was to assess the effectiveness of Defence’s arrangements for monitoring and reporting explosive ordnance and weapons security incidents.

Audit Report No. 22, Air Warfare Destroyer Program, tabled 6 March 2014

The objective of the audit was to report on the progress of the current phase of the Air Warfare Destroyer Program, which is known as SEA 4000 Phase 3—Build. This phase commenced in June 2007, and covers the finalisation of the detailed design, the signing of the Alliance and Platform System Design contracts, and the construction and delivery of the ships by the industry participants to the Defence Materiel Organisation.

Audit Report No. 24, Emergency Defence Assistance to the Civil Community, tabled 16 April 2014

The audit objective was to assess the administrative effectiveness of Defence’s procedures to provide emergency assistance to the civil community.

Audit Report No. 52, Multi-Role Helicopter Program, tabled 25 June 2014

The audit objective was to assess Defence’s progress in delivering multi-role helicopters (MRH-90 aircraft) to the ADF through AIR 9000 Phases 2, 4 and 6, within approved cost, schedule and performance parameters.

Table 10.7: Auditor-General’s cross-portfolio reports involving Defence, 2013-14

Report Objective

Audit Report No. 21, Pilot Project to Audit Key Performance Indicators, tabled 27 February 2014

In 2013-14, the ANAO pilot project to audit key performance indicators was continued with the objective of conducting a review of framework developments, in terms of both the clarity of the policy and guidance issued by Finance and the performance of agencies in applying this policy and guidance, as a basis for implementing a future program of audits; and to further develop and test an audit methodology to address the practical challenges of assessing the appropriateness of key performance indicators, and their complete and accurate reporting.

Audit Report No. 47, Managing Conflicts of Interest in FMA Agencies, tabled 23 June 2014

The audit objective was to determine whether Australian Government agencies were implementing appropriate policies and processes to identify and manage conflicts of interest.

Audit Report No. 54, Establishment and Use of Multi-Use Lists, tabled 26 June 2014

The objective of the audit was to assess the extent to which agencies have arrangements to establish and use multi-use lists to support value for money, efficiency and effectiveness in procurement.

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Table 10.8: Auditor-General’s report on ARPANSA, 2013-14

Report Objective

Audit Report No. 29, Regulation of Commonwealth Radiation and Nuclear Activities, tabled 7 May 2014

The objective of the audit was to assess the effectiveness of ARPANSA’s management of the regulation of Commonwealth nuclear and radiation facilities and sources, including ARPANSA’s compliance with its legislative requirements.

Ombudsman’s reports There were no formal reports to the Chief of the Defence Force pursuant to section 15 of the Ombudsman Act 1976 during 2013-14; nor were any reports raised under section 16, 17 or 19 of the Act relating to the operations of the ADF during the period.

Information Publication Scheme Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme. Each agency must display on its website a plan showing what information it publishes in accordance with the scheme’s requirements.

Further information is available online at http://www.defence.gov.au/ips.

Freedom of information Table 10.9 shows the number of freedom of information requests received and completed or otherwise dealt with in 2013-14. The figures refer to requests for access to documents under section 15 of the FOI Act. Defence was 100 per cent compliant in 2013-14.

Defence also handles requests under Part V of the FOI Act for amendment or annotation of records of personal information. In 2013-14, 10 applications for amendment were received and 10 were completed. Defence also received 32 applications for internal review and completed 34 (which includes applications carried over from 2012-13).

In addition to formal FOI requests, the FOI Directorate processed 538 requests for access to personnel records that were redirected for administration, in accordance with section 15A of the FOI Act. Section 15A provides for access to be given in such cases, outside the provisions of the FOI Act, through established administrative channels.

The Directorate also assisted with the resolution of 441 other inquiries that did not require consideration under the FOI Act, which were also addressed through established administrative channels.

Table 10.10 shows Defence’s performance in meeting the applicable statutory time limit for responding to requests for access to documents under section 15 of the FOI Act.

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Table 10.9: Requests for access to documents received and completed or otherwise dealt with under section 15 of the FOI Act, 2011-12 to 2013-14

2011-12 2012-13 2013-14

Number of requests received 334 414 433

Number of requests finalised (including withdrawn or transferred to another agency) 349 422 420

Number of requests withdrawn 94 121 125

Number of requests transferred to another agency 4 1 13

Total requests finalised under section 15 251 300 282

Number of requests outstanding 40 32 45

Table 10.10: Time taken to answer requests for access to documents under section 15 of the FOI Act, 2011-12 to 2013-14

2011-12 2012-13 2013-14

Applicable statutory period (with % of total) 251 (100) 300 (100) 282 (100)

Up to 30 days over[1] (with % of total) _ _ _

Up to 31 to 60 days over[1] (with % of total) _ _ _

Up to 61 to 90 days over[1] (with % of total) _ _ _

More than 90 days over[1] (with % of total) _ _ _

Note

4. Over the applicable statutory period.

164 DEFENCE ANNUAL REPORT 2013-14

CHAPTER 11 Asset management, procurement and capital investment

Defence asset management Defence manages $74.9 billion of total assets. This includes:

• approximately $41.3 billion of specialist military equipment

• $24.1 billion of land, buildings and infrastructure

• $6.4 billion of inventory

• $1.0 billion of heritage and cultural assets

• $2.1 billion of other items, including cash, receivables and prepayments.

Defence Groups and Services, including the Defence Materiel Organisation (DMO), are accountable for the underlying business transactions and records that substantiate the reported financial balances of assets under their control.

Defence Asset Accounting within the Chief Finance Officer Group undertakes accounting processes to enable the accurate and timely reporting of asset balances and to ensure that they are consistent with requirements for financial statements reporting defined in the Australian Accounting Standards.

During 2013-14, Defence worked to secure and advance the improvements in financial and asset management achieved in previous years. This was achieved by:

• evolving the shared services delivery model for asset accounting to further enhance the financial reporting of assets and deliver standardised policies and processes to support the management of assets

• a maturing data assurance framework and controls environment to identify and resolve asset management issues swiftly as they occurred.

Defence procurement Defence undertakes procurement in accordance with the Commonwealth Resource Management Framework and Defence policies. For the Commonwealth Procurement Rules (CPRs) Division 1, Defence must comply with the rules for all procurements regardless of the procurement value. The rules include:

• value for money

• encouraging competition

• efficient, effective, economical and ethical procurement

• accountability and transparency in procurement

• procurement risk

• procurement method.

Procurements at or above the relevant procurement threshold are subject to Division 2 of the CPRs. Exemptions are included in the CPRs Appendix A: Exemptions from Division 2.

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Under non-materiel procurement shared services, the Defence Support and Reform Group provides high-level procurement advice and support to officials who exercise delegations under the Financial Management and Accountability Act 1997.

The value, volume and complexity of Defence’s non-materiel procurement requirements allow Defence to leverage its purchasing power. The organisation’s strategic view of its non-materiel procurements enables it to establish long-term relationships with suppliers where appropriate.

The Defence Annual Procurement Plan is published on the AusTender website (www.tenders.gov.au) to give industry notice of potential business opportunities and to help it prepare for the competitive tendering phase. Defence publishes open tenders on AusTender.

Defence conducts industry consultations for significant procurements before approaching the market and holds industry briefings during the tender open period. These processes inform suppliers of the scope of the organisation’s business requirements and proposed procurement and contracting strategies, and provide feedback on compliance obligations, risks, cost issues and innovation opportunities. Defence engages with potential suppliers ethically throughout the procurement cycle and uses equitable and non-discriminatory complaint-handling procedures.

The organisation also engages with suppliers at corporate and contract management levels through consultations, briefings, industry engagement meetings, strategic contract management review meetings and conferences. Defence is implementing procurement strategies to improve the application of supplier diversity requirements.

Defence monitors contractor performance, provides feedback to its suppliers and sustains industry relationships throughout the procurement contracting cycle.

Defence Materiel Organisation asset management The DMO manages its assets in accordance with Chief Executive Instructions, relevant accounting standards and internal DMO guidelines.

The DMO’s property, plant and equipment, which were valued at $5 million, are subject to an annual stocktake to ensure that records are accurate. Impairment reviews were also undertaken at 30 June 2014, and valuations were conducted as outlined in Note 1.21 of the DMO financial statements in Volume Two of this report.

Defence Materiel Organisation specialist legal, procurement and contracting policy and practice The Contracting and Legal Division in the DMO Commercial Group makes a critical contribution to the acquisition and support of ADF capability. As part of its work, it provides strategic commercial law advice and contracting support directly to DMO project and system project offices, maintains and improves Defence procurement policy, guidance and contracting templates, and takes responsibility for whole-of-Defence procurement training and professionalisation.

Major procurement policy and practice achievements during 2013-14 included a significant update to the Defence Procurement Policy Manual in preparation for the commencement of the Public Governance, Performance and Accountability Act 2013, the release of two new templates designed to aid industry engagement during the early stages of capability development, and the inclusion of new work health and safety provisions in contracting templates in response to industry feedback. In addition, the division made significant progress on two major commercial reform initiatives focused on intellectual property and technical data and on the allocation of commercial risk under the contracting templates.

166 DEFENCE ANNUAL REPORT 2013-14

Another achievement of the Contracting and Legal Division during 2013-14 was the establishment of the Performance Based Contracting Centre of Excellence. In its first year of operation, the centre supported 55 projects and system program offices in drafting, negotiating and implementing performance-based contracts. The centre has also taken an active role in enhancing knowledge and expertise in performance-based contracting across the DMO by developing practical guidance and specialised training and by evolving the DMO approach to performance indicator setting and measurement.

AusTender business improvement initiatives remained a key focus area for the division during 2013-14. As a result of these efforts, the DMO has expanded its electronic tendering. Policy introduced during 2013-14 now mandates e-tendering for procurements valued at over $200,000.

FEATURE |

Pacific Services Group Holdings—Indigenous-owned enterprise An Indigenous-owned enterprise, Pacific Services Group Holdings, has been engaged by Defence to deliver a project worth up to $6 million in support of the Navy’s Canberra-class amphibious assault ships. This is a first for an Australian Government construction contract.

Defence used an exemption under the Commonwealth Procurement Rules to engage Pacific Services as the head contractor for

the works, which will refurbish existing marine infrastructure and buildings at HMAS Waterhen in Sydney in preparation for the landing helicopter dock (LHD) landing craft. Under the exemption, a small to medium enterprise with at least 50 per cent Indigenous ownership can be directly engaged without the need to conduct a full tender process, on the condition that the procurement represents value for money.

The landing craft will serve as critical ship-to-shore connectors for the multi-billion-dollar LHD ships, which will be central to the ADF’s amphibious capability.

Pacific Servies Group Holdings and Defence contract signing

Back row (L to R): Ms Holly Lowe (Defence), Lieutenant Commander Steele Morgan (Defence), Mr Pat Gagel (Defence), Mr Chris Bulmer (Pacific Services) and Mr Nathan Austin (Pacific Services) Front row (L to R): Mr Shane Jacobs (Pacific Services) and Colonel Ian Cumming (Defence)

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Approved Major Capital Investment Program The Approved Major Capital Investment Program generally comprises those projects that cost more than $20 million and which, following approval, have been transferred from the Defence Capability Plan to acquisition agencies within Defence to manage the acquisition phase.

Funding for approved major capital equipment projects, including project management and overhead costs, is usually provided by Defence to the DMO under separate materiel acquisition agreements for each project. Funding is also provided to other groups, such as the Chief Information Officer Group and the Defence Support and Reform Group, to deliver the ICT and infrastructure components of the projects. A small number of projects are led by Groups other than the DMO, such as the Chief Information Officer Group and the Intelligence and Security Group.

Projects costing between $20 million and $100 million are approved jointly by the Minister for Defence and the Minister for Finance. Projects costing more than $100 million are approved by the National Security Committee of Cabinet.

2013-14 achievements In 2013-14, a total of 26 approvals with a combined value of more than $19 billion were achieved. Significant approvals were for:

• AIR 6000 Phase 2A/2B—New air combat capability (58 aircraft)

• AIR 7000 Phase 2B—Maritime patrol aircraft replacement

• LAND 75 Phase 4—Battle management system command and control (LAND 200 Tranche 2)

• LAND 121 Phase 3B/5B—Field vehicles, modules and trailers

• SEA 1352 Phase 1—Evolved Sea Sparrow missile upgrade and inventory replenishment

• SEA 1442 Phase 4—Maritime communications modernisation.

Capital Facilities Program The Capital Facilities Program comprises approved and unapproved major and medium projects.

Major capital facilities projects are defined as having expenditure over $15 million (including GST) and are subject to government approval and review by the Parliamentary Standing Committee on Public Works.

Medium facilities projects have expenditure between $500,000 and $15 million (including GST). Projects between $2 million and $15 million are subject to departmental or government approval and are notified to the Standing Committee on Public Works.

The Capital Facilities Program develops facilities and infrastructure to support the Approved Major Capital Investment Program, sustain current and future capability requirements, support other government initiatives, meet legislative obligations and assist initiatives that support Defence personnel. A significant proportion of the program funding is directed towards the provision of basic engineering and infrastructure services, in support of new projects and upgrades to existing facilities.

The following information is available online:

• major capital investment projects

• approved major and medium capital facilities projects

• proposed major and medium capital facilities projects

• Single Living Environment and Accommodation Precinct (LEAP) projects

• major Defence bases and establishments.

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APPENDIX A Environmental performance

Defence

Ecologically sustainable develpoment

Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) requires Australian Government organisations to report annually on their environmental performance and contribution to ecologically sustainable development.

Defence environmental policies and processes, particularly Defence environmental impact assessments, provide for both the sustainable development of the Defence estate and the environmentally sound conduct of Defence activities on land, at sea and in the air in support of Australia’s defence capability in accordance with the EPBC Act.

Environmental support to redeployment in Afghanistan was a high priority in 2013-14. Specialist support ensured that Joint Task Force 633 met environmental due diligence requirements at the multi-national base at Tarin Kot. A combined environmental management group also augmented Exercise Talisman Sabre 13 to provide on-ground environmental advice and assistance.

Effect of activities on the environment

Defence continued to conduct its program of environmental impact assessment to ensure that the environmental risks of Defence activities were properly considered and managed. This ensured that those activities did not have significant adverse impacts on the environment.

Referrals

Under the EPBC Act, agencies are required to refer any action that is likely to have a significant impact on the environment. In 2013-14, Defence referred one action for formal consideration under the Act (Table A.1).

Two Defence actions were subject to continuing assessment under the Act during 2013-14 (Table A.2).

Table A.1: Defence actions referred under the Environment Protection and Biodiversity Conservation Act, 2013-14

Defence action

EPBC referral number Date referred Status

Removal of heritage buildings at RAAF Base Amberley, Ipswich, Queensland

2014/7123 28 February 2014 Assessment will be by preliminary documentation.

Defence is preparing a preliminary documentation report.

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Table A.2: Defence actions subject to continuing assessment under the Environment Protection and Biodiversity Conservation Act, 2013-14

Defence action

EPBC referral number Status

Removal of Bellman hangars at RAAF Williams (Point Cook) due to structural deterioration

2008/4251 The action is being assessed through a preliminary documentation process.

Defence is preparing a preliminary documentation report.

Flying operations of the F-35 Joint Strike Fighter at RAAF Bases Williamtown and Tindal and the Salt Ash Air Weapons Range

2010/5747 The action is being assessed through an environmental impact statement process.

Defence submitted the environmental impact statement in April 2014.

Measures taken to minimise the effect of activities on the environment

Defence continued to apply a risk-based approach to the application of measures aimed at minimising the impacts of activities on the environment.

Defence activities that are considered to pose a low risk to the environment are managed through existing protocols, such as standard operating procedures, standing orders and environmental and heritage management plans. Types of activities that are considered low risk include routine and small-scale military training activities, minor construction works, building refurbishments and the use of some new or upgraded military equipment.

Defence activities that are considered to have medium environmental risks are assessed and managed through the Defence Environmental Clearance Certificate process. A clearance certificate is also required for activities where no policies or procedures already exist to ensure that appropriate environmental mitigation strategies or management plans are in place.

Higher-level assessments are conducted for actions or activities that are likely to have a significant impact on the environment. Comprehensive assessments, such as the preparation of an environmental impact statement or preliminary documentation report, are conducted in accordance with the provisions of the EPBC Act and involve community consultation. Higher environmental risk activities can include large-scale training exercises, major infrastructure works, and the introduction of major equipment or activities in environmentally sensitive locations. These activities receive comprehensive environmental impact assessments that include advice from professional environmental consultants.

Internal management tools

The Defence Environmental Management System is a key component of the Defence Estate Quality Management System and is to be fully integrated into the Garrison and Estate Management System, which is under development. The quality management system meets the AS/NZS ISO 9001:2008 international quality management standard and provides a platform for continuous improvement, compliance and the achievement of best practice in developing and managing the Defence estate and related services.

The 2010-14 Defence Environmental Strategic Plan outlines a range of programs and initiatives that continued to be implemented in 2013-14. Defence also began the development of its Environmental Manual as a central repository for environmental policy and guidance.

A list of Defence’s environmental improvement initiatives and reviews in 2013-14 is available online.

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During 2013-14, the organisation continued to implement specific initiatives in the following areas:

• energy management

• water and waste management

• land management and biodiversity conservation

• interaction with marine and aquatic environments

• heritage

• climate change

• pollution prevention and contaminated sites management

• ozone-depleting substances and synthetic greenhouse gases.

Defence continued to establish and maintain strategic partnerships with universities, local community groups, key stakeholders, local governments and non-government organisations, and employed various management processes and practices, technologies and infrastructure to minimise the effect of activities on the environment.

Defence Materiel Organisation The DMO manages equipment and systems to ensure that the principles of ecological sustainability are adhered to during the acquisition, sustainment and disposal of materiel. By systematically applying Defence’s environmental management concepts and procedures, the DMO aims to reduce its environmental footprint through a workforce culture of sustainable environmental management principles and practices. Its Environmental Management System reduces potential environmental impacts through continuous improvement in management and performance.

Achievements in environmental management during 2013-14 included the following:

• The DMO reviewed its Environmental Management System with the aim of refining the system further. Key components of the review were:

- an examination of the DMO’s and Defence’s procedures and policies related to environmental management

- a review of processes related to environmental risk management and their application across the capability and project lifecycles.

Outcomes of this review will influence future work on the integration of environmental management within the DMO and between organisations, and throughout the capability lifecycle. Implementation has begun.

• The DMO continued to update other environmental management policies, procedures and guidance.

• Through continued commitment to the Defence Environmental Management Forum, the DMO supported the development of a new Defence Environmental Strategic Plan to succeed the 2010-14 plan.

• The organisation assisted Joint Logistics Command with preparations for Australia’s ratification of the Minamata Convention on Mercury, which aims to protect human health and the environment from anthropogenic emissions and releases of mercury and mercury compounds. This work included the production of an impact assessment report to advise on the impact that Australia’s obligations under the convention is expected to have on acquisition and sustainment. This will enable Defence to inform the Government and ensure that Defence’s interests are properly considered during treaty ratification and implementation, which is being led by the Department of the Environment.

B APP

DEFENCE ANNUAL REPORT 2013-14 171

CONSULTANCIES AND CONTRACTS

APPENDIX B Consultancies and contracts

Overview Defence engages consultants where it lacks specialist expertise or when independent research and assessment are required. The process for selecting consultants is consistent with Defence procurement policies and the Commonwealth Procurement Rules.

Consulting contracts In 2013-14, Defence (including the Defence Materiel Organisation) entered into 487 new consultancy contracts (359 with a value greater than $10,000) involving total actual expenditure of $33.3 million (including GST). In addition, 271 consultancy contracts remained active, involving total actual expenditure of $10.6 million (including GST).

This annual report contains information about actual expenditure on contracts for consultancies. Information on the value of individual contracts and consultancies is available on the AusTender website. Table B.1 records total expenditure in-year for consulting contracts rather than the full value of the contract.

Table B.1: Total expenditure on consulting contracts, 2011-12 to 2013-14

2011-12 $m

2012-13 $m

2013-14 $m

Defence 61.5 37.8 38.3

DMO 5.1 2.9 5.6

Table B.2 shows a summary sorted by Defence Group of 2013-14 consultancies let with a contract value greater than $10,000 (including GST).

Table B.2: Consultancies let greater than $10,000, by Group, 2013-14

Group Number of contracts let Total contract value ($)

Office of the Secretary and CDF 0 0

Vice Chief of the Defence Force Group 1 34,640

Joint Operations Command 2 94,244

Navy 1 142,808

Army 5 1,186,798

Air Force 1 528,730

Capability Development Group 0 0

172 DEFENCE ANNUAL REPORT 2013-14

Group Number of contracts let Total contract value ($)

Chief Finance Officer Group 3 595,500

Chief Information Officer Group 15 2,161,215

Defence Science and Technology Organisation

2 126,170

Defence Support and Reform Group 270 33,412,798

Intelligence and Security Group 15 2,592,375

People Strategies and Policy Group 17 1,770,974

Defence Materiel Organisation 27 9,226,424

Total 359 51,872,676

Contracts exempt from the AusTender

In 2013-14, Defence (including the DMO) reported a total of 173 contracts, standing offers or variations, with a total value of $273.7 million, which were subject to an exemption under the Freedom of Information Act 1982. These exemptions were generally applied under the national security provisions of the Act.

Australian National Audit Office access clauses

The Defence contracting templates include standard clauses providing for Auditor-General access to contractors’ and major subcontractors’ premises, records and accounts. Defence has identified the following contracts that were exempt from the requirement to provide Auditor-General access, totalling just over $1.9 billion.

Defence utilises the United States Department of Defense’s Foreign Military Sales program, which facilitates sales of US arms, defence equipment, defence services and military training to foreign governments. The standard terms and conditions for Foreign Military Sales do not contain ANAO access provisions.

Table B.3: Contracts that do not include the ANAO access clause

Group and company 2013-14 ($) Purpose

Navy

Egeria Pty Ltd 201,200 Program and project management services in

support of Navy information management[1]

Egeria Pty Ltd 111,273 Information management objective and Navy

management diary training[1]

Egeria Pty Ltd 116,800 Information Management Services Group

drive management[1]

Institution of Engineers Australia 200,088 Memberships[1]

United Kingdom Hydrographic Office 295,694 Navigation charts[2]

Randstad Pty Limited 108,180 Business process analyst[1]

Aquila Marine 164,455 Inflatable sailing boats [1]

Mr Paul Rizzo 156,141 Chair, Rizzo Reform Implementation Committee[1]

Total for the Navy 1,353,831

Table B.2 (continued)

B APP

DEFENCE ANNUAL REPORT 2013-14 173

CONSULTANCIES AND CONTRACTS

Group and company 2013-14 ($) Purpose

Army

Abco Water Systems 182,985 Hire—wastewater treatment plant[3,4]

United States Department of Defense 13,386,840 Provision of training by the US Army[5]

Myriad Technologies Pty Ltd 603,493 Specialist engineering support[3,4]

BAE Systems Australia Limited 169,403 Provision of services to deliver gateway[3,4]

Cistech Solutions 824,800 Core networking[3,4]

G.H. Varley Pty Ltd 3,224,685 Mounted SATCOM terminal[3,4]

M5 Networks Australia Pty Ltd 3,248,896 Research and development[3,4]

MRB Communications Pty Ltd 281,728 Radios and equipment[3,4]

Myriad Technologies Pty Ltd 406,588 Specialist engineering support[3,4]

Myriad Technologies Pty Ltd 840,864 Specialist engineering[3,4]

Saab Systems Pty Ltd 471,167 Software support services[3,4]

Elbit Systems of Australia Pty Ltd 9,250,000 Training[3,4]

Calytrix Technologies Pty Ltd 990,000 Radio desk-top training system[3,4]

Georgiou Group Pty Ltd 452,985 Construction services[3,4]

Adelaide Metal Fabrication Pty LTd 122,452 Construction of metal cubes[3,4]

Rentokil Pest Control (Qld) Pty Ltd 200,741 Bird-proofing [3,4]

Weymouth Sporting Solutions 125,300 Anti-gravity running machine warranty[3,4]

Madang Resort and Kalibobo Village 318,690 Accommodation[3,4]

Boeing Information Space and Defence 395,975 Specialist maintenance training[3,4]

GATR Technologies Inc. 299,746 Equipment[3,4]

Total for the Army 35,797,338

Vice Chief of the Defence Force Group

Georgiou Group Pty Ltd 1,483,250 Construction of health facilities[1]

Georgiou Group Pty Ltd 347,336 Construction of health facilities[1]

Australian Centre for Posttraumatic Mental Health

262,735 Mental health screening[6]

Oakton Services Pty Ltd 714,428 Project support and reporting[7]

Total for the Vice Chief of the Defence Force Group 2,807,749

Defence Materiel Organisation

Foreign Military Sale 112,803 Technical support services

Foreign Military Sale 154,939 Component improvement program

Foreign Military Sale 205,600 Supply and support of climate prediction software

Foreign Military Sale 219,356 Cryptographic computers

Foreign Military Sale 264,158 Foreign Liaison Office USAF office administration

Foreign Military Sale 441,669 Foreign Liaison Officer support

Table B.3 (continued)

174 DEFENCE ANNUAL REPORT 2013-14

Group and company 2013-14 ($) Purpose

Foreign Military Sale 518,617 Explosive ordnance

Foreign Military Sale 607,054 Torpedo repairs

Foreign Military Sale 685,635 Explosive ordnance

Foreign Military Sale 802,292 MOVER software

Foreign Military Sale 910,885 Testing radar warning receiver

Foreign Military Sale 949,490 Procurement of various munitions for

MH-60R Seahawk

Foreign Military Sale 993,778 Explosive ordnance

Foreign Military Sale 1,071,175 Specialist system training

Foreign Military Sale 1,400,094 Training missiles

Foreign Military Sale 1,899,413 Procurement of high-grade crypto equipment

Foreign Military Sale 2,019,515 Explosive ordnance

Foreign Military Sale 2,190,951 Follow-on support for AIM-9M Sidewinder

Foreign Military Sale 2,233,640 Aircraft support equipment

Foreign Military Sale 2,688,095 Electronic equipment

Foreign Military Sale 3,479,626 Repairable items and ground support equipment

Foreign Military Sale 3,993,022 Aircraft components, parts and accessories

Foreign Military Sale 4,331,018 Procurement of cryptographic equipment

Foreign Military Sale 10,162,257 Follow-on support case

Foreign Military Sale 10,442,267 In-service support services

Foreign Military Sale 14,671,796 Equipment and support for Standard Missile-2

for Guided Missile Test Set modifications

Foreign Military Sale 15,635,480 Aircraft spares and components

Foreign Military Sale 16,752,300 Missile support

Foreign Military Sale 16,778,784 Spares and support equipment

Foreign Military Sale 20,149,920 RAN fleet sustainment

Foreign Military Sale 22,358,800 Technical support services

Foreign Military Sale 26,120,125 Aircraft software system configuration set

Foreign Military Sale 27,342,290 Inventory

Foreign Military Sale 29,349,438 Explosive ordnance

Foreign Military Sale 53,221,133 Large aircraft infrared countermeasure system

Foreign Military Sale 64,130,598 Torpedoes

Foreign Military Sale 1,519,162,839 Aircraft and support

Total for Defence Materiel Organisation 1,878,450,852

Total for Defence 1,918,409,770

Notes

1. Contract template did not provide for access specific to audit purposes and was not manually adjusted.

2. Purchase of goods under MOU with an overseas agency that does not contain an ANAO access clause. 3. The statement, relating to templates, at the top of this disclosur e only applies to the long-form contracts.

4. Purpose extracted from AusT ender description.

5. Vendor controlled contract.

6. DVA Standing Offer panel deed did not include access provision and was not manually adjusted.

7. ASDEFCON contract template did not provide for access specific to audit purposes and was not manually adjusted.

Table B.3 (continued)

B APP

DEFENCE ANNUAL REPORT 2013-14 175

CONSULTANCIES AND CONTRACTS

Advertising and market research

During 2013-14, Universal McCann Australia conducted the following advertising campaigns: Planning and placement of campaign advertising for Defence Force recruiting including dissemination and other fees; International Fleet Review; and Naval Heritage Collection. Further information on the advertising campaigns is available at www.defence.gov.au/Publications and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available at www.finance.gov.au/advertising/index.html.

Table B.4: Total advertising and market research expenditure, by type of agency

Type 2011-12 ($) 2012-13 ($) 2013-14 ($)

Advertising 15,471,366 11,229,656 12,436,522

Market research 1,196,990 1,260,844 2,189,402

Polling - - -

Direct mail - 11,754 22,633

Media advertising 26,491,700 21,907,228 46,929,604

Total 43,160,056 34,409,482 61,578,161

Table B.5: Total advertising and market research expenditure, by Group

Group 2011-12 ($) 2012-13 ($) 2013-14 ($)

Office of the Secretary and CDF 39,011 40,334 33,443

Navy 78,372 81,836 738,163[1]

Army 65,411 40,969 70,044

Air Force 174,617 147,617 265,158

Intelligence and Security Group 778,748 92,640 39,185

Chief Operating Officer 80,626 - 108,806

Defence Support and Reform Group 1,222,359 458,333 128,467

Chief Information Officer Group 373,904 315,766 323,995

Defence People Group 38,827,678 32,933,303 59,606,036[2]

Defence Science and Technology Organisation 62,618 25,985 23,068

Vice Chief of the Defence Force Group 917,068 228,675 204,036

Joint Operations Command - - -

Capability Development Group 22,251 - -

Chief Finance Officer Group 40,444 728[3] -

Defence Materiel Organisation 476,949 44,024 37,759

Total 43,160,056 34,409,482 61,578,161

Notes

5. Expenditure increased significantly in 2013-14 due to the International Fleet Review.

6. The change in expenditure in 2013-14 compared to 2011-12 and 2012-13 is primarily due to increased media advertising to enable Defence Force Recruiting to better compete in the Australian recruiting marketplace. The increased expenditure was funded by Defence internally.

7. The amount relates to recruitment advertising and was erroneously omitted in the Defence Annual Report 2012-13.

176 DEFENCE ANNUAL REPORT 2013-14

Details of the organisations paid are provided only for payments of more than $12,400 (including GST).

Table B.6: Total advertising and market research expenditure by Group

Group, type and company 2013-14 ($) Purpose

Navy

Advertising

Spatchurst Design Associates 13,710 Advertising on banners and panels—Naval Heritage Collection

Media advertising

Universal McCann Australia 663,901 Media advertising for International Fleet Review campaign and Naval Heritage Collection

George Patterson Y&R 33,869 Media advertising for International Fleet Review campaign

Air Force

Advertising

Adcorp Australia Pty Ltd 103,841 Centenary of Military Aviation advertising

Adcorp Australia Pty Ltd 45,968 Recruitment advertising

Media advertising

Last Minute Multimedia Pty Ltd 17,394 Royal Australian Air Force Museum advertising

Intelligence and Security

Advertising

Adcorp Australia Pty Ltd 18,861 Recruitment advertising

Chief Operating Officer

Advertising

Adcorp Australia Pty Ltd 108,806 Support to the operation of the Honours and Awards

Tribunal through advertisement of matters to be considered and recruitment of the Chair and Tribunal members

Defence Support and Reform Group

Media advertising

Adcorp Australia Pty Ltd 12,737 Range safety warning public notices

Chief Information Officer

Advertising

Sensis Pty Ltd 322,081 Defence directory listing in White Pages

Defence People

Advertising

George Patterson Y&R 4,576,916 ADF recruitment advertising

Young & Rubicom Brands 2,999,709 ADF recruitment advertising

Havas Worldwide Australia Pty Ltd 1,765,519 ADF recruitment advertising

Australian Public Service Commission 89,063 APS recruitment

B APP

DEFENCE ANNUAL REPORT 2013-14 177

CONSULTANCIES AND CONTRACTS

Group, type and company 2013-14 ($) Purpose

Market research

GfK Australia Pty Ltd 665,353 Qualitative and quantitative research to maximise

ADF recruitment targets

Open Mind/Hall & Partners 773,305 Qualitative and quantitative research to maximise

ADF recruitment targets

Horizon Research 582,569 Qualitative and quantitative research to maximise

ADF recruitment targets

Media advertising

Universal McCann Australia 38,444,900 Planning and placement of campaign advertising including dissemination and other fees

Adcorp Australia Pty Ltd 7,522,105 Planning and placement of non-campaign advertising

Defence Science and Technology Organisation

Advertising

Adcorp Australia Pty Ltd 14,141 Capability and Technology Demonstrator Program

Vice Chief of the Defence Force Group

Advertising

Adcorp Australia Pty Ltd 20,518 Non-campaign ad placement (Live Firing Range Notices)

Adcorp Australia Pty Ltd 15,344 Recruitment advertising (civilian)

Market research

Newspoll 54,225 Employer research to measure the level of awareness

among employers of Reserves and Reserve Service

Newspoll 99,100 Reserve research on attitude of Reservists and their

employers

University of Melbourne 14,850 Market research for the development of the Australian

Defence Force Cadets Youth Development Framework

Defence Materiel Organisation

Advertising

Adcorp Australia Pty Ltd 16,132 Promote conferences

Adcorp Australia Pty Ltd 14,224 Recruitment advertising

Table B.6 (continued)

178 DEFENCE ANNUAL REPORT 2013-14

Legal expenses—Defence Expenditure on internal and external legal services in 2013-14 is shown in tables B.7 to B.9. Internal expenses include salaries for military and civilian staff, divisional operating costs and military justice reimbursements. External expenses are professional fees, disbursements and legal assistance at Commonwealth expense. All figures are GST inclusive.

Table B.7: Estimated expenditure on internal and external legal services, 2012-13 and 2013-14

Type of legal expenditure

2012-13 $m

2013-14 $m

Internal 41.3 41.8

External 22.2 21.3

Total 63.5 63.1

Table B.8: Estimated cost breakdown of internal legal expenses, 2012-13 and 2013-14

Items

2012-13 $m

2013-14 $m

Salaries for military lawyers 16.3 18.5

Salaries for APS staff 13.8 13.3

ADF Reserve legal officers 7.6 6.8

Operating costs of the division 3.3 2.9

Military justice disbursements 0.3 0.3

Total 41.3 41.8

Table B.9: Estimated cost breakdown of external legal expenses, 2012-13 and 2013-14

Items

2012-13 $m

2013-14 $m

Professional fees—Defence legal panel 20.3 19.7

Disbursements 1.6 1.6

Legal assistance at Commonwealth expense 0.3 0.0

Total 22.2 21.3

B APP

DEFENCE ANNUAL REPORT 2013-14 179

CONSULTANCIES AND CONTRACTS

Legal expenses—Defence Materiel Organisation DMO expenditure on internal and external legal services is shown in tables B.10 to B.12. Internal expenditure includes salaries for civilian staff and operating costs that are directly related to the provision of legal services by DMO. External expenditure includes professional fees, disbursements and other legal expenditure incurred principally through the Strategic Commercial Legal Panel.

Table B.10: Estimated expenditure on internal and external legal services, 2012-13 and 2013-14

Type of legal expenditure

2012-13 $m

2013-14 $m

Internal 3.5 3.1

External 11.7 11.0

Total 15.2 14.1

Table B.11: Estimated cost breakdown of internal legal expenses, 2012-13 and 2013-14

Items

2012-13 $m

2013-14 $m

Salaried legal staff costs 3.2 3.0

Operating costs attributable to legal services 0.3 0.2

Total 3.5 3.2

Table B.12: Expenditure external legal services, 2012-13 and 2013-14

Items

2012-13 $m

2013-14 $m

Professional fees—Defence legal panel 12.9 11.0

Professional fees—Attorney-General’s Department - -

Legal expenditure—other 1.0 -

Payments pursuant to licence arrangements with collecting societies - -

Total 13.9 11.0

180 DEFENCE ANNUAL REPORT 2013-14

APPENDIX C Grants and payments

List and description of grants

Defence

Information on grants awarded by the Department of Defence during the period 1 July 2013 to 30 June 2014 is available at www.defence.gov.au/Publications.

Table C.1: Grants paid, 2012-13 and 2013-14

2012-13 Actual[1] $’000

2013-14 Actual[1] $’000

Grants program

Army Military History Research Grants Scheme 82 52

Family Support Funding Program 1,278 1,304

Other grants

Afghan National Army Trust Fund Contribution 38,700 42,808

Australia - Canada Security Cooperation Project - 18

Australian Member Committee of the Council for Security Cooperation in the Asia-Pacific (multi-year grant) 52 55

Australian National University—Shedden Professor of Strategic Policy Studies position (multi-year grant) - 238

Australian National University Centre for Nuclear Non-proliferation and Disarmament 400 -

Australian National University National Centre for Indigenous Studies 300 -

Australian Strategic Policy Institute (multi-year grant) 3,118 3,196

Australian Strategic Policy Institute Australia - Africa Diaolgue, July 2013 - 18

Fisher House Foundation (multi-year grant) 25 25

International Institute for Strategic Studies 84 89

Kokoda Foundation 100 160

Multinational Force and Observers (multi-year grant) 494 558

NSW National Parks and Wildlife Service, Office of Environment and Heritage 525 -

Professor Jeffrey Grey—University College, ADFA (multi-year grant) 200 -

Professor Peter Stanley of the University of New South Wales—Indians and Anzacs on Gallipoli Project - 18

Royal United Services Institute of Australia (multi-year grant) 95 97

Sir Arthur Tagne Defence PhD Scholarships (multi-year grant) 58 -

Strategic and Defence Centre Post Doctoral Fellowship (multi-year grant) 174 64

C APP

DEFENCE ANNUAL REPORT 2013-14 181

GRANTS AND PAYMENTS

2012-13 Actual[1] $’000

2013-14 Actual[1] $’000

The Sir Richard Williams Foundation 50 50

United Nations—Peace Operations Training Institute e-Learning for African Peace Keepers - 43

United Nations Trust Fund in Support of the African-led International Support Mission in Mali 5,000 -

Yakanarra Community School - 3

Total grants paid 50,736[2] 48,796[2]

Notes

8. All figures are exclusive of GST.

9. Total may not add due to rounding.

Defence Materiel Organisation

Information on recipients of discretionary grants provided by the DMO during the period 1 July 2013 to 30 June 2014 is available online for the Skilling Australia’s Defence Industry Program, the Industry Skilling Enhancement package, the Priority Industry Capability Innovation Program and the New Air Combat Capability - Industry Support Program. In 2013-14, more than 140 grants were awarded with a total value of around $14.3 million (GST inclusive).

Payment of accounts In 2013-14, Defence paid 1,736,673 or 99.4 per cent of all payment transactions by their due date. This result is ahead of the 90 per cent government benchmark. The volume of payments through Defence Purchase and Travel Cards represents more than 80 per cent (2012-13, 79 per cent) of all payments, which continues to have a positive effect on the paid-by-due-date result.

Table C.2: Accounts paid by due date, 2011-12 to 2013-14

2011-12 2012-13 2013-14

Number of accounts paid 2,269,781 1,694,617 1,748,114

Accounts paid by due date 2,160,900 1,675,847 1,736,673

Percentage of accounts paid by due date 95.2 98.9 99.4

Tactical payment scheme The tactical payment scheme was legislated on 1 July 2009 under sections 123H and J of the Defence Act 1903.

The scheme was introduced in 2009-10 to provide a means for making expeditious non-liability payments resulting from military actions by deployed forces. This scheme continues to provide mechanisms for maintaining local community support and thereby contributing to the safety of deployed forces.

In 2013-14, 67 individual payments totalling $16,034.64 were made under the scheme. Further information is outlined in Note 36 of the Defence financial statements in Volume Two of this report.

Table C.1 (continued)

182 DEFENCE ANNUAL REPORT 2013-14

APPENDIX D List of requirements

Part of report Description Requirement Page

Letter of transmittal Mandatory iii

Table of contents Mandatory v

Index Mandatory 186

Glossary [acronyms and abbreviations] Mandatory 185

Contact officer(s) Mandatory 194

Internet home page address and Internet address for report Mandatory 194

Defence overview

Review by Secretary

Review by departmental secretary Mandatory 2-3

Summary of significant issues and developments Suggested 2-3, 4-5

Overview of department’s performance and financial results Suggested 13

Outlook for following year Suggested 7-8

Significant issues and developments—portfolio Portfolio departments— suggested

2-3, 4-5, 7-8

Departmental overview

Role and functions Mandatory 7

Organisational structure Mandatory 9-10

Outcome and program structure Mandatory Foldout,

inside back cover

Where outcome and program structure differs from PB Statements/PAES or other portfolio statements accompanying any other additional appropriation bills (other portfolio statements), details of variation and reasons for change

Mandatory N/A

Portfolio structure Portfolio

departments— mandatory

9

Performance

Review of performance during the year in relation to programs and contribution to outcomes Mandatory 22-109

Actual performance in relation to deliverables and KPIs set out in PB Statements/PAES or other portfolio statements Mandatory 22-109

Where performance targets differ from the PBS/PAES, details of both former and new targets, and reasons for the change

Mandatory N/A

Narrative discussion and analysis of performance Mandatory 22-109

Trend information Mandatory 22-109

D APP

DEFENCE ANNUAL REPORT 2013-14 183

LISTS OF REQUIREMENTS

Part of report Description Requirement Page

Significant changes in nature of principal functions/services Suggested N/A

Performance of purchaser/provider arrangements If applicable, suggested 164-6

Factors, events or trends influencing departmental performance Suggested 22-109

Contribution of risk management in achieving objectives Suggested 22-109

Performance against service charter customer service standards, complaints data, and the department’s response to complaints

If applicable, mandatory

113, 139-40, 144-5

Discussion and analysis of the department’s financial performance Mandatory 13, 22-109

Discussion of any significant changes in financial results from the prior year, from budget or anticipated to have a significant impact on future operations

Mandatory 13, 22-109

Agency resource statement and summary resource tables by outcomes Mandatory 13-15, 23-5,

77, 83, 90-1

Management and accountability

Corporate governance

Agency heads are required to certify that their agency complies with the Commonwealth Fraud Control Guidelines Mandatory iii

Statement of the main corporate governance practices in place Mandatory 108, 153

Names of the senior executive and their responsibilities Suggested 22-109

Senior management committees and their roles Suggested 199, 153

Corporate and operational plans and associated performance reporting and review Suggested 3, 7-8

Internal audit arrangements including approach adopted to identifying areas of significant financial or operational risk and arrangements to manage those risks

Suggested 154

Policy and practices on the establishment and maintenance of appropriate ethical standards Suggested 153

How nature and amount of remuneration for SES officers is determined Suggested 134-8

External scrutiny

Significant developments in external scrutiny Mandatory 158-63

Judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner Mandatory 160

Reports by the Auditor-General, a parliamentary committee, the Commonwealth Ombudsman or an agency capability review

Mandatory 161-2

Management of human resources

Assessment of effectiveness in managing and developing human resources to achieve departmental objectives Mandatory 115, 118, 120,

122, 124-5, 127

Workforce planning, staff retention and turnover Suggested 128-33

Impact and features of enterprise or collective agreements, individual flexibility arrangements (IFAs), determinations, common law contracts and Australian Workplace Agreements (AWAs)

Suggested 134-8

184 DEFENCE ANNUAL REPORT 2013-14

Part of report Description Requirement Page

Training and development undertaken and its impact Suggested 138

Work health and safety performance Suggested 142-5

Productivity gains Suggested 138

Statistics on staffing Mandatory 16-17,

146-52

Enterprise or collective agreements, IFAs, determinations, common law contracts and AWAs Mandatory 134-8

Performance pay Mandatory 138

Assets management

Assessment of effectiveness of assets management If applicable, mandatory 164-6

Purchasing Assessment of purchasing against core policies and principles Mandatory 164-6

Consultants The annual report must include a summary statement detailing the number of new consultancy services contracts let during the year; the total actual expenditure on all new consultancy contracts let during the year (inclusive of GST); the number of ongoing consultancy contracts that were active in the reporting year; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST). The annual report must include a statement noting that information on contracts and consultancies is available through the AusTender website

Mandatory 171-2,

178-9

Australian National Audit Office Access Clauses

Absence of provisions in contracts allowing access by the Auditor-General Mandatory 172-4

Exempt contracts Contracts exempted from publication in AusTender Mandatory 172

Financial statements Mandatory Volume Two

Other mandatory information

Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011) Mandatory 142-5

Advertising and market research (section 311A of the Commonwealth Electoral Act 1918) and statement on advertising campaigns

Mandatory 175-7

Ecologically sustainable development and environmental performance (section 516A of the Environment Protection and Biodiversity Conservation Act 1999)

Mandatory 168-70

Compliance with the agency’s obligations under the Carer Recognition Act 2010 If applicable, mandatory

N/A

Grant programs Mandatory 180-1

Disability reporting—explicit and transparent reference to agency-level information available through other reporting mechanisms

Mandatory 120

Information Publication Scheme statement Mandatory 162

Correction of material errors in previous annual report If applicable, mandatory N/A

Agency resource statements and resources for outcomes Mandatory 13-15, 23-5, 77, 83, 90-1

List of requirements Mandatory 182-4

DEFENCE ANNUAL REPORT 2013-14 185

Acronyms and abbreviations Section 5(1)(c) of Attachment A of the Requirements for annual reports for departments, agencies and FMA Act bodies (May 2014) states that an annual report must contain ‘a glossary to make clear the meanings of any abbreviations and acronyms used’. This list of abbreviations and acronyms fulfils that requirement.

ADF Australian Defence Force

ADFA Australian Defence Force Academy

AGO Australian Geospatial-Intelligence Organisation

ANAO Australian National Audit Office

APS Australian Public Service

ASD Australian Signals Directorate

CDF Chief of the Defence Force

CEO Chief Executive Officer

COI commission of inquiry

COO Chief Operating Officer

DCP Defence Capability Plan

DMO Defence Materiel Organisation

DSA Defence Security Authority

DSTO Defence Science and Technology Organisation

DVA Department of Veterans’ Af fairs

FOI freedom of information

HMAS Her Majesty’s Australian Ship

ICT information and communications technology

IGADF Inspector-General of the Australian Defence For ce

LAN local area network

LGBTI lesbian, gay, bisexual, transgender and intersex

LHD landing helicopter dock

MG Medal for Gallantry (honorific)

MRH multi-role helicopter

NAIDOC National Aborigines and Islanders Day Observance Committee

NATO North Atlantic Tr eaty Organization

OPA Official Public Account

OSCDF Office of the Secretary and the Chief of the Defence For ce

RAAF Royal Australian Air Force

RAN Royal Australian Navy

SeMPRO Sexual Misconduct Prevention and Response Office

SES Senior Executive Service

URD Unit Ready Days

VCDF Vice Chief of the Defence For ce

WHS work health and safety

186 DEFENCE ANNUAL REPORT 2013-14

Index Aboriginal and Torres Strait Islander people, 118, 119, 131 Aces North, 38 ADF Reserves, 130, 132 Administrative Appeals Tribunal, 74 advertising expenditure, 175-7 Afghan National Army, 6, 12, 81 Afghan National Security Forces, 12 Afghanistan

ADF’s role in, 12, 81 awards, iv drawdown, 12, 38 inquiry officer inquiry process, 157 multinational base Tarin Kot, 12, 38, 168 Operation Slipper, 12, 81 Train-Advise-Assist Mission of Resolute Support, 12 troops killed in action, iv, 157 Air Force

achievements, 38 average funded strength, 128 Chief of Air Force, responsibilities, 38 deliverables, 39-40 exercise and training schedule, 38 F-35A Lightning II Joint Strike Fighter, 38, 68, 92

training, 41 flying hours, 39 future capability, 38 gender restrictions, removal, 124-5 key performance indicators, 40 member numbers, 16, 146 Typhoon Haiyan response, 80 women, 125 Air Force Act 1923, 9 Air Warfare Destroyer (SEA 4000 Phase 3), 96, 109, 161 Al Minhad airbase, United Arab Emirates, 12 Alcohol Management Strategy and Plan 2014-17, 54, 112, 126 AP-3C Orion aircraft (AIR 5276 Phase 8B), 109 Approved Major Capital Investment Program, 49, 167 APS Statistical Bulletin, 120 Armidale class patrol boats, 29, 30, 31, 58, 106 Army

achievements, 33 Amphibious Pre-deployment Training Program, 33 Army Indigenous Strategy, 33 average funded strength, 128 awards and battle honours, iv Chief of Army, responsibilities, 33 deliverables, 34-5 equipment delivery, 33 gender restrictions, removal, 124-5 key performance indicators, 35 killed in action, iv members

numbers, 16, 146 profile, 36-7 objectives, 33 rate of effort (flying hours), 35 Typhoon Haiyan response, 80 women, 33, 125 Army Indigenous Strategy, 33

AS/NZS ISO 9001:2008 international quality management standard, 169 asset management, 164, 165 Assistant Minister for Defence, 8, 107 Audit and Fraud Control Division, 26 Audit Branch, 154 Audit Work Program, 154 Auditor-General, 172

reports, 161-2 audits independent, 109

performance audit, 154 AusTender, contracts exempt, 172 Australian Accounting Standards, 164 Australian Centre for Posttraumatic Mental Health, University of

Melbourne, 143

Australian Civil-Military Centre, 60, 61, 62 Australian Defence: Report on the Reorganisation of the Defence Group of Departments (Tange Report), 11 Australian Defence Credit Union, 74 Australian Defence Force Academy

treatment of women, 113 Australian Defence Force (ADF). see also Reserves actual funded strength, 16

Alcohol Management Strategy and Plan 2014-17, 54, 60, 112, 126 Cadet Scheme, 60, 62 ceremonial activities, 60 combat roles, 124 complaint handling and resolution, 46, 139-40 conditions of service, 134, 138, 139 cultural change (Pathway to Change), 33, 44, 55, 56, 60,

112-13, 124, 125, 156 deaths, commissions of inquiry into, 156-7 emergency assistance, 38, 83, 161 enlistment, 128 Federation Guard, 60 female participation rate, 54, 122 gender restrictions, removal, 124-5 Joint Health Command, 33, 62, 104, 143 leadership team, 5 members

awarded honours, iv housing assistance response, 74 killed in action, iv on operations overseas 2013-14, 4 mental health care, 18-19, 143 military justice performance audits, 155, 156 mission, 7 operations 2013-14, 4 (see also under individual names of

operations) border protection, 29, 31 emergency assistance, 38, 79, 80 overseas, 12, 79, 81 personnel deployed, 4 Parliamentary Program, 60 remuneration, 134-5 salary ranges (permanent members), 134-5 Senior Officer Remuneration Arrangement 2011-14, 138

DEFENCE ANNUAL REPORT 2013-14 187

INDEX

separations, 128-30 sexual misconduct reporting, 113 staffing figures, 127 star-ranked officers, 151 Typhoon Haiyan response, 79, 80 United Nations missions, 81, 82 women and cultural reform, 124 workforce

actual funded strength, 16, 127 average funded strength, 127, 128 gender, 54, 122, 146 growth, 16, 128 headcount, 147 location, 150 permanent strength, 16, 128, 146, 148 Reserves, 132, 149 staffing figures, 127 star-ranked officers, 151 total, 146 workplace agreements and arrangements, 135, 138 Workplace Remuneration Arrangement 2011-2014, 134 Australian Disability Enterprises, 120 Australian Drug Foundation, 126 Australian Geospatial-Intelligence Organisation, 42, 65 Australian Government Information Security Manual, 42 Australian Government Security Vetting Agency, 42, 43, 155 Australian Human Rights Commission, 113, 156

2014 audit report, 124 Australian Light Armoured Vehicle Multi Spectral Surveillance Suite, 33 Australian Military Sales Office, 87 Australian National Audit Office, 154

access clauses, 172-3 performance audits, 154 review of the Air Warfare Destroyer project, 109 Australian Public Service (APS) Code of Conduct, 7 complaint handling and resolution, 139 Core Capability Framework, 54, 138 disability initiatives, 120 education and training, 138 employees

management and development, 138 non-SES, 136, 138 employment agreements, 136, 138 female participation rate, 122 Indigenous Pathways program, 118 Job Families Project, 54, 138, 139 Leadership and Core Skills Strategy, 138 performance pay, 138 productivity gains, 138 RecruitAbility scheme, 120 recruitment, 133 remuneration, 136-8 Review of employment pathways for APS women in the

Department of Defence, 122 reviews of actions, applications, 140 salary arrangements, 136, 137 salary ranges, 137 Senior Executive Service

employment arrangements, 137, 138 numbers, 151

performance pay, 138 salary rates, 136, 137 separations, 133 State of the Service Report, 120 Values, 7 women Building Confidence program, 122 employment pathways, 114, 122 participation rate, 122 workforce actual full-time equivalent, 16, 127 average strength, 127, 132-3 gender, 122, 146, 148, 149 headcount, 16, 146 location, 150 ongoing and non-ongoing, 149 overview, 16 reduction, 16 SES, 151 Australian Public Service Commission, 138 Australian Radiation Protection and Nuclear Safety Agency,

161, 162

Australian Regular Army. see Army Australian Signals Directorate, 42, 52 Australian Workplace Equality Index, 120

Barry Thomas Blunden v Commonwealth of Australia [2014] ACTSC 123, 160 Border Protection Command, 63, 84

C-130J aircraft, 38 C-17A aircraft, 38 Cadet Scheme, 60 Canberra, HMAS, 119 Canberra class vessels, 166 Capability and Technology Demonstrator Program, 58 Capability Development Group, 68-70 Capital Facilities Program, 167 cases

Barry Thomas Blunden v Commonwealth of Australia [2014] ACTSC 123, 160 Danthanarayana and Another v Commonwealth of Australia & Ors [2014] FCA 552, 160 Li v Chief of Army [2013] HCA 49, 160 centenary, RAN fleet’s first arrival, Sydney Harbour, 29, 32,

117, 175

Centralised Processing Project to Defence, 51 Centre of Diversity Expertise, 115, 121 ceremonial activities (ADF), 60 Chief Audit Executive, 155 Chief Capability Development, 5, 68 Chief Executive Instructions, 70, 165 Chief Executive Officer (DMO). see Defence Materiel

Organisation

Chief Finance Officer Group achievements, 70 Defence Asset Accounting, 164 Defence Deregulation Unit, 72 deliverables, 72 key performance indicators, 72 staff member profile, 71

188 DEFENCE ANNUAL REPORT 2013-14

Chief Information Officer Group (Program 1.7) achievements, 51 Defence Single Information Environment, 51 deliverables, 52 funding from Approved Major Capital Investment Program, 167 ICT consolidation, 51 joint mentoring program, 51 key performance indicators, 52 payroll, 51

Chief of Air Force, 5, 38 Chief of Army, 5, 33 Chief of Joint Operations, 5 Chief of Navy, 5, 29 Chief of the Defence Force

appointment, 26 commissions of inquiry, 156-7 former, 65 inquiry officer inquiries, 157 outgoing, 6 review, 5 Chief Operating Officer. see also Chief Information Officer;

Defence Support and Reform achievements, 45 Associate Secretary and Chief Operating Officer, 44 deliverables, 44 key performance indicators, 44 overview, 44 strategic reform oversight, 112 Chief Technology Officer, 53 civilian (APS and contractor) average full-time equivalent, 132 Code of Conduct (APS), 7 Coles report, 106 Collins submarines, 58, 98, 106 Combined Maritime Force (Middle East Area of Operations), 81 Combined Task Force 150 (maritime counter-terrorism), 81 Comcare, 75, 86, 142, 144 commissions of inquiry (CDF), 156-7 Commonwealth Disability Strategy, 120 Commonwealth Fraud and Anti-Corruption Centre, 153 Commonwealth Ombudsman, 154, 162 Commonwealth Procurement Rules, 164, 166, 171 Commonwealth Resource Management Framework, 164 complaint handling and resolution, 139-40

unacceptable behaviour, 141 ComSuper, 73 ComTrack, 141 consultancies, 171-2 contracted personnel, 17 contracts

AusTender exempt, 172 no ANAO access clause, 172-4 corporate goverance, 153-7 Counter Improvised Explosive Device Task Force, 60 cultural reform (Pathway to Change), 33, 44, 55, 56, 60, 124,

125, 156

achievements, 112-13 Cyber Security Operations Centre, 42 cyber security threat, 42, 58

Danthanarayana and Another v Commonwealth of Australia & Ors [2014] FCA 552, 160 Defence. see also Australian Defence Force; Australian Public Service; Defence Housing Australia; Defence Materiel

Organisation; Department of Veterans’ Affairs advertising and market research, 175-7 Annual Plan, 44, 49, 55, 56, 112 asset management, 164, 165 capital investment programs, 167 consultancies and contracts, 171-7 Corporate Plan 2012-17, 44, 49 cultural reform, 112-13 cultural understanding, 117 cyber capability, 42 diversity of personnel, 115, 118, 120, 122-5

statistics, 115-16 ecologically sustainable development, 168 environmental performance, 168-70 external scrutiny, 158-63 families support, 152 fraud control, 153-4 grants, 180-1 history, 11 Indigenous participation and engagement, 118, 119 leadership, 9 legal expenses, 178 LGBTI members and employees, 115, 120 materiel acquisition agreements, 85, 93, 98, 167 materiel sustainment agreements, 85, 99, 101, 106 organisational structure, 9-10 outcome and program structure (see inside back

cover foldout)

parliamentary contribution, 158 payment of accounts, 181 payroll, 51 people with disability, 120, 121 personnel

complaint handling and resolution, 139-40 unacceptable behaviour, 141 portfolio structure, 9 principal civilian adviser, 26 referrals under Environment Protection and Biodiversity

Act 1999, 168-9

remuneration, 134 resource statement, 15 resource summary, 13-15 role, 7 senior committees, 153 senior leadership changes, 8 sexual misconduct reporting, 54, 112, 113, 141 statutory offices, 9 strategic direction, 7-8 Strategic Reform Program, 47, 112 values, 7 vetting practices, 42, 43, 155 women, initiatives for, 122 work health and safety (see work health and safety) workforce (see workforce) workplace arrangements, 135, 138 YourSay survey, 113 Defence Abuse Response Taskforce, 46, 55, 56, 156 Defence Act 1903, 7, 9, 47, 134, 155, 181

DEFENCE ANNUAL REPORT 2013-14 189

INDEX

Defence Annual Procurement Plan, 165 Defence Annual Report 2012-13, 122 Defence APS Standard Classification of Occupation codes, 139 Defence Asset Accounting, 164 Defence Audit and Risk Committee, 154 Defence Bank, 74 Defence Capability Plan, 8, 52, 58, 59, 68, 128, 167 Defence Chief Audit Executive, 155 Defence Civilian Committee, 120, 122 Defence Committee, 112, 139, 154 Defence Community Organisation, 152 Defence Complaints Management, Tracking and Reporting

System (ComTrack), 141 Defence Cooperation Program, 27, 28 Defence Corporate Plan 2012-17, 44, 49 Defence Deregulation Action Network, 72 Defence Employment Offer, 54, 130, 134 Defence Enterprise Collective Agreement, 136, 138 Defence Environmental Clearance Certificate, 169 Defence Environmental Management Forum, 170 Defence Environmental Management System, 169 Defence Environmental Strategic Plan 2010-14, 169 Defence Estate Quality Management System, 169 Defence Family Helpline, 152 Defence Force Credit Union. see Defence Bank Defence Force Discipline Act 1982, 9, 47, 153, 160 Defence Force Regulations 1952, 47, 139 Defence Force Remuneration Tribunal, 134, 138 Defence Force Reorganisation Act 1975, 11 Defence Force Retirement and Death Benefits Scheme, 73 Defence Force Retirement Benefits, 73 Defence Force Superannuation Benefits, 73 Defence Force Superannuation Nominal Interest, 73 Defence Gender Equality and Diversity Council, 115 Defence Home Owner Assistance Scheme, 74-5 Defence Home Owner Scheme, 74 Defence Housing Australia, 75 Defence Imagery and Geospatial Organisation. see Australian

Geospatial-Intelligence Organisation Defence Indigenous Employment Strategy 2012-2017, 118 Defence Industry Policy Statement, 8 Defence Innovation Realisation Fund, 58, 68 Defence (Inquiry) Regulations 1985, 155 Defence Intellectual Disability Employment Initiative, 120 Defence Intelligence Organisation, 42 Defence Legal Division, 44 Defence Materiel Organisation (DMO)

accountability, 108 appropriations, 91 Approved Major Capital Investment Program, 167 APS employee numbers, 17, 146 assets management, 164, 165 Australian Military Sales Office, 87 budget, 89, 91 change priorities, 85 Chief Executive Officer

accountability to minister, 87, 108 review, 85-6 role, 108 Commercial Group, 165 committee structure, 108 Contracting and Legal Division, 165, 166

contracting policy and practice, 166 Council of Chairs’ Forum, 108 Diversity Advisory Group, 86 DMOSAFE, 86 Environmental Management System, 170 Executive, 87 Executive Committee, 108 expenditure, 85 financial performance, 89 functions, 87, 107 gate reviews, 87 governance, 108 grants, 181 hazardous chemical management, 86 industry support programs budget, 85 legal advice, 165-6 legal expenses, 179 Management of Capability Acquisition (Program 1.1)

deliverables, 93-8 expenditure, 93 key performance indicators, 98 overview, 93 Management of Capability Sustainment (Program 1.2)

deliverables, 99-106 expenses, 99 key performance indicators, 106 objective, 99 product support, 99 materiel acquisition agreements, 85, 93, 98, 167 Materiel Audit and Risk Committee, 108 materiel sustainment agreements, 85, 99, 101, 106 Ministerial Directive 28/7/2008, 108 ministerial support, 107 Negotiation Cell, 88 organisational structure, 87 outcome, expenses and resources, 91 outcome and program structure, 93 performance, audit reports, 154 Performance Based Contracting Centre of Excellence, 166 Portfolio Budget Statements, 89 procurement policy and practice, 165 projects of concern, 109 Provision of Policy Advice and Management Services

(Program 1.3) deliverables, 107 expenditure, 107 ministerial support, 107 objective, 107 purchaser-provider model, 85 reform priorities, 88 resource statement 2013-14, 90 risk management, 108, 170 role, 87, 88 senior committees, 108-9 Strategic Framework 2013-15, 85 total net resourcing 2013-14, 89 Work Health and Safety Assurance program, 86 Defence People Group (Program 1.8), 44

cultural reform objectives, 54 Defence APS employees initiatives, 54, 139 deliverables, 55

190 DEFENCE ANNUAL REPORT 2013-14

Deputy Secretary Defence People, 54 performance indicators, 56 Defence Portfolio Deregulation Forward Work Program, 72 Defence Procurement Policy Manual, 165 Defence Re-Thinking Review, 156 Defence Science and Technology Organisation Capability and Technology Demonstrator Program, 58 Chief Defence Scientist, 58 Collins class submarines remedial program, 58 Defence Innovation Realisation Fund, 58 Defence Science Partnerships, 58 deliverables, 59 highlights, 58 key performance indicators, 59 MH370 search, 65, 66-7 operations analysts, 58 Physical Employment Standards, 122, 125 soldier protection technology, 58 Strategic Research Investment program, 58 technical risk advice, 58 whole-of-government framework, 58 Defence Science Partnerships, 58 Defence Secret and Restricted Networks, 51, 52 Defence Security Authority, 42, 43, 155 Defence Signals Directorate. see Australian Signals Directorate Defence Single Information Environment, 51 Defence Support and Reform Group, 44 accommodation services for US Marines, 46 Defence Legal Division, 44 deliverables, 47-9 Deputy Secretary, 46 funding from Approved Major Capital Investment Program, 167 garrison and base support, 46 key performance indicators, 50 legal services, 46 payroll processing, 51 procurement shared service (non-materiel), 165 reform activities, 46 Reform and Corporate Services Division, 44 responsibilities, 46 travel reform, 46 Defence Whistleblower Scheme, 154-5 Defence White Paper 2009, 128 2013, 49 2015, 2-3, 5, 7-8, 26, 27, 49, 54, 85 Defence Work Health and Safety Management System, 142 Defence Work Health and Safety Strategy 2012-2017, 142 Department of Defence. see Defence Department of the Environment, 170 Department of Veterans’ Affairs, 8, 19, 55, 74 housing scheme MOU, 74 Mental Health Clinical Reference Group, 143 deregulation, 72 diarchy, 9, 11 Disability Employment Initiative, 120 disability reporting mechanisms, 120 Diversity and Inclusion Strategy Implementation Plan, 115 DLA Piper Report, 156 Duntroon Community Centre, Canberra, 152 East Coast Air Defence Exercise, 38 emergency assistance, 38, 79, 80, 83, 161

Emergency Management Australia, 83 Employee Self-Service in PMKeyS, 139 Environmental Manual, 169 environmental performance

Defence, 168-70 DMO, 170 Environment Protection and Biodiversity Conservation Act 1999, 168, 169

Ethics and Fraud Awareness program, 153 Exercise Talisman Sabre 13, 33, 168

F/A-18F Super Hornet aircraft, 38, 40, 98, 99, 100 Fair Work Act 2009, 136 Federation Guard, 60 Financial Management and Accountability Act 1997, 42, 70,

87, 108, 161, 165

Financial Management and Accountability Regulations 1997, 161 financial statements. see Volume Two First Principles Review, 3, 8, 49, 85 flight MH370, 2, 6, 38, 42, 65-7 Force Structure Review, 3, 8, 54, 85 Foreign Language Directive, 42 fraud

control program, 153 investigations, 153 loss and recoveries, 153-4 Freedom of Information Act 1982, 162, 163, 172 freedom of information, 162-3 Fuel Services Branch, 60 Future Frigate (SEA 5000 Phase 1), 68 Future Submarine Program, 98

Gender Equality and Diversity Council, 115 global operations, 5 Global Summit to End Sexual Violence in Conflict, 2014, 123 government’s strategic direction. see Defence White Paper grants and payments, 180-1

Hamilton review of alcohol use, 126 hazardous chemicals management, 142 heritage management, 169 housing. see Defence Home Owner Assistance Scheme Housing Assistance, 74-5 Hydroscheme 2013-2016, 29, 31

ICT Shared Services Program, 51 illegal immigration, 84 Immigration and Border Protection portfolio, 63 Indigenous Employment Strategy 2012-2017, 118 Indigenous-owned enterprise, 166 Indigenous Performance Group, Bungaree, 32 Indigenous Pre-Recruitment Course, 131 Industry Skilling Enhancement package, 181 Information Publication Scheme, 47, 162 Information Security Manual, 42 inquiry officer inquiries (CDF), 157 Inspector-General of Intelligence and Security, 42, 155 Inspector-General of the Australian Defence Force

report, 155-6 whistleblower allegations, 154-5

DEFENCE ANNUAL REPORT 2013-14 191

INDEX

Intelligence and Security Group deliverables, 43 Deputy Secretary Intelligence and Security, 43 Intelligence and Security Development Program, 42 international relationships, 42 joint mentoring program, 51 key performance indicators, 43 reform program, 155

Intelligence Services Act 2001, 42 internal audit services, 154 International Fleet Review, 29, 32, 117, 175 International Policy Division, 26, 28, 62 International Security Assistance Force (NATO), 12, 81

Japan, bilateral and trilateral cooperation, 4 Jindalee Operational Radar Network, 58, 101 Job Families Project, 54, 138, 139 Joint Capability Coordination, 60, 61, 62 Joint Health Command, 33, 62, 104, 143 Joint Logistics Command, 170 Joint Operations Command Group

activities, 63 Border Protection Command program, 63, 84 deliverables, 64 Joint Task Force 658, 65 key performance indicators, 64 responsibilities, 63 Joint Parliamentary Committee on Intelligence and Security, 158 Joint Standing Committee on Foreign Affairs, Defence

and Trade, 158

Joint Standing Committee on Treaties, 159 Joint Strike Fighter, 38, 41, 68, 92 Joint Task Force 633 (Afghanistan), 28, 81, 168 judicial decisions, 160

legal expenses, 178 legal support, 44, 46 LGBTI members and employees, 115, 120 Li v Chief of Army [2013] HCA 49, 160 The Long Way Home (play), 18-19

Malaysia Airlines flight MH370, 2, 6, 38, 42, 65-7 Maritime Operational Support Capability (SEA 1654 Phase 3), 68 maritime surveillance projects, 68 market research expenditure, 175-7 Marrangaroo Training Area, 157 materiel acquisition agreements, 85, 93, 98, 167 materiel sustainment agreements, 85, 99, 101, 106 Melbourne, HMAS/HMAS Voyager collision 1964, 160 memorandum of understanding, Department of Veterans’

Affairs, 74

mental health Centre for Mental Health, 143 rehabilitation through the arts, 18-19

military redress of grievance, 139-40 Military Superannuation and Benefits Scheme, 73 Minamata Convention on Mercury, 170 Minister for Defence, 8, 9, 11, 26, 47, 87, 92, 107, 112, 124, 134 Minister for Finance, 167 Minister for Veterans’ Affairs, 8 ministerial responsibilities, 8

multi-role helicopter (MRH-90), 29, 30, 31, 35, 95, 102, 103, 161 Muslim Australians, 117

National ADF Family Health Program, 60 National Armaments Director, 108 National Armaments Director for Australia, 108 National Australia Bank, 74 National Disability Strategy 2010-2020, 120 National Drug Strategy 2010-15, 126 National Security Committee of Cabinet, 167 national support tasks

border protection, 84 deliverables, 84 key performance indicators, 84 total resourcing, 83 NATO. see North Atlantic Treaty Organization natural disaster relief, Philippines, 38, 79, 80 Naval Defence Act 2010, 9 Navy

achievements, 29 activities, 29 Armidale class vessels, 29, 30, 31, 58, 106 average funded strength, 128 cadets, 117 Canberra class vessels, 166 ceremonial activities, 32 Chief of Navy, responsibilities, 29 cultural understanding, 117 deliverables, 30-1 gender restrictions, removal, 124-5 International Fleet Review, 29, 32, 117, 175 key performance indicators, 31 member numbers, 16, 146 Middle East Area of Operations, 81 Operation Resolute, 29, 31 role, 29 Typhoon Haiyan response, 80 women, 125 New Air Combat Capability—Industry Support Program, 95, 181 Next Generation Desktop project, 51, 52 North Atlantic Treaty Organization (NATO), iv, 81 Notification of Reasonable Adjustment Passport, 120

Ocean Shield, Australian Defence Vessel, 65, 66, 67, 105 Office of the Inspector-General of Intelligence and Security, 42 Office of the Secretary and CDF (Program 1.1) Audit and Fraud Control Division, 26

deliverables, 27 International Policy Division, 26, 28, 62 key performance indicators, 27 objective, 26 officer profile, 28 role, 26 Strategic Policy Division, 26, 62 Strategy Executive, 26 Official Public Account, 75, 89 Ombudsman Act 1976, 162 Operation Anode (Solomon Islands), 79 Operation Gateway (maritime surveillance patrols), 79 Operation Mazurka (Middle East), 81 Operation Philippines Assist, 38, 79, 80

192 DEFENCE ANNUAL REPORT 2013-14

Operation Resolute (border protection), 29, 31 Operation Riverbank (Iraq), 81 Operation Slipper (Afghanistan/Middle East), 12, 81 Operation Solania (maritime surveillance patrols), 79 operations, immediate neighbourhood. see also Papua New

Guinea; Solomon Islands; Timor-Leste AP-3C deployments, 79 deliverables, 79 key performance indicators, 79 surveillance operations, 79 Outcome 1: The protection and advancement of Australia’s

national interests focus, 22 programs (see programs, Defence Outcome 1) structure, 22 total cost, 23-5 Outcome 2: The advancement of Australia’s strategic interests

through the conduct of military operations net additional cost of operations, 77-8 programs (see programs, Defence Outcome 2) summary, 76 total cost, 77 Outcome 3: Support for the Australian community and civilian

authorities, 83-4 Program 3.1, 84 total cost, 83 Outcome (DMO): Contributing to preparedness of Australian

Defence organisation through acquisition and through-life support of military equipment and supplies, 93 programs see programs, Defence Materiel Organisation

Outcome

Pacific Patrol Boat Replacement (SEA 3036 Phase 1), 68 Pacific Services Group Holdings, 166 Paralympian Workplace Diversity Program, 120 parliamentary committee inquiries, 158-9 Parliamentary Program, 60 Parliamentary Secretary to the Minister for Defence, 8, 107 Parliamentary Standing Committee on Public Works, 167 Pathway to Change: Evolving Defence Culture, 33, 44, 55, 56,

60, 112-13, 124, 125, 156 Penguin, HMAS, 143 People in Defence, 134 people with disability, 120, 121 Performance Based Contracting Centre of Excellence, 166 Philippines, 38, 79, 80 Physical Employment Standards, 122, 125 Plan Beersheba, 6, 34 PMKeyS Self-Service Home Portal, 51, 52 Portfolio Additional Estimates Statements 2013-14, 70 Portfolio Budget Statements

2013-14, 70, 89 2014-15, 70, 89 portfolio structure, 9 post-traumatic stress disorder. see mental health Pride in Diversity Australia, 120 Prime Minister, 65, 67, 72, 92, 155 Priority Industry Capability Innovation Program, 181 procurement, 164-5

programs, Defence Outcome 1 Program 1.1: Office of the Secretary and CDF, 26-8 Program 1.2: Navy Capabilities, 29-32 Program 1.3: Army Capabilities, 33-7 Program 1.4: Air Force Capabilities, 38-41 Program 1.5: Intelligence Capabilities, 42-5 Program 1.6: Chief Operating Officer—Defence Support

and Reform, 46-50 Program 1.7: Chief Operating Officer—Chief Information Officer, 51-3 Program 1.8: Chief Operating Offier—Defence People, 54-7 Program 1.9: Defence Science and Technology, 58-9 Program 1.10: Vice Chief of the Defence Force, 60-2 Program 1.11: Joint Operations Command, 63-7 Program 1.12: Capability Development, 68-70 Program 1.13: Chief Finance Officer, 70-2 Program 1.14: Defence Force Superannuation Benefits, 73 Program 1.15: Defence Force Superannuation Nominal

Interest, 73

Program 1.16: Housing Assistance, 74-5 Program 1.17: Other administered, 75 programs, Defence Outcome 2 Program 2.1: Operations Contributing to Security of

Immediate Neighbourhood, 79-80 Program 2.2: Operations Supporting Wider Interests, 81-2 programs, Defence Outcome 3 Program 3.1: Defence Contribution to National Support

Tasks, 83-4

programs, Defence Materiel Organisation Outcome Program 1.1: Management of Capability Acquisition, 93-8 Program 1.2: Management of Capability Sustainment, 99-106 Program 1.3: Provision of Policy Advice and Management

Services, 107

Project Suakin, 60, 130 Public Governance, Performance and Accountability Act 2013, 49, 165 Public Interest Disclosure Scheme, 154 Public Service Act 1999, 7, 87, 136, 139

questions on notice, 159-60

Rapid Prototyping, Development and Evaluation Program, 68, 69 RecruitAbility scheme, 120 Red Flag, 38 reform management, 112. see also Chief Operating Officer rehabilitation through the arts, 18-19 Remuneration Tribunal Act 1973, 138 Reserves

number of Reservists, 128, 130, 146 paid strength, 130, 132 Project Suakin, 130 Review into the treatment of women in the Australian Defence

Force, Phase Two report, 113, 122, 124 Review of allegations of sexual and other abuse in Defence (DLA Piper Review), 156 Review of employment pathways for APS women in the

Department of Defence, 122 Royal Australian Air Force. see Air Force Royal Australian Navy. see Navy Royal Commission into Institutional Responses to Child

Sexual Abuse, 46

DEFENCE ANNUAL REPORT 2013-14 193

INDEX

Seahawk helicopters, 95, 99, 102, 103 search and rescue, 29, 64, 65-7, 84 Secretary appointment, 26

diverse workforce role, 122 remuneration, 138 decisions, 136, 137 review, 2-4 Secretary and Chief of Defence Force Gender Equality Advisory

Board, 122

Senate Estimates, 159-60 Senate Standing Committee on Foreign Affairs, Defence and Trade, 159, 160 Senate Standing Committee on Foreign Affairs, Defence

and Trade—Legislation Committee, 159, 160 senior executive, 151 Senior Executive Service APS salary rates, 137

non-superannuable bonuses, 138 statistics, 151 Senior Leadership Group, remuneration, 137-8 SENTINEL, 142 Sex Discrimination Commissioner, 113, 124 Sexual Misconduct Prevention and Response Office (SeMPRO),

54, 112, 113, 141

sexual misconduct reporting, 113 sexual violence in conflict, 123 Skilling Australia’s Defence Industry Program, 181 Solomon Islands, 2, 6, 79 South Sudan, 38, 46, 81, 82 Space Surveillance Radar, 68 Space Surveillance Telescope, 68 Strategic Commercial Legal Panel, 179 Strategic Communications Branch, 60 Strategic Policy Division, 26, 62 Strategic Reform Benefits Framework, 112 Strategic Reform Operating Model, 47, 112 Strategic Reform Program 2009, 112 Strategic Research Investment program, 58 Strategic Risk Framework, 44 Strategy Executive, 26 Success, HMAS, 65 Superannuation Nominal Interest, 73 Sydney Theatre Company, 18, 19

tactical payment scheme, 181 Terrestrial Communications project, 51, 52, 159 Timor-Leste, 6 Tobruk, HMAS, 80 Top 4 Strategies to Mitigate Targeted Cyber Intrusions, 42 truck replacement program (LAND 121), 68 Typhoon Haiyan (Yolanda), 79, 80

Unapproved Major Capital Investment Program, 68 United Nations Middle East missions, 81 North Africa missions, 81

United States Australia - United States Defence Trade Cooperation Treaty, 27 Department of Defense, Foreign Military Sales program, 172 Force Posture initiatives, 2 trilateral cooperation, 4

Universal McCann Australia, 175 Uruzgan province, military mission. see Afghanistan The use of alcohol in the Australian Defence Force (Hamilton review), 126

Values (APS), 7 vetting practices, 42, 43, 155 Vice Chief of the Defence Force, 5, 60 Vice Chief of the Defence Force Group

achievements, 60 ADF Cadet Scheme, 60 deliverables, 61 key performance indicators, 62 mission, 60 responsibilities, 60 Victoria Cross recipients, iv Voyager, HMAS/HMAS Melbourne collision 1964, 160

Waterhen, HMAS, 166 Whistleblower Scheme, 154-5 WHS Management System, 142 women

employment pathways for APS, 114, 122 Senior Executive Service, 122, 151 treatment, 113, 122, 124 ‘Women in the ADF’ report, 124 work health and safety mental health, 18-19, 143 performance, 142 policy development, 142 statistics, 144-5 Work Health and Safety Act 2011, 49, 86, 142, 144 Work Health and Safety Strategy 2012-2017, 142 workforce. see also Australian Defence Force; Australian

Public Service gender, 146 headcount, 147 Indigenous representation, 118, 119 location, 150 overview, 127 permanent employees, 146 planning, 127-33 profile, 148-9 Workforce Supply team, 139 Workplace Remuneration Arrangement, 134 World Health Organization, 126

YourSay survey, 113

© Commonwealth of Australia 2014

ISSN 1323-5036 (print)

ISSN 2203-0050 (online)

Volume One: Performance, governance and accountability

ISBN 978-0-9925662-1-0 (print)

ISBN 978-0-9925662-2-7 (online)

ISBN 978-0-9925662-3-4 (HTML)

With the exception of the Commonwealth Coat of Arms and where otherwise noted (including photographs protected by copyright), material presented in this document is provided under a Creative Commons Attribution 3.0 Australia licence. Details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.

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Apart from any use as permitted under the Copyright Act 1968, no image may be reproduced by any process without prior written permission from the Department of Defence.

The report should be attributed as the Defence Annual Report 2013-14.

Internet

The Department of Defence website (www.defence.gov.au) provides a comprehensive resource on matters of military security, capability and people issues.

An electronic version of this report and supplementary content to this report that includes additional detailed information can be accessed at www.defence.gov.au/annualreports.

Contact

Feedback about this report is welcome and should be directed to:

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Acknowledgments

This report was developed by the Ministerial and Executive Coordination and Communication Division, with input and assistance from staff throughout the Department of Defence, the Defence Materiel Organisation and the Australian Defence Force.

Editorial consultant: Wilton Hanford Hanover

Concept and design: Defence Publishing Service

Photographs: Unless otherwise attributed, all photographs are from the Australian Defence Image Library http://images.defence.gov.au/fotoweb.

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DEFENCE OUTCOMES AND PROGRAMS

Departmental

programs

Departmental

programs

Departmental

programs

Administered

programs

Program 1.1

Office of the

Secretary and CDF

Program 1.2

Navy Capabilities

Program 1.3

Army Capabilities

Program 1.4

Air Force Capabilities

Program 1.5

Intelligence Capabilities

Program 1.6

Defence Support and Reform

Program 1.7

Chief Information Officer

Program 1.8

Defence People

Program 1.9

Defence Science and Technology

Program 1.10

Vice Chief of the Defence Force

Program 1.11

Joint Operations Command

Program 1.12

Capability Development

Program 1.13

Chief Finance Officer

Program 1.14

Defence Force Superannuation Benefits

Program 1.15

Defence Force Superannuation Nominal Interest

Program 1.16

Housing Assistance

Program 1.17

Other Administered

Program 2.1

Operations Contributing to the Security of the Immediate Neighbourhood

Program 2.2

Operations Supporting Wider Interests

Program 3.1

Defence Contribution to National Support Tasks in Australia

OUTCOME 1 The protection and advancement of Australia’s national interests through the provision of military capabilities and the promotion of security and stability

OUTCOME 2 The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by Government

OUTCOME 3 Support to the Australian community and civilian authorities as requested by Government

DEFENCE

Program 1.1

Management of Capability Acquisition

Program 1.2

Management of Capability Sustainment

Program 1.3

Provision of Policy Advice and Management Services

DEFENCE MATERIEL ORGANISATION

OUTCOME Contributing to the preparedness of the Australian Defence organisation through acquisition and through-life support of military equipment and supplies

Defending Australia and its National Interests www.defence.gov.au