Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Department of Defence—Report for 2014-15, incorporating the report of the Defence Materiel Organisation—Volume 1—Performance, Governance and Accountability


Download PDF Download PDF

DEFENCE

A N N U A L R E P O R T

2014‐15

Volume One

Performance, governance and accountability

ii DEFENCE ANNUAL REPORT 2014‐15

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 programmes, 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 2014 to 30 June 2015.

Report structure

The report is structured according to annual report requirements published by the Department of the Prime Minister and Cabinet. The report is published in two volumes for ease of access.

Volume One: Performance, governance and accountability

Part One provides an overview of Defence, its structure and its strategic direction.

Part Two discusses performance against each of Defence’s programmes.

Part Three provides details of organisational governance and accountability.

The programme 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 2014‐15 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.

Volume Two: Audited financial statements

This volume contains the audited financial statements.

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.

DEFENCE ANNUAL REPORT 2014‐15 iii

Senator the Hon Marise Payne Minister for Defence Parliament House Canberra ACT 2600

Dear Minister

We present the Defence Annual Report 2014‐15 for the year ended 30 June 2015. 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.

Consistent with section 10 of the Public Governance, Performance and Accountability Rule 2014, 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, recording and reporting mechanisms that meet the specific needs of the department, and that Defence has taken all reasonable measures to appropriately deal with fraud relating to the department.

Yours sincerely

Dennis Richardson Mark Binskin, AC

Secretary Air Chief Marshal

9 October 2015 Chief of the Defence Force

9 October 2015

Australian Government Department of Defence

iv DEFENCE ANNUAL REPORT 2014‐15

INSIDE THE REPORT

User guide ii

Letter of transmittal iii

PART ONE: DEFENCE OVERVIEW

Chapter 1: Reviews by the Secretary and the Chief of the Defence Force 1

Chapter 2: Departmental overview 7

PART TWO: PERFORMANCE

Chapter 3: Outcome 1 23

Programme 1.1: Office of the Secretary and Chief of the Defence Force 27

Programme 1.2: Navy Capabilities 32

Programme 1.3: Army Capabilities 36

Programme 1.4: Air Force Capabilities 39

Programme 1.5: Intelligence Capabilities 43

Chief Operating Officer overview 45

Programme 1.6: Chief Operating Officer—Defence Support and Reform 46

Programme 1.7: Chief Operating Officer—Chief Information Officer 50

Programme 1.8: Chief Operating Officer—Defence People 52

Programme 1.9: Defence Science and Technology 57

Programme 1.10: Vice Chief of the Defence Force 60

Programme 1.11: Joint Operations Command 64

Programme 1.12: Capability Development 66

Programme 1.13: Chief Finance Officer 69

Programme 1.14: Defence Force Superannuation Benefits 71

Programme 1.15: Defence Force Superannuation Nominal Interest 71

Programme 1.16: Housing Assistance 72

Programme 1.17: Other Administered 73

DEFENCE ANNUAL REPORT 2014‐15 v

Chapter 4: Outcome 2 77

Programme 2.1: Operations Contributing to the Security of the Immediate Neighbourhood 81

Programme 2.2: Operations Supporting Wider Interests 82

Chapter 5: Outcome 3 87

Programme 3.1: Defence Contribution to National Support Tasks in Australia 88

Chapter 6: Defence Materiel Organisation 91

Programme 1.1: Management of Capability Acquisition 95

Programme 1.2: Management of Capability Sustainment 103

Programme 1.3: Provision of Policy Advice and Management Services 112

PART THREE: GOVERNANCE AND ACCOUNTABILITY

Chapter 7: Reform 121

Chapter 8: People 127

Chapter 9: Corporate governance 159

Chapter 10: External accountability 167

Chapter 11: Asset management, procurement and capital investment 175

Chapter 12: Environmental performance 181

APPENDIXES

Appendix A: Consultancies and contracts 183

Appendix B: Grants and payments 191

Appendix C: Corrections 194

Appendix D: List of requirements 195

Acronyms and abbreviations 198

Index 199

PART ONE

DEFENCE OVERVIEW

CHAPTER ONE

1

Reviews by the Secretary and the Chief of the Defence Force

01

CH

REVIEWS BY THE SECRETARY AND THE CHIEF OF THE DEFENCE FORCE

DEFENCE ANNUAL REPORT 2014‐15 1

Secretary’s

review

The past year has been dominated by:

• a continued high operational tempo

• the White Paper and Force Structure Review

• the First Principles Review, which is leading to far-reaching organisational change

• major procurement decisions

• continued cultural reform.

Air Chief Marshal Binskin’s review highlights the continuing demands on the Australian Defence Force (ADF), including at short notice in response to MH17 and disasters such as Cyclone Pam in Vanuatu. Defence civilians work with the ADF in such situations through the professional provision of critical enablers such as intelligence, facilities, logistics, communications, and financial and people services.

An integrated team of Defence civilians and ADF personnel, led by the Deputy Secretary Strategy, Peter Baxter, has been working on a White Paper, a Defence Industry Statement, and a Force Structure Review since 2014. With the essential challenge of better aligning money and capability, the Government has sought independent cost assurance for all significant capability requirements. The Force Structure Review, the first since 2008‐09, will provide the platform for a fully costed 10-year integrated investment plan and a program of work stretching out to the 2030s and 2040s.

The First Principles Review, led by the former managing director of Rio Tinto Australia, David Peever, was presented to the Government and released publicly in April 2015. It was highly critical of the way the department operates and recommended far-reaching changes to organisational structures and processes under the theme of One Defence. Seventy-five of the 76 recommendations were accepted in whole or in principle.

Consistent with the review’s recommendations, the department developed a two-year implementation plan beginning on 1 July 2015. Implementation is being overseen by a board, chaired by David Peever, which reports directly to the Minister for Defence and the Government.

Secretary of the Department of Defence

Dennis Richardson

2 DEFENCE ANNUAL REPORT 2014‐15

Among the major changes so far implemented are:

• a new ministerial directive to the CDF and the Secretary setting out shared and individual responsibilities and accountabilities

• folding the former Defence Materiel Organisation into the department as the Capability Acquisition and Sustainment Group. The big changes relating to workforce composition, shared services, acquisition and engagement with industry, however, will not flow through until 2016‐17

• the creation of a smaller Defence Committee, a Business Enterprise Committee chaired by the Associate Secretary, Brendan Sargeant, and an Investment Committee chaired by the Vice Chief of the Defence Force, Vice Admiral Ray Griggs

‐ in simple terms, the Business Enterprise Committee is overseeing day-to-day management while the Investment Committee is looking to the future. The latter has assumed responsibility for ICT and estate/infrastructure investment, and will assume responsibility for capability investment in the first part of 2016.

The new capability development process is still being developed and will not become operational until the contestability function is finalised. This process is central to the First Principles Review and involves a fundamental shift in the way business is done within Defence.

At the same time as implementing the First Principles Review, the department continues to downsize. The department’s public service full-time equivalent staff has now reduced from around 22,300 in mid-2012 to just over 18,300 in September 2015. On top of that, a voluntary redundancy programme has been initiated for senior executive and executive level staff. It is likely that the department’s APS workforce will be stabilised in absolute numbers by around mid-2016. Beyond that, however, there will remain challenges in establishing the right mix of skills, especially in the new Capability Acquisition and Sustainment Group and in the Strategic Policy and Intelligence Group.

We hope to be able to finalise over the next little while an agency bargaining offer to Defence public servants, especially given the lapse in time from the last salary increase and the wide-ranging reforms being implemented across the department.

In February 2015 the Government established a competitive evaluation process to determine a design partner for the future submarines. French, German and Japanese entities were invited to submit proposals. These will be received towards the end of 2015, with the evaluation completed in the first half of 2016. The Government has also announced that it is bringing forward the construction of the future frigates and offshore patrol vessels, with a continuous build program in Adelaide for the frigates.

As part of the cultural change embedded in Pathway to Change: Evolving Defence Culture, and consistent with the First Principles Review, the department has revised its performance management process for SES officers, with an emphasis on behaviours. A 360-degree feedback scheme is also being introduced for the SES. It is hoped that these changes will work to reinforce the business changes flowing from the introduction of formalised contestability.

During the course of the year, good progress continued to be made in the recruitment of Indigenous Australians and people with disability. We made little progress in changing the gender balance of the workforce, although we continue to pursue initiatives.

01

CH

REVIEWS BY THE SECRETARY AND THE CHIEF OF THE DEFENCE FORCE

DEFENCE ANNUAL REPORT 2014‐15 3

Finally, the department continued to provide a range of policy advice to the Government on matters relating to Iraq, Afghanistan, the South Pacific, South-East and North-East Asia and in respect of other areas in which we have important Defence interests.

I thank all Defence public servants for their continued professional approach to their work and to the far-reaching changes being implemented across the department. I also acknowledge the contribution of contractors and service providers whose work often goes unacknowledged.

4 DEFENCE ANNUAL REPORT 2014‐15

Chief of the

Defence Force’s review

The end of the 2014‐15 financial year coincides with the end of my first year as Chief of the Defence Force and the culmination of one of the most unpredictable periods in our recent history. Australian Defence Force (ADF) personnel and assets were still engaged in the search for missing Malaysia Airlines flight MH370 in the Southern Indian Ocean off Perth, when Malaysia Airlines flight MH17 was shot down over Ukraine, killing all 298 people on board, including 38 Australian residents. The ADF worked closely with Australian Federal Police colleagues as part of Operation Bring Them Home to complete the sombre task of returning victims to their families in Australia. The following month we began humanitarian aid drops to Iraqi civilians trapped in the country’s north and, by mid-September, our Air Task Group was in the Middle East, awaiting government approval to commence air strikes against Daesh in Iraq.

At the Iraqi Government’s request, the Air Task Group has conducted regular air strikes since October. In that time, the F/A-18A Hornet and F/A-18F Super Hornet combination has flown more than 5,000 hours, employing more than 400 precision weapons against Daesh targets. These operations are part of the international coalition’s air campaign supporting Iraqi Security Force operations on the ground. The combination of Australian strike aircraft, tankers and airborne early warning aircraft make this Air Task Group one of the most capable air packages the ADF has ever deployed. It is also the first completely self-contained Air Task Group we have deployed, with the E-7A AEW&C Wedgetail completing more than 100 operational sorties and the KC-30A air-to-air refuelling team delivering 25 million pounds of fuel to Australian and coalition aircraft. In addition to the dozens of sorties into Iraq to deploy and sustain ADF personnel, Royal Australian Air Force C-17A Globemaster and C-130J Hercules aircraft conducted six military stores deliveries to support local forces and delivered more than 40 tonnes of much-needed humanitarian supplies to displaced civilians.

In addition to the Air Task Group, around 300 ADF personnel are now deployed in Iraq on the Building Partner Capacity mission. Together with their New Zealand counterparts, Task Group Taji provides regular Iraqi Army soldiers with additional training in a range of military skills as well as in the laws of armed conflict and leadership. In the Iraqi Army’s 76th Brigade Commander’s words, the first 700 soldiers graduated on 28 June ‘ready to reclaim their country and take the fight to Daesh’.

This critical training mission is complemented by our 170-strong Special Operations Task Group, which continues to advise and assist the Iraqi Counter-Terrorism Service, helping it to prepare and plan operations, joint fires, air support and artillery. Known collectively as Operation Okra, these missions demonstrate the ADF’s ability to prepare and deploy to Iraq at short notice; a testament to the skill and professionalism of our people and the calibre of our training.

These new operations in Iraq have not come at the expense of our ongoing commitment in Afghanistan, where approximately 400 ADF personnel are deployed on the North Atlantic Treaty Organization (NATO)-led mission Resolute Support. Following the end of combat operations in December 2014, the Afghan National Defense and Security Forces (ANDSF) assumed sole responsibility for the nation’s security. The ANDSF has proven to be a capable and resilient force, but it will continue to face challenges. That is why Australia, in cooperation with the international community, continues to train, advise and assist the ANDSF to further develop leadership, mainly

Chief of the Defence Force

Air Chief Marshal Mark Binskin, AC

01

CH

REVIEWS BY THE SECRETARY AND THE CHIEF OF THE DEFENCE FORCE

DEFENCE ANNUAL REPORT 2014‐15 5

through the Afghan National Army Officer Academy in Kabul and the 205th Corps Coalition Advisory Team in Kandahar. In addition to Resolute Support, ADF personnel were deployed in force protection, medical and intelligence roles, as well as embedded in headquarters, meaning Australia remains one of the largest non-NATO contributors in Afghanistan.

Australia is also at the forefront of international maritime operations in the Middle East region where, over the past two years, Royal Australian Navy ships have seized more than $2.2 billion in illegal narcotics that would have been used to fund terrorist activities around the world. The Navy also forged new territory when HMAS Success became the first Australian ship to participate in a NATO maritime operation on joining Operation Ocean Shield, extending her counter-piracy mission in the Gulf of Aden and off the Horn of Africa. Success also provided logistic support and replenished supplies for both the US Fifth Fleet’s Task Force 53 and international ships assigned to the Combined Maritime Force.

ADF operations across the Middle East region are supported from the ADF’s National Command and Support Element—Joint Task Force 633. Around 400 personnel provide vital national command, communications and logistics support to multiple operations across Iraq, Afghanistan and the Gulf States.

In addition to these major operations, ADF personnel have made an important contribution with the Multinational Force and Observers under Operation Mazurka in the Sinai as well as performing valuable work with the United Nations missions in Israel and Lebanon (Operation Paladin), and in South Sudan (Operation Aslan).

In our own region, the ADF continued to provide people and assets over the past year to conduct maritime border protection operations. In addition to our ongoing commitment to Operation Resolute, the ADF has undertaken regular maritime surveillance and reconnaissance patrols in the South-West Pacific region (Operation Solania) and the South China Sea and northern Indian Ocean (Operation Gateway) to support and maintain regional stability.

As a result of our work at home and abroad (see Figure 1.1), the ADF is acknowledged internationally as one of the most responsive, capable and hard-working defence forces in the world. Those qualities are never more evident than in our work on humanitarian and disaster relief operations. In February 2015, Defence provided approximately $4.95 million in assistance and 130 personnel to the relief and recovery efforts in Queensland following Tropical Cyclone Marcia. At the same time Defence provided assistance to the Northern Territory after Cyclone Lam hit the Gove Peninsula area.

Just four weeks later, Cyclone Pam destroyed large swathes of Vanuatu, and in April a devastating earthquake struck Nepal. On each occasion, the ADF deployed with people and equipment to deliver vital supplies and to help grateful residents clean up and rebuild shattered communities. This work highlights not only our proficiency but also the compassion of our people and their genuine desire to help. The messages of thanks we received for our work on these operations makes me proud to command the ADF.

Figure 1.1: ADF operations during 2014‐15

OPERATION OKRA

OPERATION HIGHROAD OPERATION SLIPPER OPERATION PALATE II

OPERATION SLIPPER OPERATION ACCORDION

OPERATION MANITOU

OPERATION PALADIN

OPERATION MAZURKA

OPERATION NEPAL ASSIST

OPERATION ASLAN

OPERATION HAWICK

OPERATION GATEWAY

OPERATION RESOLUTE

DEFENCE AID TO THE CIVIL COMMUNITY

OPERATION SOLANIA OPERATION RENDER SAFE

OPERATION PARAPET

PACIFIC ASSIST 15

MH370 SEARCH

OPERATION SAVILLE

CHAPTER TWO

2

Departmental overview

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 7

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

In addition to the APS and single-service values, specific Defence values 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

8 DEFENCE ANNUAL REPORT 2014‐15

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 Defence Materiel Organisation (DMO)—a listed entity headed by a Chief Executive Officer. As recommended in the First Principles Review, Defence began action to remove DMO as a listed entity as of 1 July 2015 and to integrate it into the Department of Defence.

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

The Defence portfolio structure is shown in Figure 2.1.

Figure 2.1: Defence portfolio structure as at 30 June 2015

Chief of the Defence Force

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 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 2015.

Defence reports against its programmes under four outcomes—three for Defence and one for the DMO. See the inside front cover for a detailed structure of Defence outcomes and programmes.

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 9

Figure 2.2: Defence organisational structure as at 30 June 2015

Minister for Defence The Hon Kevin Andrews MP

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

Assistant Minister for Defence The Hon Stuart Robert MP

Secretary Mr Dennis Richardson

Associate Secretary and Chief Operating Officer Mr Brendan Sargeant

Enabling functions Capability and output managers

Chief Finance Officer Mr Phillip Prior

Deputy Secretary Strategy Mr Peter Baxter

Chief Defence Scientist Dr Alex Zelinsky

Chief Capability Development Lieutenant General John Caligari ***

Acting Chief Executive Officer Defence Materiel Organisation Mr Harry Dunstall

Chief Information Officer Dr Peter Lawrence

Deputy Secretary Defence People Ms Rebecca Skinner

Deputy Secretary Defence Support and Reform Mr Steve Grzeskowiak

General Manager Land and Maritime Mr Colin Thorne

General Manager Submarines Mr David Gould

General Manager Joint Systems and Air Ms Shireane McKinnie

Acting General Manager Commercial Mr Steve Wearn

Chief of the Defence Force Air Chief Marshal Mark Binskin ****

Vice Chief of the Defence Force Vice Admiral Ray Griggs ***

Chief of Navy Vice Admiral Tim Barrett ***

Chief of Army Lieutenant General Angus Campbell ***

Chief of Air Force Air Marshal Geoff Brown ***

Chief of Joint Operations Vice Admiral David Johnston ***

Stars (*) refer to ADF star rank.

Deputy Secretary Intelligence and Security Mr Stephen Meekin

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.

10 DEFENCE ANNUAL REPORT 2014‐15

FEATURE

Australian technology helps Afghan forces counter improvised explosive devices In areas of Afghanistan, insurgents have been using improvised explosive devices (IEDs) as their weapon of choice against both the Australian Defence Force and its coalition partners. In response to this challenge, Defence’s Counter-IED Task Force sponsored the Redwing programme to meet an identified need of the Afghan National Defense and Security Forces.

The Defence Science and Technology Organisation (DSTO) was tasked to develop unique, low-cost, robust and lightweight force protection counter-IED systems. DSTO designed the systems to meet the challenging requirements set by the task force, including intended use by Afghan military and police units in austere operating environments, with minimal operator training and limited logistical support.

DSTO was able to produce the pre-production prototypes in only a few months, thanks to its deep technical expertise and scientific knowledge of the threat environment developed through many years of investment in counter-IED research and development programmes.

Two devices were developed to defeat specific classes of persistent remote-controlled IED threats: the Greengum version for use by dismounted elements and the Greygum version for fitting to light vehicles. Prototypes were initially developed by DSTO’s Cyber and Electronic Warfare Division and were field-tested both locally and internationally. Due to extremely tight delivery schedules, pre-production prototypes were then developed and tested by DSTO’s Scientific Engineering Services in readiness for their immediate mass production.

The Australian Military Sales Office coordinated with DSTO and a number of Australian companies

for the mass production of both types of devices, with DSTO acting as the technical authority during production. Based on sales to Afghanistan, millions of dollars were invested into Australian industry, resulting in more than 100,000 units being manufactured over an accelerated five-month production schedule. These units have now all been delivered to the Afghan National Defense and Security Forces and are being deployed across the country.

At a press conference in mid-June, the Minister for Defence, the Hon Kevin Andrews MP, announced the delivery of the counter-IED equipment to Afghanistan.

‘Australia was very pleased to provide these force protection systems to the Afghan forces as they work to ensure the security of the Afghan people’, Mr Andrews said.

This project has been an excellent example of the close collaboration between a number of Defence teams and Australian industry partners in successfully transitioning innovative DSTO technology from concept phase to production, resulting in the delivery of a life-saving capability.

The Minister for Defence, the Hon Kevin Andrews MP, announces Australian industry partners who worked with the Department of Defence to provide force protection systems to the Afghan National Defense and Security Forces to counter

radio-controlled improvised explosive devices during a press conference at Russell Offices, Canberra.

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 11

Strategic direction In 2015‐17, major whole-of-organisation reform will shape Defence’s future.

The implementation of the First Principles Review will move Defence to a single, integrated organisation that delivers enhanced joint capability (see Chapter 7). Recommendations from the review will be implemented over the next two years.

The Defence White Paper will present an affordable and achievable long-term plan for meeting Australia’s defence objectives that aligns strategy, capability and resources. It will set out Australia’s planned capability acquisitions for the coming decades, including investment in infrastructure, personnel and information technology systems that are critical to maximising the ADF’s effectiveness as an integrated joint force. Finally, it will focus on Defence’s role as an element of a broader national approach to addressing Australia’s future challenges.

Through the White Paper, the Government will clearly define the scope of the tasks it expects Defence to perform to defend Australia and its national interests.

In support of the White Paper, a fully costed review of force structure is underway to design a more capable and agile ADF that is equipped to respond to a wide range of potential contingencies.

Changes in ministerial responsibilities Following the Prime Minister’s announcement of changes to the ministry on 21 December 2014, on 23 December 2014 the Hon Kevin Andrews MP was sworn in as the Minister for Defence, replacing Senator the Hon David Johnston.

Changes in senior leadership Air Chief Marshal Mark Binskin, AC, was appointed Chief of the Defence Force on 1 July 2014, replacing General David Hurley, AC, DSC.

Vice Admiral Ray Griggs, AO, CSC, RAN, was appointed Vice Chief of the Defence Force on 1 July 2014.

Vice Admiral Tim Barrett, AO, CSC, RAN, was appointed Chief of Navy on 1 July 2014, replacing Vice Admiral Ray Griggs, AO, CSC, RAN.

Lieutenant General Angus Campbell, DSC, AM, was appointed Chief of Army on 16 May 2015, replacing Lieutenant General David Morrison, AO.

Lieutenant General John Caligari, AO, DSC, was appointed Chief of Capability Development Group on 3 October 2014, replacing Vice Admiral Peter Jones, AO, DSC, RAN.

Mr Harry Dunstall was appointed Acting Chief Executive Officer, DMO from 2 March 2015 until 31 July 2015, replacing Mr Warren King.

Mr Steve Wearn was appointed Acting General Manager Commercial, DMO from 11 March 2015 until 30 June 2015.

12 DEFENCE ANNUAL REPORT 2014‐15

Resource summary As at 30 June 2015, the Defence departmental net cash spend was $28,827 million. This was an underspend of $232 million when compared to the revised estimate as at the Defence Portfolio Budget Statements 2015‐16, primarily as a result of an underspend of $185 million, in no-win/no-loss operations funding.

Table 2.1: Total cost of Defence outcomes and programmes on an accrual basis 2014‐15

2014‐15 budget estimate[1] $’000

2014‐15 revised estimate[2] $’000

2014‐15 actual result $’000

Variation

$’000 %

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

Departmental net cost of service 25,462,517 25,492,580 25,717,306 224,726 1

Administered net cost of service 3,445,710 4,562,296 4,496,710 ‐65,586 ‐1

Net cost of service for Outcome 1 28,908,227 30,054,876 30,214,016 159,140 1

Outcome 2: The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by government

Net cost of service for Outcome 2 352,729 789,002 518,107 ‐270,895 ‐34

Outcome 3: Support for the Australian community and civilian authorities as requested by government

Net cost of service for Outcome 3 67,740 67,740 42,058 ‐25,682 ‐38

Net cost of service for Defence outcomes

Departmental net cost of service 25,882,986 26,349,322 26,277,471 ‐71,851 ‐

Administered net cost of service 3,445,710 4,562,296 4,496,710 ‐65,586 ‐1

Total cost of Defence outcomes 29,328,696 30,911,618 30,774,181 ‐137,437 ‐

Notes

1. As published in the Portfolio Budget Statements 2014‐15.

2. As published in the Portfolio Budget Statements 2015‐16.

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 13

Table 2.2: Overall cost to government of Defence outcomes (departmental and administered), 2014‐15

Outcome 1 $’000 Outcome 2 $’000

Outcome 3 $’000

Total $’000

Departmental

Expenses 10,247,338 90,915 17,983 10,356,236

Employees 11,443,367 333,238 24,075 11,800,680

Suppliers 10,966 104,398 ‐ 115,364

Grants 4,257,845 ‐ ‐ 4,257,845

Depreciation and amortisation 137,869 ‐ ‐ 137,869

Finance cost 1,421,750 ‐ ‐ 1,421,750

Writedown of assets and impairment of assets 2,054 ‐ ‐ 2,054

Net losses from sale of assets 51,643 ‐ ‐ 51,643

Other expenses 116,734 8 ‐ 116,742

Total expenses 27,689,566 528,559 42,058 28,260,183

Income

Revenue

Goods and services 849,440 10,452 ‐ 859,892

Other revenue 790,683 ‐ ‐ 790,683

Total revenue 1,640,123 10,452 ‐ 1,650,575

Gains

Reversals of previous asset writedowns 294,866 ‐ ‐ 294,866

Net gains from sale of assets ‐ ‐ ‐ ‐

Other gains 37,271 ‐ ‐ 37,271

Total gains 332,137 ‐ ‐ 332,137

Total income 1,972,260 10,452 ‐ 1,982,712

Net cost of departmental outcomes 25,717,306 518,107 42,058 26,277,471

Administered

Expenses 5,927,001 ‐ ‐ 5,927,001

Revenue 1,430,291 ‐ ‐ 1,430,291

Net cost of administered outcomes 4,496,710 ‐ ‐ 4,496,710

Total departmental and administered outcomes 30,214,016 518,107 42,058 30,774,181

14 DEFENCE ANNUAL REPORT 2014‐15

Table 2.3: Defence resource statement, 2014‐15

Actual available appropriation for 2014‐15 $’000

Payments made 2014‐15 $’000

Balance remaining 2014‐15 $’000

Ordinary annual services

Outcome 1 25,492,580 25,225,948 266,632

Outcome 2 789,002 789,002 ‐

Outcome 3 67,740 67,740 ‐

Total departmental outputs 26,349,322 26,082,690 266,632

Total ordinary annual services 26,349,322 26,082,690 266,632

Other services

Departmental non-operating

Equity injection 2,758,491 2,758,491 ‐

Total departmental non-operating 2,758,491 2,758,491 ‐

Total other services 2,758,491 2,758,491 ‐

Total available annual appropriation 29,107,813 28,841,181 266,632

Special appropriations

Special appropriations limited by criteria/entitlement

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

23,000 23,000 ‐

Defence Force Retirement and Death Benefits Act 1973 Part XII, s. 125 1,794,000 1,782,195 11,805

Military Superannuation and Benefits Act 1991 Part V, s. 17 4,080,883 4,023,444 57,439

Defence Force (Home Loans Assistance) Act 1990 Part IV, s. 38 1,357 1,156 201

Defence Home Ownership Assistance Scheme Act 2008 Part VI, s. 84 103,175 97,206 5,969

Other administered ‐ ‐ ‐

Total special appropriations 6,002,415 5,927,001 75,414

Total appropriations 35,110,228 34,768,182 342,046

Funding from other sources 2,513,673 2,548,645 ‐34,972

Returns to the official public account (net) ‐1,453,059 ‐1,520,430 67,371

Previous years’ outputs (appropriation receivable) 414,742 195,419 219,323

Cash available 35,490 44,150 ‐8,660

Total other available resources 1,510,846 1,267,784 243,062

Total resourcing 36,621,074 36,035,966 585,108

Special accounts

Opening balance 68,382 68,382 ‐

Appropriation receipts ‐ ‐ ‐

Appropriation receipts—other agencies ‐ ‐ ‐

Non-appropriation receipts to special accounts 39,951 41,349 ‐1,398

Total special accounts 108,333 109,731 ‐1,398

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 15

People summary Defence’s workforce consists of APS employees and ADF members of the Navy, Army and Air Force.

The actual funded strength of the ADF increased by 796 to 57,718, and the actual full-time equivalent (FTE) for the APS reduced by 1,201 to 18,787. These actual staffing figures include adjustments for part-time staff and are the most reliable indicator of end-of-year staffing levels.

The ADF’s funded strength grew by 796 (from 56,922 to 57,718) during 2014‐15, and is forecast to continue its growth in future years. The growth has resulted from falling separation rates and sound recruiting achievements.

The reduction in the APS continues the downward trend of the previous two years and is also evident in other workforce measures. The average FTE for 2014‐15 of 19,342 was 1,154 lower than in 2013‐14, and the downward trend is expected to continue in 2015‐16. As the APS workforce trends down, the average FTE figure will always be above the end-of-year actual figure.

Defence’s APS headcount for the year also showed a downward trend, from 21,1911 at 30 June 2014 to 19,967 at 30 June 2015, a reduction of 1,224. The headcount figure includes paid and unpaid employees, counting full-time, part-time, ongoing and non-ongoing employees equally.

Further details on the workforce are in Chapter 8.

Defence Workforce ADF and apsActual funded strength for the adf and actual fte for the aps, as at 30 june , 2 0 1 4 a n d 2 0 1 5

30 JUNE 2015

14,088

30 JUNE 2014

13,921 +167

30 JUNE 2015

30 JUNE 2014

14,096 13,991

+105

30 JUNE

2015

30 JUNE 2014

29,534 29,010 +524

30 JUNE 2015

30 JUNE 2014

18,787

19,988

-1,201

APS

1

Some 30 June 2014 figures have been adjusted from what was reported in the Defence Annual Report 2013‐14 to account for retrospective transactions.

16 DEFENCE ANNUAL REPORT 2014‐15

Workforce planning figures Table 2.4: Defence workforce table

2013‐14

actual

2014‐15 budget estimate[1]

2014‐15 revised estimate[2] 2014‐15

actual

Variation[3]

Number %

ADF[4]

1 Total ADF permanent force 56,364 58,839 57,688 57,512 ‐176 ‐0.3

APS

APS—Defence 15,280 14,883 14,426 14,861 435 3.0

APS—DMO 4,812 4,777 4,539 4,075 ‐464 ‐10.2

APS—DMO (APS backfill) 404 432 406 406 ‐ ‐

2 Total APS 20,496 20,092 19,371 19,342 ‐29 ‐0.1

Contractors[5]

Defence contractors 340 445 319 350 31 9.7

DMO contractors 18 48 48 11 ‐37 ‐77.1

3 Total contractors 358 493 367 361 ‐6 ‐1.6

Total workforce strength (1+2+3) 77,218 79,424 77,426 77,215 ‐211 ‐0.3

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 2014‐15.

2. As published in the Portfolio Additional Estimates Statements 2014‐15.

3. Figure is the difference between 2014‐15 revised estimate and 2014‐15 actual.

4. 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 who rendered service during the financial year. These are excluded because, due to the nature of Reserve service, numbers for the Reserve force represent headcount rather than average full-time equivalents.

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

Figure 2.3: Defence workforce summary as at 30 June 2015

38%

25%

0.5%

Navy

18%

18.5%

Army

Air Force

APS

Contractors

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 17

FEATURE

Centenary of Anzac commemorations The period between August 2014 and Remembrance Day 2018 contains a number of historical milestones when the Australian Defence Force (ADF) will join the Australian and international community to commemorate the centenary of World War I and pay tribute to the sacrifice of those who have fought and died in war.

The ADF has actively supported a range of ceremonies and events across Australia and internationally since commemorations began on 4 August 2014—exactly 100 years since the British declaration of war on Germany and Australia’s immediate pledge of full support. The ADF will participate in more than 130 agreed Centenary of Anzac commemorations and other significant anniversaries through until 2018.

On 17 August 2014, a service was held at Government House in Sydney and then at Cockatoo Island to remember the Australian Naval and Military Expeditionary Force that left Sydney a century earlier en route to German New Guinea. Approximately 200 cadets from across the Navy, Army and Air Force attended this commemoration, along with HMA Ships Huon and Advance.

The ADF provided significant support in October 2014 to commemorations marking the departure of the 1st Australian Imperial Force from Albany. Many thousands of Australians paid tribute to the Australians and New Zealanders (and thousands of horses) who departed Albany in a convoy of 36 ships headed to the Middle East. The event was attended by the Governor-General and the prime ministers of Australia and New Zealand, as well as a large number of veterans and the community. HMA Ships Anzac, Arunta, Stuart, Rankin and Sirius were in location, along with PC-9s for fly-pasts, the Royal Australian Navy Band, Guards from HMAS Stirling and 13th Brigade, and the Indigenous Performance Group, who all proudly represented the ADF at this event.

On 9 November 2014, a commemorative service for the Battle of the Cocos Islands was held on the

Cocos (Keeling) Islands to remember the losses of Australian and German lives when HMAS Sydney and SMS Emden fought a naval gunnery duel.

Anzac Day 2015—marking one of the most significant events of the Centenary of Anzac, the 100th anniversary of the Gallipoli landings— saw record attendances at dawn services and marches across Australia and overseas. The ADF supported more than 1,500 domestic Anzac Day requests. Across most Australian cities, towns and communities, and at numerous events and activities, the ADF provided a visible joint presence, whether of regular forces, reservists or cadets. Australia’s Federation Guard and ADF bands played integral roles in ceremonial activities in Turkey, France, Belgium and Canberra. More widely, overseas Anzac Day services were conducted at more than 120 cities across the globe.

Anzac Day 2015 was also commemorated by more than 2,200 ADF personnel deployed on operations around the globe. Traditional dawn services and ceremonies were held in locations across the Middle East region, in Africa and at sea.

The ADF continues to honour the Anzac spirit while serving Australia’s national interests. The extraordinary, strong and enduring bonds of mateship, demonstrated by the original Anzacs, are considered fundamental to military life today.

Representatives of the three Services lay a wreath at the Alice Springs cenotaph during the 2015 Anzac Day commemorations: (left to right) Commanding Officer HMAS Arunta, Commander David Landon, CSM, RAN; Officer Commanding Centre Squadron, Norforce, Major Scott Tobias;

and Commanding Officer No. 1 Radar Surveillance Unit, Wing Commander Chris Robson.

18 DEFENCE ANNUAL REPORT 2014‐15

Links to the Centenary of Anzac

Being involved in the Centenary of Anzac commemorations was particularly significant for Leading Seaman Communication Information Systems Mark Butler.

‘My great-grandfather, Ashton Butler, served in World War I as an artilleryman with the 10th Field Artillery stationed in Belgium’, Mark said.

‘He saw battle on the Western Front in 1917 and 1918, including the major battles in and around the Hindenburg Line in France, before he fell foul of a gas attack near the village of Rouelles and was sent home to Australia.’

Mark’s grandfather, Maxwell, joined the Navy during World War II and was part of the commissioning crew of the famed HMAS Sydney (II). Fortunately, he was posted off the ship just before Sydney’s ill-fated final mission.

Corporal Andrew Franks was a veteran of Gallipoli and the Somme

and the grandfather of Defence regional property services officer Rosalie Joyce.

‘I didn’t get to meet my grandfather, although I’m proud of the sacrifices he and many other Anzacs made’, Rosalie said.

Andrew enlisted in August 1914. He left in October 1914 for Egypt and eventually Gallipoli, where he fought with B Company, 7th Battalion. Andrew took part in the Anzac landing on 25 April 1915.

The 7th Battalion’s first major action in France and Belgium was at Pozières in 1916, in the Somme. They fought major battles at Menin Road and Broodseinde in September and October 1917 and then spent much of the ensuing winter in the Ypres mud.

In 1918, the 7th Battalion helped stop the German spring offensive and later participated in the Allies’ own great offensive that began with the battle of Amiens.

Andrew returned to Australia after the war, married and raised a family, only to re-enlist following the outbreak of World War II. He died on 5 March 1959 at the Heidelberg Repatriation Hospital in Melbourne.

DEPARTMENTAL OVERVIEW

02 CH

DEFENCE ANNUAL REPORT 2014‐15 19

Major Lynn Harding, Staff Officer 2 Health Governance at Headquarters Forces Command, Victoria Barracks, Sydney, joined the Army in 1975. She is proud of her Anzac heritage.

Her paternal great-uncle, Ralph Carlyle Geoffrey Prisk, was a graduate of the first class at the Royal Military College.

‘He was 20 years old when commissioned after three-and-a-half years at the Royal Military College and was posted as a lieutenant to a Victorian unit, which was immediately sent to Gallipoli’, Lynn said.

His older brother, Harold Tennyson Prisk, enlisted in the 5th Reinforcement of the South Australian 9th Light Horse Regiment in December 1914.

‘He served at Gallipoli and later in the Middle East as a sergeant’, she said.

Lynn’s maternal grandfather, Douglas Moore, joined the Navy in August 1915. He served as a stoker on HMAS Cerberus and in London throughout World War I.

‘He was discharged after the war, and re-enlisted for World War II, eventually retiring from the Navy as a Chief Petty Officer in January 1959’, Lynn said.

Lynn attributes her long military career to the influences of her grandfather and two great-uncles.

FEATURE

Passion mixed with pride is a strong emotion for anyone, especially

if you’re a serving ADF officer with a direct link to the landings at Anzac Cove.

Wing Commander Greg Pasfield, of Headquarters Joint Operations Command, gets understandably emotional when he talks about his grandfather, Company Sergeant Major James Albert Pasfield.

James enlisted in August 1914 in the 1st Field Company, Royal Australian Engineers.

He was part of the 3rd Brigade, in one of the first units on the beach at Gallipoli on 25 April 1915. He then served in Egypt and later as part of the 1st Division, Australian Imperial Force on the Western Front, returning to Australia in 1919.

‘My grandfather’s service has always been a source of motivation for me’, Greg said.

PART TWO

PERFORMANCE

CHAPTER THREE

3

Outcome 1

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 23

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

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 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, the outcome encompasses all of the policy, command and support functions undertaken by the organisation.

There are 17 programmes under Outcome 1. These include departmental outputs for programmes 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 were met in 2014‐15.

Figure 3.1: Deliverables

24%

1%

5%

66%

4%

Met

Substantially met

Partially met

Not met

Not applicable

Figure 3.2: Key performance indicators

23%

2%

73%

Met

Substantially met

Partially met

Not applicable

2%

24 DEFENCE ANNUAL REPORT 2014‐15

Table 3.1: Total cost of Defence Outcome 1

2014‐15 budget estimate[1] $’000

2014‐15 revised estimate[2] $’000

2014‐15 actual result[3] $’000

Variation

$’000 %

Programme 1.1 Office of the Secretary and CDF

Revenues from other sources 538 538 2,066 1,528 284

Departmental outputs 160,008 169,128 178,346 9,218 5

Programme 1.2 Navy Capabilities

Revenues from other sources 128,840 120,964 170,177 49,213 41

Departmental outputs 4,797,105 5,103,368 4,883,020 ‐220,348 ‐4

Programme 1.3 Army Capabilities

Revenues from other sources 108,015 103,207 94,003 ‐9,204 ‐9

Departmental outputs 5,986,472 6,498,449 6,696,643 198,194 3

Programme 1.4 Air Force Capabilities

Revenues from other sources 194,350 165,358 171,550 6,192 4

Departmental outputs 4,761,993 5,163,895 4,796,682 ‐367,213 ‐7

Programme 1.5 Intelligence Capabilities

Revenues from other sources 11,478 11,500 8,962 ‐2,538 ‐22

Departmental outputs 537,966 558,483 654,608 96,125 17

Chief Operating Officer

Revenues from other sources 356,600 382,611 420,204 37,593 10

Departmental outputs 5,548,196 5,674,340 5,634,111 ‐40,229 ‐1

Programme 1.6 Chief Operating Officer—Defence Support and Reform

Revenues from other sources 351,297 377,744 418,747 41,003 11

Departmental outputs 4,085,667 3,976,543 3,957,221 ‐19,322 ‐

Programme 1.7 Chief Operating Officer—Chief Information Officer

Revenues from other sources 5,303 4,867 1,151 ‐3,716 ‐76

Departmental outputs 979,344 1,253,555 1,238,654 ‐14,901 ‐1

Programme 1.8 Chief Operating Officer—Defence People

Revenues from other sources ‐ ‐ 306 306 ‐

Departmental outputs 483,185 444,242 438,235 ‐6,007 ‐1

Programme 1.9 Defence Science and Technology

Revenues from other sources 35,159 32,867 28,532 ‐4,335 ‐13

Departmental outputs 408,191 416,455 439,766 23,311 6

Programme 1.10 Vice Chief of the Defence Force

Revenues from other sources 346,506 362,077 347,097 ‐14,980 ‐4

Departmental outputs 1,230,805 1,165,416 1,469,576 304,160 26

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 25

2014‐15 budget estimate[1] $’000

2014‐15 revised estimate[2] $’000

2014‐15 actual result[3] $’000

Variation

$’000 %

Programme 1.11 Joint Operations Command

Revenues from other sources 336 ‐ 235 235 -

Departmental outputs 52,168 43,438 38,119 ‐5,319 ‐12

Programme 1.12 Capability Development

Revenues from other sources 26,224 17,261 33,994 16,733 97

Departmental outputs 1,423,081 588,603 614,025 25,422 4

Programme 1.13 Chief Finance Officer

Revenues from other sources 805,333 803,204 695,440 ‐107,764 ‐13

Departmental outputs 556,532 111,005 312,412 201,407 181

Programme 1.14 Defence Force Superannuation Benefits

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

Defence Force Retirement and Death Benefits Act 1973 Part XII, s.125(3) 105,382 154,000 141,195 ‐12,805 ‐8

Military Superannuation and Benefits Act 1991 Part V, s.17 1,318,868 2,337,883 2,281,432 ‐56,451 ‐2

Total administered expenses 1,424,250 2,491,883 2,422,627 ‐69,256 ‐3

Administered revenue from other sources 1,324,094 1,316,539 1,285,809 ‐30,730 ‐2

Total Programme 1.14 100,156 1,175,344 1,136,818 ‐38,526 ‐3

Programme 1.15 Defence Force Superannuation Nominal Interest

Defence Forces Retirement Benefits Act 1948 Part 1, s.15D and VIC, s. 82ZJ(1) 28,598 23,000 23,000 ‐ ‐

Defence Force Retirement and Death Benefits Act 1973 Part XII, s.125(3) 1,782,778 1,640,000 1,641,000 1,000 ‐

Military Superannuation and Benefits Act 1991 Part V, s. 17 1,567,812 1,743,000 1,742,000 ‐1,000 ‐

Total administered expenses 3,379,188 3,406,000 3,406,000 ‐ ‐

Administered revenue from other sources ‐ ‐ ‐ ‐ ‐

Total Programme 1.15 3,379,188 3,406,000 3,406,000 ‐ ‐

Programme 1.16 Housing Assistance

Defence Force (Home Loans Assistance) Act 1990 Part IV, s. 38 1,511 1,357 1,156 ‐201 ‐15

Defence Home Ownership Assistance Scheme Act 2008 Part VI, s. 84 111,653 103,175 97,206 ‐5,969 ‐6

Total administered expenses 113,164 104,532 98,362 ‐6,170 ‐6

Administered revenue from other sources 13,335 13,953 14,297 344 2

Total Programme 1.16 99,829 90,579 84,065 ‐6,514 ‐7

Table 3.1 (continued)

26 DEFENCE ANNUAL REPORT 2014‐15

2014‐15 budget estimate[1] $’000

2014‐15 revised estimate[2] $’000

2014‐15 actual result[3] $’000

Variation

$’000 %

Programme 1.17 Other Administered

Administered revenue from other sources 133,463 109,627 130,185 20,558 19

Expenses ‐ ‐ 11 11 ‐

Total Programme 1.17 ‐133,463 ‐109,627 ‐130,174 ‐20,547 19

Total resourcing

Total departmental outputs 25,462,517 25,492,580 25,717,309 224,729 1

Total administered 3,445,710 4,562,296 4,496,710 ‐65,586 ‐1

Total departmental revenue from other sources 2,013,379 1,999,587 1,972,260 ‐27,327 ‐1

Total administered revenue from other sources 1,470,892 1,440,119 1,430,291 ‐9,828 ‐1

Equity injection 2,463,678 2,758,491 2,758,491 ‐ ‐

Total resources for Outcome 1 34,856,176 36,253,073 36,419,788 166,715 ‐

Notes

1. As published in the Portfolio Budget Statements 2014‐15, Table 12.

2. As published in the Portfolio Budget Statements 2015‐16, Table 12.

3. At the programme level, departmental revenues from other sources include minor reclassifications from expenses.

Table 3.1 (continued)

‘Anzac Cove at Gallipoli was smaller than I had envisaged. I walked the full length of the beach and back again. Somewhere along the way I would have walked in the footsteps of my great uncle who died at Gallipoli. As I looked up to the cliffs, I was in awe of the bravery required of the soldiers who landed at this location. After studying the battles and listening to the history of Gallipoli, I personally believe a significant number of young men from both sides could have been saved had decisions been taken sooner to withdraw from Gallipoli.’

— Caroline Allinson, Chief Information Officer Group

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 27

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Programme 1.1 Office of the Secretary and Chief of the Defence Force

The Secretary of the Department of Defence, Mr Dennis Richardson, AO, is the principal civilian adviser to the Minister for Defence 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 Australian Public Service employees in Defence.

The Chief of the Defence Force (CDF), Air Chief Marshal Mark Binskin, AC, was appointed on 1 July 2014. 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 for Defence and provides advice on matters that relate to military activity, including military operations. The CDF is also responsible for implementing Defence-specific actions in the Australian National Action Plan on Women, Peace and Security 2012‐2018, which relates to the role of women in armed conflict and international peace and security efforts. Full details of Defence’s achievements under the plan are included in the 2014 whole-of-government progress report and are available at www.dpmc.gov.au.

The Deputy Secretary Strategy, Mr Peter Baxter, is responsible for providing strategic guidance and policy advice to the Secretary and the CDF, and through their offices to portfolio ministers and the Government. This includes central issues of Australia’s defence policy such as the development and use of Defence capability, Defence international engagement, strategic policy development and the strategic dimension of ADF operations. During 2014‐15, Mr Baxter was responsible for managing the development of the Government’s Defence White Paper.

During 2014‐15, the Office managed an array of operational, policy, commercial, regulatory, investigatory, risk and other matters associated with the Defence mission of defending Australia and its national interests.

Table 3.2: Programme 1.1 deliverables

Deliverable Status

Provide direction for the contribution of Defence to operations as directed by government. • • • •

Ensure delivery of the Defence Cooperation Programme within available resources.• • • •

Lead the development of the Defence White Paper. • • • •

Ensure Defence strategic policy aligns with government direction and priorities, including fiscal policy.

• • • •

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

• • • •

28 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

Provide policy advice on strategic issues including strategic risks and core Defence strategy settings, arms control, counter-proliferation, counter-terrorism, international engagement, cyber, space and ballistic missile defence policy, major capability acquisitions, industry and innovation policy.

• • • •

Improve the management of export control of defence and strategic goods. • • • •

The introduction of an electronic permit system has resulted in a significant improvement in Defence Export Control Office response times.

The office is developing a stakeholder-centric, risk-based approach to export licensing that targets identified exports of concern while streamlining the process for legitimate trade of controlled goods and technologies.

The office is also working with industry, research and government sector stakeholders to produce better e-tools and guidance.

The Defence Trade Controls Amendment Act 2015 reduced the burden associated with new export controls. The office will support stakeholders during the 12-month implementation period, which extends until 1 April 2016.

Further enhancements will be made to the Defence export control operating systems throughout 2015 and 2016.

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

• • • •

Implement the recommendations of the review into the Woomera Prohibited Area. • • • •

A new legislative framework enabling co-existence between Defence and the resources sector in the Woomera Prohibited Area came into force in August 2014. Implementation of the review’s recommendations and development of associated supporting policy continue.

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

• • • •

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.

• • • •

Table 3.2 (continued)

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 29

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

Provide investigative and policing advice and deliver investigative services to support discipline within the ADF.

• • • •

The Provost Marshal—ADF provided ADF senior leaders with policing advice to support their responsibilities under the military justice system. This included advice on the strategic alignment of Service Police capability, focused on enhancing effectiveness and efficiency in support of military justice.

Command and control measures were enhanced across the Service Police community to improve Service Police response to events that occur within the ADF.

Service Police records were provided and data support activities were conducted in support of the Defence Abuse Response Taskforce and preparation of responses to questions on notice and media inquiries.

ADF investigators maintained their focus on serious and complex matters in Australia and in deployed locations. A range of activities are in progress to enhance the efficiency and effectiveness of the ADF investigation capability, including reforms to the investigative powers under the Defence Force Discipline Act 1982, and improvements to internal business processes.

Table 3.3: Programme 1.1 key performance indicators

Key performance indicator Status

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

Policy guidance is forward-looking, timely, innovative and practical. • • • •

Delivery of best practice policing and investigative services to the ADF. • • • •

Defence Cooperation Programme

Overview and objectives

The Defence Cooperation Programme has made a significant contribution to Australia’s international defence engagement since the 1960s. The programme:

• promotes the capacity of partners

• improves Australia’s capacity to work with regional partners in response to common security challenges

• builds strong people-to-people links with partners at the tactical, operational and strategic levels.

The Defence Cooperation Programme supports Australia’s strategic interests and its defence relationships with Indonesia, Pakistan, Papua New Guinea and Timor-Leste, and countries in the South-West Pacific, South-East Asia and the Middle East. The objective is to maximise Australia’s security by developing close and enduring links with partners that support their capacity to protect their sovereignty, work effectively with the ADF and contribute to regional security.

The Defence Cooperation Programme’s suite of activities includes education courses, training, personnel exchanges, capacity-building, secondments, strategic dialogues, visits, subject matter expert exchanges, infrastructure support, and exercises and operations. These activities focus on building partners’ capacity in humanitarian assistance and disaster relief, peacekeeping, counter-terrorism, maritime security, and military governance and professionalism. The activities also help to maintain the ADF’s familiarity with the region.

Table 3.2 (continued)

30 DEFENCE ANNUAL REPORT 2014‐15

Lines of engagement

The ADF conducts exercises with Defence Cooperation Programme partners in order to build their capacity and enhance Australia’s capacity to work with them in response to regional security contingencies. Exercises promote interoperability and build familiarity between armed forces. The programme also supports education and training positions in Australia for international defence and security personnel, who undertake short- and long-term courses at Australian military and civilian educational institutions. This training builds professionalism and allows participants to return home with a better understanding of Australia and with established networks among their counterparts.

Australia engages in regular defence talks with programme partners to exchange views on regional security issues and to discuss defence cooperation priorities. The programme also supports a programme of visits by senior defence representatives to and from Australia to improve our understanding of regional militaries and the strategic outlook of neighbouring countries.

Through capacity-building activities, Defence seeks to develop the institutional and governance frameworks of Australia’s partners as well as the capabilities of their security forces. The programme achieves this by providing ADF mobile training teams, supporting logistics and infrastructure development, and supporting the posting of Defence personnel as advisers to partner defence and security organisations.

The Pacific Patrol Boat Programme has been a key element of the Defence Cooperation Programme for nearly 30 years. In that time, Australia has provided 22 patrol boats (with associated personnel and technical assistance) to 12 Pacific island countries to improve their ability to police their maritime zones independently. In 2014‐15, Defence released a tender for the construction in Australia of up to 21 steel-hulled replacement patrol vessels for the Pacific Maritime Security Programme.

Defence also enhanced its arrangements for the English Language Programme provided under the Defence Cooperation Programme to Timor-Leste. In Papua New Guinea, Australia gifted the heavy landing craft ex-HMAS Labuan as a training platform to help strengthen the maritime capability of the PNG Defence Force.

Defence contracted an Australian company, Forgacs, to build a medium landing craft for Tonga. The vessel will assist with disaster relief operations and local sealift tasks. Defence cooperation with Fiji was re-established in 2014‐15, and will initially focus on training, maritime security and dialogue. In support of relief efforts to Vanuatu and Tuvalu after Cyclone Pam, the programme provided funding to Samoa, Solomon Islands and Tonga to enable their Pacific patrol boats to provide assistance.

Other Defence engagement

Australia engages in a significant way with countries including Japan, New Zealand, the People’s Republic of China, the Republic of Korea, the United Kingdom and the United States. Multilateral defence engagement also complements bilateral engagement efforts and is achieved through the Five Power Defence Arrangements, the Association of Southeast Asian Nations (ASEAN) Defence Ministers’ Meeting-Plus, the ASEAN regional forum, and contributions to United Nations missions and activities.

Further details on the Defence Cooperation Programme are available online.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 31

PROFILE: Paul Ross

Delivering life-saving humanitarian aid in the Middle East and Asia‐Pacific region As thousands fled Daesh terrorists in Iraq, the Air Force completed one of Australia’s most complex humanitarian airdrop operations, providing much-needed supplies to Yazidi civilians who were trapped on Mount Sinjar by encircling Daesh forces.

Flight Sergeant Paul Ross, a C-130J Loadmaster, was one of the crew involved in providing life-saving assistance in northern Iraq in 2014. He helped drop 10 pallets of Australian aid as part of a joint international humanitarian effort with Britain, Canada, France and the United States.

Due to the nature of his work, Paul has become accustomed to being ready to move as soon as a crisis occurs.

‘One afternoon we were simply told we needed to jump on a plane that evening and go to the Middle East to assist our already deployed personnel’, Paul said.

‘We operated in a very complex environment, planning and working with our allies. I remember American C-17s, American Hercules and British Hercules all doing their airdrops, as well as an American AC-130 gunship and British Tornados operating in support, in case anything didn’t go to plan.

‘The highlight of the mission was the successful exit of the load of aid over the mountain, because everything leads up to that one crucial moment. I was quite anxious, but as soon as the load went out the back we knew our mission objective was successful.’

Paul, who began his Air Force career in 1990 as an aircraft technician and is now working as a loadmaster, is a longstanding, well-respected and admired member of the C-130J community. He received an ADF Bronze Commendation for outstanding service on deployment to the Middle East Area of Operations in 2011.

He has been involved in multiple deployments over his career. They include Operation Anode in 2003‐04, which made multiple supply trips to Solomon Islands; Operation Sumatra Assist in 2004‐05, which contributed to the disaster relief effort in Indonesia; and Operation Philippines Assist in 2013, which provided support after Typhoon Haiyan.

‘As part of the Air Mobility Group and the Hercules culture, humanitarian missions are definitely something we put our hand up for. We realise we are very lucky in Australia and we want to help people out in times of need’, Paul said.

32 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.2 Navy Capabilities

The Chief of Navy, Vice Admiral Tim Barrett, AO, CSC, RAN, is responsible and accountable to the CDF for the command, leadership and capability output of the Navy. The Chief of Navy is also Defence’s principal naval adviser on strategic affairs.

As part of a balanced Australian Defence Force, the Royal Australian Navy is charged with enforcing our sovereignty, defending and promoting our interests, and maintaining the international systems on which, along with our friends and allies, our way of life depends. The Navy provides government with a broad spectrum of capabilities, from high-end warfighting operations to peacetime humanitarian assistance activities.

The year 2014‐15 was a busy one for the Navy, which saw the commencement of the largest maritime capability transition in decades. The Adelaide class frigate HMAS Sydney and the amphibious ship HMAS Tobruk entered Sydney Harbour for the final time. The final three heavy landing craft, HMA Ships Brunei, Labuan and Tarakan, were decommissioned. Together these five Navy stalwarts had served the nation for a combined total of more than 190 years.

The 27,000-tonne large amphibious ship HMAS Canberra—the largest ship ever operated by the Royal Australian Navy—was commissioned into service on 28 November 2014. Its sister ship Adelaide is scheduled to be commissioned in late 2015. Together with their embarked helicopters and landing craft, the two ships will provide one of the most capable and sophisticated air‐land‐sea amphibious deployment systems in the world.

A major transition in the world of naval aviation took place during the year: the MH-60 ‘Romeo’ Seahawk helicopter was introduced into service, and the 725 Squadron (Naval Air) was re-commissioned on 18 June 2015. The Romeo Seahawks replace the S-70B-2 Seahawk aircraft, which have been in service since 1988. The new aircraft will significantly enhance the Navy’s ability to conduct surface and anti-submarine warfare.

NUSHIP Hobart, the first of the new air warfare destroyers, was launched in Adelaide on 23 May 2015. While Hobart is still some time off operational service, this was a significant milestone in bringing her into service.

Operationally, the Navy deployed HMA Ships Darwin, Toowoomba, Success and Newcastle to the Middle East Area of Operations for counter-terrorism, counter-narcotic and anti-piracy patrols in support of Operation Manitou. Closer to home the Navy continued to provide ships to Operation Resolute for border protection, as well as providing maritime support to the G20 Leaders’ Summit hosted by Australia in Brisbane in November 2014.

HMAS Tobruk, with an embarked MRH-90 Taipan aircraft from 808 Squadron, provided urgent disaster relief and humanitarian assistance to Vanuatu after Cyclone Pam had left the island nation devastated in March 2015. Sail Training Ship Young Endeavour and HMAS Anzac began circumnavigating the globe in support of the Centenary of Anzac commemorations on 22 December 2014 and 15 March 2015 respectively.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 33

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.4: Programme 1.2 deliverables

Deliverable Status

Provide assigned forces and maintain preparedness to deliver capability to meet government requirements. • • • •

Ongoing issues with the maintenance of Armidale class patrol boats to support Operation Resolute are being managed by Navy and the DMO.

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

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

• • • •

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

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

Meet national hydrographic survey and charting obligations. • • • •

Achievement of national hydrographic surveying obligations was affected by platform defects, inclement weather and reassignment to military survey tasking.

Table 3.5: Programme 1.2 deliverables (unit ready days)

Deliverable Status

18 major combatants 2,986 unit ready days • • • •

20 minor combatants 4,837 unit ready days• • • •

The underachievement of unit ready days by Armidale class patrol boats is attributed to the overrun of maintenance activities and, to a lesser extent, extended defect rectification periods.

7 amphibious and afloat support 1,508 unit ready days • • • •

9 hydrographic force 2,810 unit ready days• • • •

Achievement of national hydrographic surveying obligations was affected by platform defects, inclement weather and reassignment to military survey tasking.

Table 3.6: Programme 1.2 deliverables (unit availability days)

Deliverable Status

18 major combatants 2,830 unit availability days • • • •

20 minor combatants 4,273 unit availability days• • • •

The underachievement of unit availability days by Armidale class patrol boats is attributed to the overrun in maintenance packages, which resulted in rescheduling of training periods.

7 amphibious and afloat support 1,298 unit availability days • • • •

9 hydrographic force 2,352 unit availability days• • • •

34 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.7: Programme 1.2 deliverables (products)

Deliverable Status

20 charting projects

• • • •

Table 3.8: Programme 1.2 deliverables (flying hours)

Deliverable Status

16 S-70B-2 (Seahawks) 2,800 hrs • • • •

13 AS350BA (Squirrels) 3,600 hrs• • • •

6 MH-60R Seahawks 2,400 hrs • • • •

Target reduced to 1,700 flying hours due to the transition of the squadron from the United States to Australia.

1 Laser airborne depth sounder aircraft 980 hrs

• • • •

Table 3.9: Programme 1.2 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF. • • • •

Generate and sustain forces to meet the Government’s operational requirements.• • • •

Ongoing issues with the maintenance of Armidale class patrol boats to support Operation Resolute are being managed by Navy and the DMO.

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

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

Achieve HydroScheme 2013‐16 data and surveying tasking requirements to meet national hydrographic surveying and charting obligations.

• • • • Ship-based HydroScheme survey targets in priority areas were only partially met.

Hydrographic ships underachieved due to a number of critical platform defects and unscheduled maintenance. Survey motor launches also underachieved due to platform defects, reassignment to military surveys in lieu of HydroScheme tasking and delay in entering training activities.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 35

PROFILE: Kamala Sharma-Wing

A helping hand for earthquake-ravaged Nepal In April 2015, Nepal suffered a devastating natural disaster when a magnitude 8 earthquake shook the nation, killing more than 8,800 people and injuring more than 23,000 others. Hundreds of thousands of people were made homeless and entire villages were flattened.

The world responded, with aid and recovery agencies quickly deployed in support. Australia provided more than 13 tonnes of aid to Nepal via two Air Force C-17A Globemaster III strategic airlift aircraft.

A Nepalese-born Royal Australian Navy officer appealed to her workmates for aid to send to Nepal, but she never thought it would go viral.

Lieutenant Kamala Sharma-Wing said she began collecting a few things around the house and thought she would appeal to the broader Defence community.

‘My email was forwarded outside Defence, all around Canberra and interstate—I was getting inundated by emails from people wanting to help and support the cause’, Kamala said.

Kamala moved to Australia with her family in 1985 at the age of 13. She kept in touch with her relatives and went to Nepal on holidays.

She joined the Australia‐Nepal Friendship Society in Canberra in 2012 but wasn’t that active as a member. The earthquake changed that.

‘When the earthquakes occurred I really felt like I had to do something personally—I just wanted to help’, Kamala said.

‘My family is very fortunate to be living in Australia. We used to live in Kathmandu, so had we stayed, it would have been us in that situation.

‘With all the support we have received from both Defence members and civilians, this is all much bigger than I ever dreamt.’

The donations collected by the Australia‐Nepal Friendship Society exceeded $41,000. More than four tonnes of usable equipment—in the form of tents, sleeping bags, lightweight doonas and blankets—was also donated.

Kamala said several airlines had supported the cause.

‘Initially, if they had, say, a spare 100 kilograms of cargo allowance, they donated that to let us get medical supplies over there.’

A storage company in Canberra also donated free space in its warehouse.

‘The responses were amazing, and brought home to me how much Australians care and are willing to pitch in when someone needs help.’

36 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.3 Army Capabilities

The Chief of Army, Lieutenant General Angus Campbell, DSC, AM, 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 responsible and accountable to the CDF and the Secretary for the effective and efficient management of the Army. 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 land-based and Special Operations forces, as well as the development of enhanced joint amphibious capability. The Army also contributes to the national domestic response to terrorism, chemical, biological, radiological or explosive incidents, and other national security tasks during peacetime.

The Army’s work continues to be underpinned by its values of courage, initiative, respect and teamwork, and it remains committed to ongoing cultural renewal.

Highlights during 2014‐15 included the following:

• Globally, the Army contributed forces to new operations in Ukraine and Iraq, and maintained commitments in Afghanistan and elsewhere.

• In the South Pacific region, the Army supported Operation Render Safe in Bougainville, locating and destroying explosive ordnance from World War II. The Army also assisted in recovery efforts in Vanuatu following Cyclone Pam.

• In Australia, the Army supported the G20 Leaders’ Summit in Brisbane and disaster relief in Queensland.

• The Army Reserve, a vital component of the total land force, provided formed units and individual specialists in support of both domestic contingencies and overseas operations.

• The Army continued to support members with physical and psychological wounds and injuries, participating in a number of innovative programmes such as the Arts Recovery, Resilience, Teamwork and Skills programme and the Wounded Digger Forum.

• The Army supported Defence’s international engagement objectives through a range of bilateral and multilateral visits, exchanges and exercises. Highlights included Exercise Southern Jackaroo (United States and Japan) and Exercise Kowari (United States and China).

• The implementation of Plan Beersheba continued through the relocation of armoured and supporting capabilities, which contributed to the modernisation of the Army.

• The Army achieved first pass approval from government for Project LAND 400 Phase 2, the mounted combat reconnaissance platform that will replace the Australian Light Armoured Vehicle (ASLAV) fleet.

• Project LAND 200 Tranche 1 delivered a mounted and dismounted battle management system and a digital combat radio system to enhance mission command.

• Project LAND 154 Phase 3A Project Ningaui delivered the Australian route clearance capability, and Joint Project 2088 Phase 1 enhanced the Army’s counter-terrorism capability.

• The Army worked to develop the Capability Realisation Plan for delivery of the LAND 125 3B capability. The Capability Realisation Plan milestone for initial material release was achieved and initial operational capability was on schedule for the planned delivery date.

• The Army marked the Centenary of Anzac through a series of community-oriented commemorative activities.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 37

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.10: Programme 1.3 deliverables

Deliverable Status

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

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

While the Army is able to meet the CDF’s preparedness requirements, some minor personnel and equipment issues have affected the capability of some enabling force elements. Issues are being managed to remediation.

Continue to contribute to domestic security operations. • • • •

In consultation with the Capability Development Group and the Defence Materiel Organisation, continue to plan, develop and monitor the delivery of, and transition to, new capability.

• • • •

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

Continue to strengthen and improve programmes that provide support for Army’s seriously wounded and ill personnel.• • • • In the past year, the Army made substantial progress within the Support to Wounded, Injured and Ill

Programme (SWIIP) domain and the development of the Transition for Employment Programme. The Diggers Forum continues to be an effective engagement activity within the SWIIP space. In addition to these key programmes, A-SWIIP continues to engage with Joint Health Command to ensure that appropriate and timely care is delivered to those in need.

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

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.

• • • •

Implement reform through the Adaptive Army framework, the 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 such as the forming of Multi-role Combat Brigades, an amphibious capability and reform of the Army Reserve).

• • • • These are multi-year programmes that 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.

• • • •

Throughout the year, the Army implemented organisational improvements to Army Reserves recruiting, developed a capability management support tool for the Armoured Corps Trade Model and reviewed AHQ Committee System to identify opportunities to improve governance and accountability in support of strategic decision-making.

Develop programmes to increase diversity within the Army’s workforce, including clear milestones for improving participation rates for females and Indigenous members. Specific targets have been issued by the Chief of Army, which are: women 13 per cent by July 2015, and Indigenous participation 2.7 per cent by December 2015 (this is a departmental target agreed at the Council of Australian Governments).

• • • • Indigenous participation within the Army is at 1.7 per cent. Programmes continue to be developed to target the complex issues surrounding Indigenous recruitment. Women’s participation is at 12 per cent and is maintaining a slow but positive trend.

38 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.11: Programme 1.3 deliverables (rate of effort—flying hours)

Deliverable Status

6 CH-47D Chinook 1,700 hrs • • • •

7 CH-47F Chinook 0 hours• • • •

Not applicable.

Commissioning begins from July 2015.

34 S-70A Black Hawk 5,090 hrs • • • •

41 B-206 Kiowa 6,150 hrs• • • •

5,043 flying hours. The Army is continuing to reduce the timeframe between trainee aircrew graduating from the Kiowa and transitioning to their operational aircraft types.

22 Armed Reconaissance Helicopter Tiger 4,726 hrs • • • •

3,675 flying hours. The Tiger rate of effort improved in 2014‐15. Significant further work is required by Airbus Helicopters to improve turnaround times for spare parts and meet the increase in rate of effort necessary to support capability requirements.

47 MRH-90 Taipan 5,400 hrs• • • •

5,308 flying hours.

Table 3.12: Programme 1.3 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF. • • • • While the Army was able to meet preparedness requirements, there were some minor personnel and equipment issues that affected the capability of some enabling force elements.

Meet the Government’s operational requirements. • • • •

Generate and sustain forces for each current operation. • • • •

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

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

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 39

Programme 1.4 Air Force Capabilities

The Chief of Air Force 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, positioning the Air Force for the future and providing strategic advice on aerospace matters.

Air power is crucial to Australia’s national security. In defending Australia’s air space, providing high-tech surveillance and reconnaissance, and transporting vital supplies in times of need, the Air Force is committed to protecting Australia and its national interests.

The year 2014‐15 brought many milestones: the celebration of the centenary of the first military flight in Australia, the achievement of 800,000 flying hours by all Royal Australian Air Force (RAAF) Hercules types, and the record 16-hour-plus mission over Iraq by the E-7A Wedgetail.

The year also provided a spectrum of challenges and highlights for the Air Force. In 2015, Plan Jericho was launched to transform the Air Force into a modern, fully integrated combat force that can deliver air and space power effects in the information age. After 13 years, Operation Slipper officially ended in December 2014. Operation Okra commenced, and the Air Force deployed an air task group to the Middle East region as part of Australia’s contribution to international efforts to combat the Daesh terrorist threat.

The Air Force’s C-130J Hercules aircraft completed the most complex operational humanitarian airdrop mission in more than a decade to save the lives of people trapped on Mt Sinjar in northern Iraq. After the downing of Malaysia Airlines flight MH17 in Ukraine, half of the Air Force’s C-17A Globemaster fleet operated nearly 24 hours a day, seven days a week, moving people, equipment and supplies into and around Europe.

The Air Force also provided significant humanitarian support in the wake of natural disasters, including relief efforts after Cyclone Marcia on Great Keppel Island, Cyclone Lam in the Northern Territory and Cyclone Pam in Vanuatu. The Air Force also provided humanitarian support to Nepal after a devastating earthquake struck the region, delivering more than 13 tonnes of humanitarian aid, flying 50 hours, and carrying more than 320 passengers between 29 April and 3 May 2015.

The 2014‐15 financial year included a number of developments in future capability:

• In the United States, the first RAAF F-35A Lightning II Joint Strike Fighter made its maiden flight and Australia’s first F-35A qualified pilot flew the aircraft.

• The first RAAF C-27J Spartan aircraft arrived in Australia.

• The Government announced the purchase of two additional C-17A Globemasters and two more KC-30A Multi Role Tanker Transport aircraft.

• In the United States, the P-8A Poseidon was flown by an RAAF pilot for the first time.

• The E-7A Wedgetail fleet reached full operational capability.

• Airservices Australia and the Air Force entered into a memorandum of agreement on 29 May 2015 for the operation of the Heron remotely piloted unmanned aircraft system in Australian civil airspace.

In 2015‐16, the Air Force will continue its commitment to advancing future capability and transitioning to a fully integrated fighting force through Plan Jericho.

40 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.13: Programme 1.4 deliverables

Deliverable Status

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

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

In consultation with the Capability Development Group and the Defence Materiel Organisation, continue to plan, develop and monitor the delivery of, and transition to, new capability.

• • • •

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

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

• • • •

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

Table 3.14: Programme 1.4 deliverables (flying hours)

Deliverable Status

63 PC-9 16,552 hrs • • • •

91 per cent achieved (15,098 hours). Underachievement was due to reduced student throughput at Number 2 Flying Training School, undersubscribed flying instructor courses at Central Flying School and a below-average number of public relations activities for the Roulettes.

16 B300 King Air 350 10,000 hrs• • • •

12 C-130J Hercules 7,350 hrs • • • •

6 C-17A Globemaster III 6,000 hrs• • • •

10 C-27J Spartan 1,000 hrs • • • •

20 per cent achieved (196 hours). Underachievement was due to delays in conversion training in the United States.

5 KC-30A MRTT 4,100 hrs• • • •

2 B737 BBJ 1,600 hrs • • • •

90 per cent achieved (1,434 hours). Underachievement was due to reduced tasking.

3 CL604 Challenger 2,200 hrs• • • •

79 per cent achieved (1,738 hours). Underachievement was due to reduced tasking.

16 AP-3C Orion 7,300 hrs • • • •

6 E-7A Wedgetail 3,000 hrs• • • •

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 41

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

71 F/A-18A/B Hornet 13,000 hrs • • • •

24 F/A-18F Super Hornet 7,050 hrs• • • •

8 P-8A Poseidon 0 hrs • • • •

Not applicable.

Not yet in service.

33 Hawk 127 7,000 hrs• • • •

94 per cent achieved (6,612 hours). Underachievement was due to reduced student throughput.

12 E/A-18G Growler 0 hrs • • • •

Not applicable.

Not yet in service.

2 F-35A Lightning II 230 hrs• • • •

87 per cent achieved (201 hours). Underachievement was due to reduced training demand for aircraft in the United States.

Table 3.15: Programme 1.4 key performance indicators

Key performance indicator Status

Achieve levels of preparedness as directed by the CDF.

• • • •

Meet the Government’s operational requirements.

• • • •

Generate and sustain forces for each current operation.

• • • •

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

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

Table 3.14 (continued)

42 DEFENCE ANNUAL REPORT 2014‐15

Bringing home the victims of the flight MH17 disaster Operation Bring Them Home is the name given by the Australian Government to the whole-of-government mission to repatriate the bodies of the Australians killed in the tragic downing of Malaysia Airlines flight MH17 over Ukraine. Australian Government personnel were deployed to Ukraine and the Netherlands as part of the operation.

Flight MH17 was en route from Amsterdam to Kuala Lumpur on 17 July 2014 when it was struck by what is understood to have been a Russian-made surface-to-air Buk missile. All 298 passengers and crew on board were killed in the incident, including 28 Australians, nine permanent residents of Australia, and one New Zealand citizen who was a long-term resident of Australia.

It was a fitting but sobering task for the Air Force to use its C-17A Globemaster aircraft to help Dutch authorities move the bodies and remains of the deceased from Kharkiv, Ukraine, to Eindhoven Airport in the Netherlands, where

Dutch authorities conducted disaster victim identification.

Under the auspices of the Organization for Security and Co-operation in Europe, 10 search operations were conducted over a 32-square-kilometre area. Australian officials also took part in inspections of the crash site alongside numerous multinational military and civil emergency personnel and volunteers.

An Australian Defence Force Joint Task Force was established in the Netherlands to conduct the coordination, planning and response efforts with the Dutch. In addition, as part of the support arrangements to the operation, an ADF liaison officer was assigned to support the Netherlands Ministry of Defence in The Hague. This position provided a valuable link to ongoing support during subsequent search operations and bodes well for future liaison opportunities.

The RAAF C-17A Globemaster aircraft and crew were called on again to repatriate 22 victims during several sorties from Eindhoven to Melbourne. A small ADF ceremonial detachment joined Australian Federal Police personnel to provide a bearer party, drummer and piper to support a repatriation ceremony at Melbourne Airport.

An MH17 victim is carried from an Air Force C-17A Globemaster by Netherlands Defence Force personnel at Eindhoven Airfield in the Netherlands.

FEATURE

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 43

Programme 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 (up to 30 June 2015), the Defence Security Authority, including the Australian Government Security Vetting Agency.

Throughout 2014‐15, the Intelligence and Security Group delivered timely intelligence in support of Defence and, more widely, government. The year provided a number of challenges and opportunities and saw the Group meet the majority of its key programme deliverables.

The Group continued to work within Defence and with other government agencies to identify and address the major impediments to implementing effective cyber security. The Australian Signals Directorate (ASD) worked to ensure Australia is both protected against emerging cyber threats and adequately positioned to meet the Government’s requirement to implement ASD’s ‘Top 4’ Strategies to Mitigate Targeted Cyber Intrusions. Further information is available online at www.asd.gov.au.

In October 2014, ASD’s cyber security function relocated to the Australian Cyber Security Centre. The centre provides a hub for greater collaboration and information sharing with government and the private sector to raise awareness of the cyber threat and minimise the risks surrounding the adoption of new technologies and services.

Intelligence and Security Group agencies played a crucial role following the downing of Malaysia Airlines flight MH17 in 2014 in Ukraine, providing intelligence support to Operation Hawick in the months that followed the incident. The Defence Intelligence Organisation briefed the Prime Minister and National Security Committee of Cabinet on military considerations throughout the crisis, and deployed one of its analysts to play a key role in the provision of intelligence to the Prime Minister’s Special Representative in Kyiv. The Australian Geospatial-Intelligence Organisation provided timely geospatial intelligence support to Defence, other government agencies, and Australian Federal Police investigators deployed to Ukraine to assist multinational response efforts.

The Australian Government Security Vetting Agency (AGSVA) continued to advance reforms and quality enhancements for its internal and external customers, but noted difficulty in meeting the increased demand across all clearance levels. The Australian National Audit Office delivered its review, entitled Central Administration of Security Vetting, and AGSVA has begun to implement the review’s recommendations.

The Group worked closely with partner agencies to ensure all intelligence and security activity was compliant with relevant legislation, particularly the Intelligence Services Act 2001. The Office of the Inspector-General of Intelligence and Security maintained oversight of Group agencies, assisted with compliance training and support, and provided submissions to the Parliamentary Joint Committee on Intelligence and Security.

The Group continued to provide significant contributions to ADF deployments, particularly in Iraq and ADF exercises. It continued expanding strong intelligence relationships with international and security partners, with intelligence and security collection, analysis, capability and tradecraft exchanges strongly valued by allies and partners.

44 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.16: Programme 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.

• • • • The Group provided timely, accurate and high-quality intelligence and policy advice to meet the Government’s priorities to support ADF, police and wider security operations. During 2014‐15, the Group supported the ADF and allied operations, principally in the Middle East and the Asia‐Pacific region. The Group reallocated resources to support the increased deployment of ADF elements to the Middle East and in response to the downing of MH17.

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

• • • •

In October 2014, ASD’s cyber security function relocated from ASD’s headquarters in Russell Offices to the Australian Cyber Security Centre. The centre provides a hub for greater collaboration and information sharing with government and the private sector to raise awareness of the cyber threat and minimise the security risks surrounding the adoption of new technologies and services.

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

• • • •

Meet AGSVA key performance results as specified in the agency’s Service Level Charter.• • • •

One performance indicator was not met. Three of four indicators were unmeasurable and as such these indicators are under review.

Strengthen the management framework of the AGSVA. • • • • The AGSVA restructured its management framework in October 2014 and ongoing issues are being managed.

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

Ensure the effectiveness of the intelligence and security governance and compliance framework. • • • •

Strengthen the workforce through targeted recruitment, retention and training initiatives.• • • •

Renewal and expansion to meet the Group’s allocated full-time equivalent positions is continuing. Retention initiatives are being developed and high investment in training continues.

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

• • • •

Contribute to reform outcomes.

• • • •

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 45

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.17: Programme 1.5 key performance indicators

Key performance indicator Status

Deliver intelligence and security services to meet Defence and government requirements. • • • •

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

Strengthen the approach to security across Defence and government. • • • •

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

Achieve best practice in governance and compliance.

• • • •

Ensure that the intelligence and security workforce is developed and skilled. • • • •

Deliver intelligence capability dividends through international and national partnerships. • • • •

Chief Operating Officer overview

The Associate Secretary and Chief Operating Officer, 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.

In 2014‐15, the Chief Operating Officer provided coordinated and substantive specialist advice and services to the Defence ministers, the Secretary and the CDF. The Chief Operating Officer domain incorporates three programmes: Defence Support and Reform (1.6), Chief Information Officer (1.7) and Defence People (1.8).

Significant support was provided to the First Principles Review team, which delivered its report to government on schedule in March 2015. From the release of the review on 1 April, implementation planning began, in consultation with the Secretary and the CDF. Further information on the First Principles Review can be found in Chapter 7.

The primary focus for the Chief Operating Officer in 2014‐15 was transformation of service delivery and integrating the work of the enabling Groups to ensure that they work more effectively together to strengthen their support for Defence capability. Work progressed on developing Defence’s service delivery systems and making corporate and enabling services more efficient, integrated and relevant to customer needs. This involved the development of an agreed service delivery framework for Defence, continuing implementation of shared services, standardising services, removing duplication of functions and ensuring that there are single, clear lines of ownership and accountability.

The Enterprise Management System, including Defence corporate planning and risk management, has matured and Defence is well placed to comply with the risk and performance management aspects of the Public Governance, Performance and Accountability Act 2013 in 2015‐16.

46 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.6 Chief Operating Officer—Defence Support and Reform

The Deputy Secretary Defence Support and Reform, Mr Steve Grzeskowiak, is responsible for delivering most of the shared services that support the ADF and Defence Groups. The Group is fundamental to generating Defence capability through the services it provides, including legal services; personnel administration; ministerial and parliamentary coordination and communication; housing; a range of personnel support functions; business services; base support services including catering, accommodation, cleaning and grounds maintenance; and managing, developing and sustaining the Defence estate.

Delivering a strategically aligned, affordable, safe and sustainable estate is fundamental to Defence achieving the capability and service levels it requires.

In 2014‐15, a key estate and infrastructure priority was progressing whole-of-life asset management as the core principle of planning, management and use of the estate. Improvements were made to planning and prioritisation, appraisal and estate management systems. Consolidation of the Defence estate was another priority. This will enable a more efficient estate that is better able to support Defence capability requirements. Chapter 11, ‘Asset management, procurement and capital investment’, contains further information on the progress of capital facilities projects.

Ten new base services contracts, worth approximately $1.1 billion a year, were in operation by December 2014. The large-scale, complex transition from the previous 21 contracts to the new contracts occurred between November and December 2014, on schedule. These contracts support working operations at domestic bases and training areas and offer greater standardisation through national service delivery arrangements and standards.

In 2014‐15, Defence’s ministerial team processed 7,631 submissions and items of correspondence. Defence brought forward 99 cabinet submissions, memorandums and briefings to Cabinet and the National Security Committee of Cabinet. The Minister for Defence was provided with 270 briefings on Defence’s and other departments’ submissions to Cabinet.

In 2014‐15, Defence’s communication and media teams distributed 1,202 media alerts and releases, posted 55,000 images on the Defence image gallery, produced 23 editions of Service newspapers and 118 video news releases, and published 937 tweets, with 38 rated in the top 10 daily government tweets.

Defence legal highlights in 2014‐15 included:

• provision of advice on the legal framework for the US Force Posture Agreement, including ratification and implementation aspects, and also in relation to MH17

• provision of legal advice to and support for ADF military operations in Iraq (Operation Okra) at the strategic, operational and tactical levels

• playing a key role in finalising a long-running and complex intellectual property dispute with a US-based software company. The dispute involved concurrent litigation in both the Federal Court and the Copyright Tribunal. More than $88 million in damages and injunctive relief had been sought against Defence. The litigation settled at mediation in February 2015 on terms favourable to Defence

• contributing to various Defence-related legislative packages, including those to establish ADF Cover from 1 July 2016 and the development of the Defence Legislation (Enhancement of Military Justice) Act 2015

• involvement in the implementation of the Re-Thinking Systems Review, including through the coordination of amendments to the Defence Act and new defence guidelines on fact-finding and decision-making.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 47

1,202

media alerts

and releas es

were distributed

# #

#top 10 dail Y unique

tweets ra ted

Defence on twitter FOR

new

unique tweets published

118

937 4,899

38

video news releas es to media

issued minutes 1,165

368

hits 300,000 at tracTING more than

on the Defence video portal

web clips published

government tweets

90,000 copies

of Serv ice news pa perS

were distributed

23 editions

of Serv ice news pa perS were produced

7,930 copies

of the defence

magazine were distributed

55,000

IMAGES

were posted on the Defence

More tha n

Image gallery and at tracted

more than 818,000

pa ge views

4,384 media

inquiries were received

followers

48 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.18: Programme 1.6 deliverables

Deliverable Status

Provide accurate, timely, high-quality advice and support to the Defence ministers, CDF, Secretary and the Government to support effective risk management, decision-making and policy engagement.

• • • •

Provide high-level integration, coordination, reporting and oversight of Defence strategic reform programmes. • • • •

Provide specialist legal advice and support to Defence ministers, the Secretary, CDF, Defence and the Government, and legal advice and support for ADF operations.

• • • •

Continue to implement reforms to the military justice system. • • • •

Defence is pursuing reforms to the military discipline and administrative systems as part of recent external and internal cultural and military justice reviews. The first tranche of legislation to enhance the military justice system has received royal assent. Further legislation will be introduced to make the new military discipline arrangements permanent and make necessary consequential amendments.

Formulation of concept, policy, legislation and procedure for the Defence legislative programme. • • • •

Deliver base support services and other services in Defence. • • • •

Maintain single Service, joint, combined and coalition capability by providing training area and range management, estate development services, and coordinating support to major domestic operations and exercises.

• • • • Major joint combined exercises were successfully supported by the training estate throughout 2014‐15. Prioritisation of maintenance, refresh or replacement of training areas and ranges is ongoing, and ensures that Defence continues to meet capability and operational requirements within resource allocations.

Manage and sustain the Defence estate to meet government and Defence requirements by developing and delivering major infrastructure, property, base security improvement, and environment plans and programmes.

• • • •

The Group continues to develop and deliver the Defence estate investment programme, including the Major Capital Facilities Programme (developed using a risk-based prioritisation methodology that aligns with government and Defence requirements), leasing, property disposals; and environmental remediation. Further detail on delivery of the 2014‐15 Major Capital Facilities Programme is provided online.

Increase public awareness of Defence activities and achievements and strengthen Defence capabilities in media-related activities to promote Defence’s reputation.

• • • •

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 49

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.19: Programme 1.6 key performance indicators

Key performance indicator Status

Timeliness and quality advice, including Cabinet documentation, provided by the department meets requirements.

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

Business outcomes are improved as part of broader Defence reform. • • • •

The Group has continued to reform its service delivery, standardising and providing consistent services, and improving contract management.

Transition to the new suite of base services contracts provided Defence with an opportunity to align base services contracts with the Defence reform agenda and secure the best value for money.

The successful transition was supported by a new operating model, contract management structures (including the establishment of internal shared service for contract administration) and business processes. Further development of the new contracts and model will continue into 2015‐16.

Agreed support services are delivered to support Defence capability requirements. • • • •

Implementation of service-level partnering agreements is improving accountability and transparency in the delivery of services, and aids capability preparedness through affordable, consistent and standardised service delivery.

The Defence estate is managed and maintained to meet current and future Defence capability and government priorities.

• • • •

A key challenge facing Defence is developing and managing the Defence estate to meet required capability and compliance requirements within limited resources. Ongoing improvements to estate planning, prioritisation and estate appraisal processes will ensure that Defence continues to meet capability and operational requirements.

Approved major capital facilities projects are delivered within budget and schedule, compliant with legislative and other statutory requirements, standards and policies.

• • • • The Group continues to deliver the programme of approved major capital facilities projects. Some projects were affected by schedule delay; however, the overall impact on current and future operational capability is considered to be minimal. The programme of activity remains responsive to budget and scope changes. In delivering the programme, areas of non-compliance with legislative and other statutory requirements, standards and policies are addressed as they are identified. Further detail on delivery of the 2014‐15 Major Capital Facilities Programme is provided online.

Defence meets its legislative and regulatory obligations. • • • •

Defence faces continuing exposure to both non-compliance with the Work Health and Safety Act 2011 and the occurrence of safety incidents. The areas of risk are known and mitigation strategies are in place.

Defence legal support, including specialist legal advice, is provided to Defence ministers, the Secretary, CDF and the Government in support of effective decision-making and policy engagement.

• • • •

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

• • • •

50 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.7 Chief Operating Officer—Chief Information Officer

The Chief Information Officer, Dr Peter Lawrence, is responsible for ensuring that Defence has a dependable, secure and integrated information environment to support Defence’s operational and organisational requirements.

The Chief Information Officer Group is undertaking a large-scale transformation programme that will simplify, standardise, and modernise Defence’s information and communication technology (ICT) capability in order to support the integration of future technologies, and ensure the longevity of Defence’s ICT capability into the future.

A major component of Defence’s ICT capability 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 the spectrum required for battlespace networks

• the ICT infrastructure that supports Defence intelligence, surveillance, reconnaissance, communications, information warfare, logistics, command and management.

Key achievements for the Group during 2014‐15 included the following:

• Support continued for the provision of communications services to deployed military forces, such as those assigned to operations Hawick, Pacific Assist, Nepal Assist and Okra. Enhancements have included greater use of Defence’s investment in Wideband Global SATCOM services and assets procured under the Strategic Communications Modernisation-Land Project, such as modern Liaison Officers Briefcases for rapid deployments.

• The Computer Network Defence (CND) Project received second pass approval in May 2015. This project will deliver critical enhancements to Defence’s existing CND capability to reduce the vulnerability of Defence’s information systems, through the provision of advanced CND hardware and software.

• The Terrestrial Communications Project will transform Defence’s wide area and local area communications networks, including improved integration with Defence’s deployed tactical networks. The facilities build has been completed for the three initial operating capability sites, and communications installation at these sites is underway.

• The Centralised Processing Project achieved its operating date on 13 March 2015, when the running system was transferred to Lockheed Martin Australia. This 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 migrated the majority of Defence Secret Network users to the Next Generation Desktop environment and will complete the transition later in 2015. This project is the largest upgrade to the Defence Secret and Restricted networks in a decade.

• The Standalone Network Remediation Programme has been approved by the Secretary and Chief of the Defence Force Advisory Committee, and activity continues against plans to remediate individual standalone networks into a controlled and monitored environment.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 51

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.20: Programme 1.7 deliverables

Deliverable Status

Support to military operations:

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

• • • •

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 Programme is building an improved SIE and governance framework that can effectively support Defence warfighting and business reform objectives through to 2030. The reform projects, including centralised processing,Terrestrial Communications, Next Generation Desktop and Defence’s new People system (Joint Project 2080 Phase 2B.1), will ensure Defence ICT support for military and civilian customers now and into the future.

• • • •

The Centralised Processing Project obtained second pass approval and Defence entered into a contract with Lockheed Martin Australia.

Joint Project 2080 Phase 2B.1—Defence One project experienced schedule delays.

The Next Generation Desktop Project achieved 99 per cent of users being migrated onto the Defence Secret Network.

Maintenance of essential business as usual (BAU) ICT operations and services:

• maintain and support the 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.

• • • •

Approved Defence Capability Plan, Major Capital Facilities (MCF), other approved projects and system enhancements to deliver the ICT elements of endorsed projects and system enhancements in the Defence Capability Plan, MCF and ICT work plans developed through regular engagement with customer representatives.

• • • •

The Terrestrial Communications Project experienced some schedule slippages. Contracts have been updated, with final operating capability for releases 1 and 2 agreed.

Table 3.21: Programme 1.7 key performance indicators

Key performance indicator Status

ICT capabilities are developed and sustained in accordance with agreed stakeholder priorities. • • • •

Resourcing constraints have affected the Group’s ability to deliver.

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

• • • •

The Infrastructure Transformation Programme continues to manage overlaps, dependencies and constraints of Defence’s key ICT reform projects.

ICT security is maintained to an appropriate level.

• • • • Three out of four of the Australian Signals Directorate’s top four mitigations were achieved in 2014‐15.

52 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Key performance indicator Status

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

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.

• • • •

Programme 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.

Defence seeks to attract and retain an integrated, sustainable and diverse workforce to support capability and contribute to Australia’s national security. In 2014‐15, the Defence People Group’s primary objective was to continue to deliver a sustainable people capability through driving cultural change; leading Defence’s people strategy and policies; and supporting the implementation of the First Principles Review and development of the people aspects of the Defence White Paper.

Cultural reform remained a high priority. A key deliverable in 2014‐15 included the commencement of a four-year collaboration with the Australian Human Rights Commission to support the achievement of cultural reform and the intent of Pathway to Change: Evolving Defence Culture.

Defence continued to implement its Diversity and Inclusion Strategy, with a specific focus on increasing the representation of women, Indigenous Australians, those from culturally and linguistically diverse backgrounds, and people with disability. The Culturally and Linguistically Diverse Action Plan was developed to enhance Defence’s efforts to achieve a workforce more representative of the Australian community.

In support of the First Principles Review, work began on a new strategic workforce plan, which will ensure that Defence identifies and addresses skills gaps across the organisation, and that the right people are in the right jobs through linking the workforce plan to Defence’s strategy.

A key achievement was the introduction of amendments to Defence legislation, which will enable permanent ADF personnel access to flexible service arrangements from 1 July 2016. These changes will provide for greater organisational flexibility by allowing different workforce mixes in the ADF, comprising permanent and Reserve personnel. ADF personnel will have greater access to flexible service arrangements, including part-time work.

Other key achievements included:

• establishing a new ADF workplace remuneration arrangement and further simplifying salary structures. Work also continued on a new collective agreement for Defence’s APS employees

• developing a new superannuation package, called ADF Super, to give effect to the Government’s intent for a new, modern and flexible superannuation arrangement for people joining the ADF from 1 July 2016

Table 3.21 (continued)

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 53

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

• implementing a whole-of-Defence work health and safety management system (called Sentinel). Sentinel provides a common technological platform across the organisation to manage and share work health and safety information.

Following the implementation of human resources shared services reform, the Group continued to improve the delivery of people services across Defence. Work began on human resource policy reform and a new service delivery model to support the implementation of the First Principles Review, and to create a consistent service experience based on customer needs. This reform work will be implemented during 2015‐16.

Table 3.22: Programme 1.8 deliverables

Deliverable Status

Provide timely, accurate and high-quality advice on key people issues to the Secretary, CDF and government. • • • • Not all advice was as timely as it should have been.

Continued coordination and facilitation of the Defence-wide implementation of Pathway to Change: Evolving Defence Culture, ongoing cultural reform and sustaining the momentum of our diversity agenda.

• • • •

Defence continues to make progress with cultural reform. Pathway to Change: Evolving Defence Culture recommendations and key actions are 91 per cent implemented. Group and Service cultural reform programmes are progressing and the collaboration project with the Australian Human Rights Commission has had a full year of site visits, and work with the Services, to embed cultural reform.

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

Process applications for Defence medals that reward excellence, achievement and outstanding service.• • • •

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

• • • •

Continue support to Defence members and families through a national service delivery model.• • • •

Coordinate and facilitate the implementation of the Defence Work Health and Safety Strategy 2012‐17. • • • •

Conduct ADF recruiting.

• • • •

Permanent force entry:

• target: 5,829

• total inquiries: 74,407

• total applications: 19,143.

Reserve force entry:

• target: 1,984

• total inquiries: 20,261

• total applications: 3,119.

54 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

Sustain improvements in APS workforce management, including talent management and professionalisation. • • • • Components of the work value review and the job family skilling and professionalisation strategies are at various

stages of maturity.

Deliver a more flexible workforce model that encompasses all ADF members’ ability to serve.• • • •

The majority of the detailed design and other enabling work was completed this year. Full implementation of the ADF total workforce model under Project Suakin is expected by 2016‐17.

Table 3.23: Programme 1.8 key performance indicators

Key performance indicator Status

Advice to the Secretary, CDF and government on people issues is timely and of a high quality. • • • •

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

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

• • • •

91 per cent of Pathway to Change: Evolving Defence Culture recommendations and key actions have been implemented. Defence is three years through a five-year reform agenda, with the focus on cultural reform now shifted to Group and Service programmes and the Australian Human Rights Commission collaboration.

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

• • • • Defence was able to meet more than 90 per cent of the timeframes on requests for information from the taskforce. Most delays related to incidents that occurred prior to the introduction of electronic records management.

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

• • • •

Seamless support to wounded, ill and injured members of the ADF is provided in conjunction with the Department of Veterans’ Affairs.

• • • •

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

• • • •

Implementation milestones are achieved on schedule for the Diversity and Inclusion Strategy. • • • •

Implementation milestones are achieved on schedule for the Defence Work Health and Safety Strategy 2012‐17.

• • • •

Table 3.22 (continued)

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 55

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Key performance indicator Status

ADF recruiting achievement.

• • • • Permanent force entry:

• target: 5,829

• applicants enlisted: 5,312

• enlistment achieved: 91 per cent.

Reserve force entry:

• target: 1,984

• applicants enlisted: 1,081

• enlistment achieved: 54 per cent.

Work is underway to better define Reserve target numbers, based on access to training.

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.

• • • •

A few projects and initiatives are slightly behind schedule or under target.

Implementation of the ADF total workforce model to deliver a more flexible workforce that encompasses all ADF members’ ability to serve.

• • • • The majority of the detailed design and other enabling work was completed this year. Full implementation of the ADF total workforce model under Project Suakin is expected by 2016‐17.

Table 3.23 (continued)

‘I attended the Anzac Day Dawn Service followed by the parade in Sydney with my wife. We were there to see our son march with the crew of HMAS Stuart. It was the first time we had attended Anzac Day commemorations in Sydney and a proud moment for both of us. It was a large parade watched by a huge crowd that lined the streets, sometimes four and five deep. It was also very moving and sometimes very emotional to see many of the old diggers being given rousing cheers from the crowd. Looking around, I was surprised to see so many young people and young families, which reassured me that Anzac Day will live on. The memories of the Anzac Day Centenary commemorations in Sydney will remain with me for years to come.’

— Darryl Johnston, Corporate Communications

56 DEFENCE ANNUAL REPORT 2014‐15

PROFILE: Niki Ross

Leading Indigenous community engagement Niki Ross joined Defence in May 2015 to learn new skills and broaden his career options. He is currently based in Central Australia at the Joint Defence Facility Pine Gap, where he provides security support to the intelligence mission and plays a lead role in Indigenous community engagement.

Part of his role involves working with Aboriginal organisations in Alice Springs and the broader region to increase the diversity of Defence’s workforce, improve Defence’s Indigenous cultural competency, and encourage young Indigenous people into jobs. His main priorities have been establishing work experience programmes and apprenticeships, as well as providing volunteer opportunities for Defence staff and facilitating access to jobs in Defence.

Niki said that a highlight of the year was assisting the Navy warship HMAS Arunta to reconnect with the local Arrernte community, which the ship is named after.

‘This involved escorting local Arrernte traditional owners to Darwin for a smoking ceremony to give the crew strength and power before heading into Exercise Talisman Sabre off Darwin.

‘I value the opportunity to play a role in contributing to Australia’s national security and safety’, he said.

Niki is motivated to develop partnerships with the broader ADF to put Central Australia on the map for Defence opportunities for Indigenous people, particularly among young people who have limited employment options.

‘There are a lot of great training and career opportunities in the military and the public service for Indigenous people’, Niki explained.

Previously, Niki worked for the Department of the Prime Minister and Cabinet. Based in Adelaide, he worked with communities in the Anangu Pitjantjatjara Yankunytjatjara Lands, focusing on government priorities in governance, education and community safety.

Niki grew up and completed his schooling in Alice Springs. He is an Arrernte and Kaytej man from both his mother’s and father’s sides of the family. He is currently studying business and has a particular interest in how businesses operate nationally and internationally.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 57

Programme 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, to portfolio ministers and the Government on defence-related science and technology matters. He leads the Defence Science and Technology Organisation (DSTO) in providing scientific advice and technology support for Australia’s defence and national security.

Support for military operations is DSTO’s foremost priority. During 2014‐15, DSTO deployed two operations analysts, two science and technology liaison officers and one fly-away team to the Middle East Area of Operations. Force protection systems developed by DSTO and manufactured by Australian industry were delivered to the Afghan National Defense and Security Forces.

During 2014‐15, DSTO’s research programme supported 90 per cent of Defence’s high-priority science and technology requirements. Highlights included:

• resolving cracking on the F/A-18 centre pylon, enabling the aircraft’s deployment to the Middle East

• developing the Redwing equipment to protect soldiers and vehicles from improvised explosive devices

• assisting with the HMAS Bundaberg fire investigation.

DSTO undertook technical risk assessments for 25 Defence Capability Plan projects that proceeded to government for decision. The Chief Defence Scientist provided technical risk certification in Cabinet or ministerial submissions for 30 major acquisition projects.

Under its strategic research investment programme, DSTO conducts fundamental research to provide future game-changing capability for Defence. Within this programme, projects in two new areas, autonomous systems and space systems, are being developed.

Following extensive consultation with stakeholders, DSTO developed new policy and governance arrangements to direct future research in support of national security.

DSTO’s capabilities were mobilised to support a number of national security demands. These included investigations into the Malaysia Airlines flight MH17 incident, the ongoing search for flight MH370 and the Sydney siege.

In 2014‐15, DSTO continued to foster interactions with industry, academia, and Australian and overseas research bodies. Highlights included:

• the DSTO Partnerships Week, held at the South Australian site, which showcased DSTO’s research capabilities and collaborative opportunities to more than 300 attendees

• a new strategic alliance with Airbus Group Australia Pacific, and a number of collaborative research and development projects with other alliance partners

• the transition of several technologies (for example, Digital Video Guard) to industry for commercialisation

• participation in the 2015 Maritime Systems and Technologies Asia conference and exhibition in Japan as part of the Defence presence to showcase Australian maritime defence technologies and engagement opportunities

• strong engagement with Australia’s Five Eyes partners through the Technical Cooperation Program and bilateral links, as well as fostering defence science and technology relationships in Asia, particularly with Singapore and Japan.

58 DEFENCE ANNUAL REPORT 2014‐15

PROFILE: Michael Smith

Applying mathematics for information security Dr Michael Smith is head of the Cyber and Cryptomathematics Research (CMR) Group at the Defence Science and Technology Organisation (DSTO). Exploiting cyber mathematics and expanding the group’s scope beyond its traditional expertise of mathematics and high-performance computing are challenges Michael has embraced with enthusiasm.

Being a whizz at mathematics is one thing, but being able to apply that skill in an area that, in partnership with the Australian Signals Directorate, provides critical capability to Defence for information security is what puts Michael on top of the game.

Modern cryptography—the science of making and breaking codes—relies on sophisticated mathematics, which Michael applies to ensure the secure storage and transmission of Defence communications. In the interest of future-proofing Defence systems, Michael and his team are also looking at the impact of emerging technologies such as quantum cryptography.

Michael joined DSTO in 1990 as an experimental officer in the Underwater Systems Division in Melbourne. He took the opportunity offered by DSTO’s postdoctoral cadetship programme and achieved a PhD in mathematics from the Australian National University in 1994. Michael subsequently joined the CMR Group in Canberra as a research scientist. The job was perfectly suited to his talents and he became head of the group in 2011.

Michael has notched up a number of impressive achievements, starting with the inaugural DSTO Achievement Award for Best Contribution to Technology Base in 1998. His proudest achievement was leading an international,

multi-agency programme to deliver a vital capability to ADF deployments. This effort was recognised with the CMR team winning a DSTO Achievement Award for Contribution to Defence Outcomes in 2007 and the Australian Intelligence Community Award in 2008.

Collaboration with other group members, clients and overseas experts has been key to Michael’s research success. He has co-authored more than 50 classified research papers and technical reports, many with world experts.

‘It’s important to create an environment where everyone gets to lead’, Michael stressed.

‘There will always be an enduring role for mathematics. I really enjoy sharing the history of the development of key ideas, particularly in the area of factoring.

‘I think there’s a great deal to be learned from history—a lot of the maths we use on a daily basis goes back more than 2,000 years’, Michael said.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 59

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.24: Programme 1.9 deliverables

Deliverable Status

Provide timely, accurate and expert science and technology (S&T) advice on Defence and national security related matters to the Secretary, CDF and government.

• • • •

Provide effective, relevant and timely:

• S&T solutions and technical support to Defence operations, to the current force and to national security agencies’ operations and capabilities

• S&T support to capability development and acquisition decision-making, including technical risk assessment and certification for Defence Capability Plan projects.

• • • •

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

• • • •

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

• • • •

Contribute to Defence reform outcomes by continuing to seek and implement improvements to DSTO leadership, business and culture, including fostering diversity and gender equality.

• • • •

Table 3.25: Programme 1.9 key performance indicators

Key performance indicator Status

Advice to Defence and the Government on science and technology (S&T) matters is valued through its contribution to improved Defence and national security outcomes.

• • • •

The applied research programme is strategically balanced and aligned with the needs of Defence in support of operations, the current force, capability development and acquisition, and the needs of national security agencies.

• • • •

Research programme outputs enable enhanced Defence and national security capability, treat risks and save resources. • • • •

Strategic research is focused on supporting future Defence capability; it enables game-changing capability in the longer term, to both prevent and create strategic surprise.

• • • •

Programme outcomes are delivered on time, in scope and within agreed resources. • • • •

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 S&T capability is contributed to by:

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

• appropriately leveraged S&T engagement and partnerships with research organisations, industry and academia, including international government agencies.

• • • •

60 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.10 Vice Chief of the Defence Force

The Vice Chief of the Defence Force (VCDF), Vice Admiral Ray Griggs, AO, CSC, RAN, is the military deputy to the CDF and is the acting CDF under standing acting arrangements when necessary. 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 accountability structure for the ADF Cadet Scheme; and initiatives to develop the capacity of the ADF Reserves to support ADF capability.

The 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 has responsibility for the Australian Civil‐Military Centre, which was established by the Government in 2008 to support the development of national civil‐military capabilities to prevent, prepare and respond more effectively to conflicts and disasters overseas.

In addition, the Group has responsibility for the ADF Parliamentary Programme, the Federation Guard, ADF ceremonial activities and the Counter Improvised Explosive Device Task Force.

The Group is committed to driving cultural reform in line with Defence’s Pathway to Change: Evolving Defence Culture programme.

Key achievements in 2014‐15 included the following:

• The Group established sustainable Defence preparedness levels to provide military response options for government and commenced the development of the Joint Concepts Framework.

• The Counter Improvised Explosive Device Task Force was the joint winner in the Risk Initiative category of the Comcover Risk Management Excellence Awards for the counter threat functions approach.

• Joint Logistics Unit infrastructure works were delivered successfully as part of the Defence Logistics Transformation Programme.

• The end-to-end fuel supply chain made a successful transition from the Defence Materiel Organisation to the Group; this change established a single point of accountability.

• More than 7,000 students from over 49 nations received military training.

• Coordinated inter-agency capability was delivered in support of the civil‐military objectives of Exercise Talisman Sabre.

• The Defence eHealth System was fully implemented—this achievement was the first successful roll-out of a national electronic health records system in Australia.

• 1,858 young Australians (approximately 30 per cent of them women) participated in Defence Work Experience Programme placements.

• The Group provided military strategic advice, planning guidance and Defence coordination with other government agencies for a range of ongoing Defence operations, and new operations, including Hawick (Defence support to the aftermath of the Malaysia Airlines flight MH17 disaster in Ukraine) and Okra (Iraq), and disaster relief operations in Vanuatu and Nepal and within Australia.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 61

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.26: Programme 1.10 deliverables

Deliverable Status

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

• • • •

Provide military strategic planning and communication expertise to the CDF in order to prepare direction from the CDF to subordinate headquarters.

• • • •

Provide investigative and policing advice and deliver investigative services to maintain discipline within the ADF. • • • •

Not applicable.

The ADF Investigative Service transitioned to the Office of the Secretary and CDF on 1 July 2014, as amended in the Portfolio Additional Estimates Statements 2014‐15.

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

• • • •

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

• • • •

Provide policy advice and deliver services to optimise the health of ADF personnel.• • • •

There has been a delay in the promulgation of the ADF Rehabilitation Strategy and follow-up implementation plan due to significant feedback from stakeholders. This has not impacted on the delivery of rehabilitation services and the strategy is expected to be finalised prior to December 2015.

Provide Defence, inter-agency, combined and joint capability coordination and preparedness management. • • • •

The preparedness system monitors performance expectations established by the CDF Preparedness Directive on operational tempo and concurrency.

The development of an operational concept/roadmap for the Joint Battlespace Networked Environment and a networked interoperability framework is nearing completion and set for delivery in the fourth quarter of 2015.

Build and sustain a learning environment that links education, training and skilling to Defence capability.• • • •

Enhance the capacity of Reserves to support Defence capability. • • • •

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

• • • •

Promote best-practice civil‐military engagement through the Australian Civil‐Military Centre. • • • •

62 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.27: Programme 1.10 key performance indicators

Key performance indicator Status

Timely, accurate and widely consulted advice provided to government. • • • •

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.

• • • •

Advice is readily sourced and made available to the Offices of the CDF and VDCF to support strategic decision-making. • • • •

ADF operational tempo is managed within concurrency constraints. • • • •

Group-specific reform and savings have been achieved.

• • • •

ADF operations and exercises receive effective and efficient logistics and health support and services.• • • •

ADF joint and combined operational capability is enhanced.

• • • •

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

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

Governance and accountability frameworks enhance the youth development experience within the ADF Cadets and the Defence Work Experience Programme.• • • •

Australian Civil‐Military Centre delivers its goals effectively and efficiently in accordance with government instructions. • • • •

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

Timely and accurate advice on strategic communications.

• • • •

Delivery of Australian best practice policing and investigative support to the ADF. • • • •

Not applicable.

The ADF Investigative Service transitioned to the Office of the Secretary and CDF on 1 July 2014, as amended in the Portfolio Additional Estimates Statements 2014‐15.

Group-specific outcomes and programmes are delivered on time and within agreed resources. • • • •

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 63

PROFILE: Paul Richardson

Commemorating the Centenary of Anzac: a rare privilege for a dedicated soldier Warrant Officer Class One Paul Richardson is currently the Warrant Officer Ceremonial ‐ ADF. He was born and raised in Lakes Entrance, Victoria, and enlisted in the Australian Regular Army in April 1989.

At the completion of his basic training, Paul was allocated to the Royal Australian Army Ordnance Corps and over the past 26 years has been posted to various locations across the Army, predominantly within a regimental Army environment. He has deployed on operations on three occasions to Timor-Leste and Afghanistan.

Much decorated, Paul has been awarded a Chief of Defence Force Commendation for productivity improvements and monetary savings in process techniques; a Commander Sector West Commendation for his efforts as the Repair Parts Supply Sergeant, Batugade, Timor-Leste; a Chief of Army Gold Commendation for service at the 1st Aviation Regiment; and more recently an Order of Australia for his service as a Regimental Sergeant Major.

Paul considers his current role to be a privilege as he is in charge of the coordination of the majority of Centenary of Anzac ceremonial aspects for ADF contingents, both internationally and domestically. As a part of his normal duties he provides ceremonial support to all vice regal and head of government ceremonial engagements in Canberra. He also is the ADF coordinator for the daily Last Post closing ceremonies at the Australian War Memorial.

Paul has a very close family link to the Centenary of Anzac, as his great-grandfather served on the Western Front during World War I. His grandfather served in Papua New Guinea during World War II, and his father was a national serviceman during the Vietnam conflict.

One of the great prerogatives of his job is to travel on representational duties. Paul has been lucky enough to support the Anzac Day Gallipoli commemorative services over the last two years, including the Turkish and Commonwealth ceremonies. He has also played a major role in supporting the Department of Veterans’ Affairs on missions for the 70th Anniversary of Normandy, and the 70th Anniversary of Victory in Europe across France and London, where the highlights were parading in front of and meeting His Royal Highness Prince Charles and spending time with our national treasures, the veterans from World War II.

In the second half of 2015, Paul will plan several Department of Veterans’ Affairs missions to Papua New Guinea and Ambon, including the ceremony to mark the Centenary of the August offensive at Gallipoli. He will also support the Australian War Memorial at the National Remembrance Day Service in Canberra on 11 November.

Paul has a partner, Cheryl, who is a serving ADF member, and together they are proud parents of their four-year-old daughter Grace.

Warrant Officer Class One Paul Richardson being presented

with the shrapnel-holed French bible that saved the life of Lance Corporal Elvas Jenkins at Gallipoli in 1915 and is held in Bible Society Australia’s historical collection. Paul agreed to carry it back to Gallipoli for the 100th anniversary on

Anzac Day this year.

64 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Programme 1.11 Joint Operations Command

The Chief of Joint Operations, Vice Admiral David Johnston, AM, RAN, plans, controls and conducts campaigns, operations, joint exercises, and other activities on behalf of the CDF. The command is also responsible for the ADF’s commitment to the Coastwatch civil surveillance programme and Border Protection Command tasking, providing maritime surveillance assets that are tasked routinely in accordance with the Government’s direction.

Throughout 2014‐15, Joint Operations Command assessed current campaigns to report on progress, risk and additional planning requirements. The Group established a capability to determine 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 an assessment 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 within a whole-of-government framework.

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.

Table 3.28: Programme 1.11 deliverables

Deliverable Status

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

• • • •

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

• • • •

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.

• • • •

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 Programme of Major Service Activities. This includes certification of force elements capable of conducting joint operations across the spectrum of defined joint collective training levels.

• • • •

Certification of joint force elements was achieved for the Deployable Joint Force Headquarters. Implementation arrangements for other joint force training and certification are under development.

Strengthen Australia’s regional influence by deepening defence partnerships with the United States and with select regional powers and the evolution of a campaign approach to coordinate Defence activities across the region.

• • • •

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

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 65

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

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.

• • • •

Contribute to Group-specific reforms and cost reductions.

• • • •

Table 3.29: Programe 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. • • • •

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

Forces are prepared, certified, deployed and sustained efficiently and effectively, and in accordance with agreed timeframes. • • • •

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.

• • • •

Joint Operations Command’s ability to identify and develop operational options and plans will be enhanced through continued development of its operational risk approach.

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.

• • • •

Further information on joint and combined operations in 2014‐15 is available online.

Table 3.28 (continued)

66 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.12 Capability Development

The Chief Capability Development, Lieutenant General John Caligari, AO, DSC, is responsible, as the sponsor, for developing capability proposals consistent with the Government’s 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. The plan lists the projects for government consideration (first and second pass) that make up the Unapproved Major Capital Investment Programme for future capabilities.

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

The Capability Development Group maintains close relationships with a range of stakeholders, including the Defence Materiel Organisation (renamed Capability Acquisition and Sustainment Group on 1 July 2015), capability managers and industry. In conjunction with industry, the Group is also responsible for the operation of the Rapid Prototyping, Development and Evaluation Programme, which encourages innovation in future defence capabilities.

During 2014‐15, 35 project approvals worth more than $7 billion were received from government. These approvals comprised six first pass, 20 second pass, and nine other types of approvals. Approved projects are below.

In the maritime environment:

• second pass approval for replacement of the ANZAC air search radar.

In the aerospace environment:

• second pass approval for deployable air traffic management and control systems

• second pass approval for additional aircraft, including two C-17A Globemaster III heavy airlift aircraft and two Multi Role Tanker Transport aircraft.

In the land environment:

• second pass approval for the acquisition of an integrated battlefield telecommunications network and the upgrade of current radios and facilities

• second pass approval to acquire the upgraded Austeyr EF88 rifle and ancillaries

• first pass approval for the mounted combat renaissance capability under the LAND 400 programme.

In the joint enabling environment:

• second pass approval for the Helicopter Aircrew Training System

• enhancements to Special Operations capability, including Supacat vehicles.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 67

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.30: Programme 1.12 deliverables

Deliverable Status

The provision of timely, accurate and high-quality advice on all aspects of capability development to the Secretary, CDF and government.

• • • • The Government gave approval for a total of 35 project submissions in 2014‐15. In addition, the Group provided a significant number of quality submissions to the Minister for Defence, the Secretary and the CDF. Accurate costings remain an issue.

The provision of independent analysis and contestability of capability proposals.• • • •

The Group provided contestability of capability proposals. Defence is implementing the First Principles Review recommendation to significantly enhance and strengthen the contestability process.

The development and management of an affordable and executable Defence Capability Plan. • • • •

The development of Defence capability investment proposals for consideration by the Government.• • • •

Defence achieved approval of 35 of the 39 Defence Capability Plan projects that were planned for government consideration in 2014‐15.

The publication of the public version of the Defence Capability Plan. • • • • Not applicable.

The Government announced that the next public Defence Capability Plan will be released in the context of the Defence White Paper process.

The management of the Key Defence Assets Register. • • • •

Complete a policy framework (Defence Instruction (General)) on the roles and responsibilities of Groups/Services for activities in the capability systems’ lifecycle.

• • • • Not applicable.

Consistent with the First Principles Review report, released on 1 April 2015, a new single end-to-end capability development function will be established.

Transition the Defence Capability Development Handbook to an authorised manual under the Defence Administrative Policy Framework.

• • • •

This transition is on track.

Develop and approve the improvement initiatives under Tranche 2 of the Capability Development Improvement Programme. • • • • Not applicable.

Consistent with the First Principles Review report, the ongoing work associated with the Capability Development Improvement Programme will be subsumed within the First Principles Review implementation.

68 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Deliverable Status

Under the Rapid Prototyping Development and Evaluation Programme, work collaboratively with Australia’s defence industry to develop innovative solutions to complex issues affecting capability and operations.

• • • •

Deliver independent test and evaluation advice, planning, support, trials and demonstrations to Defence throughout the capability systems’ lifecycle.

• • • •

Table 3.31: Programme 1.12 key performance indicators

Key performance indicator Status

Ensure capability investment proposals have realistic schedules and cost projections, comprehensive risk assessments and mitigation. • • • • The Government gave approval for a total of 35 project submissions in 2014‐15. In addition,

the Group provided a significant number of quality submissions to the Minister, the Secretary and the CDF. Accurate costings remain an issue.

Improve the corporate information management systems that support end-to-end visibility, planning, management and reporting of capability development.

• • • •

Progressively implement Tranche 2 Capability Development Improvement Programme initiatives to improve the timeliness and quality of capability submissions and reflect these improvements in extant and future capability development guidance and/or policy.

• • • • Not applicable.

Consistent with the First Principles Review report, the ongoing work associated with the Capability Development Improvement Programme will be subsumed within the First Principles Review implementation.

Provide objective advice to the Secretary and CDF.

• • • •

Submit timely proposals that are coherent, compelling and consistent with strategic guidance and affordable within the Defence Capability Plan.

• • • •

Table 3.30 (continued)

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 69

Programme 1.13 Chief Finance Officer

The Chief Finance Officer, Mr Phillip Prior, PSM, is responsible for giving strategic financial advice and information to the ministers, the Secretary, the CDF and Defence Senior Leaders. The Group provides a whole-of-Defence focus for planning, management, and monitoring of key deliverables to the Government, including Defence outputs, and for reporting on them.

The Chief Finance Officer Group is responsible for Defence financial control, governance and assurance and manages the Defence budget and financial policies, principles and practices in accordance with the Public Governance, Performance and Accountability Act 2013.

The Group drives Defence’s financial management and improvement programmes through standardised financial management approaches and a shared services model. The Defence Finance Shared Services Programme continues to evolve to accommodate the changing environment.

In 2014‐15, Defence’s Portfolio Budget Statements, Portfolio Additional Estimates Statements and financial statements were prepared and submitted within reporting deadlines. All whole-of-government reporting requirements were achieved. The Defence Accountable Authority Instructions were maintained and updated to reflect changes to financial policy and the forthcoming integration of the DMO into the Department of Defence.

Highlights of the Group’s achievements during the year included:

• coordination of the annual budget-cycle process and production of the 2015‐16 Portfolio Budget Statements and 2014‐15 Portfolio Additional Estimates Statements

• removal of the DMO as a ‘listed entity’ from Schedule 1 of the Public Governance, Performance and Accountability Rule 2014, and subsequent consolidation of DMO finances, delegations and Accountable Authority Instructions within Defence

• engagement of external providers to develop independent cost and schedule assurance of the Defence budget in support of the Defence White Paper

• development of a 10-year funding model based on a fully costed future force structure

• further development of the shared financial services capability across Defence to enable business improvement and increased efficiencies

• delivery of the Government’s deregulation agenda within Defence

• continued evaluation and improvement of processes and systems

• continued improvement of Defence’s financial statements.

70 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.32: Programme 1.13 deliverables

Deliverable Status

Defence financial statements

• • • •

Defence Portfolio Budget Statements

• • • •

Defence Portfolio Additional Estimates Statements

• • • •

Defence Accountable Authority Instructions

• • • •

Monthly/annual input to whole-of-government reporting

• • • •

Table 3.33: Programme 1.13 key performance indicators

Key performance indicator Status

Provide timely and high-quality financial advice to the Minister for Defence, the Secretary and the CDF. • • • •

Produce Defence’s budget, financial statements and the annual Defence Management and Finance Plan within agreed statutory timeframes.• • • •

Maintain unqualified financial statements.

• • • •

‘I felt privileged to be able to make it to the Australian War Memorial in Canberra with my mother and father-in-law for the Centenary of Anzac. Although it had been some time since I had attended a ceremony, this year’s was much larger than I expected, with attendees of all ages, genders, and races overflowing the parade grounds down Anzac Parade and over the grassed areas all around the Memorial. Among a crowd estimated at 120,000 people, it was special when the lights began to switch off and the huge crowd fell silent and focused on the many large screens erected. It was eerie, yet humbling, that so many people who had come to mark their respects could make so little noise. As the ceremony progressed, the sun rose, and the Last Post and Reveille sounded out through the crisp Canberra air. I not only thought about those who had made the ultimate sacrifice for my country, but remembered my own grandfather, who fought so valiantly in World War II.’

— Andrew Haese, Budget Management

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 71

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Programme 1.14 Defence Force Superannuation Benefits

The objective of Programme 1.14 is to administer and report member and employer contributions paid during the year to the Defence Force Retirement and Death Benefits (DFRDB) Scheme and the Military Superannuation and Benefits Scheme (MSBS). It accounts for the liability of these schemes plus the Defence Force Retirement Benefits (DFRB) Scheme. This programme includes payment of the MSBS retention benefit.

The DFRB Scheme, which does not have any contributing members, commenced in 1948 and only covers members or their dependants who were in receipt of a pension at the time the DFRDB Scheme commenced. The DFRDB Scheme was closed to new participants in 1991.

The MSBS commenced in 1991 and is available to all full-time members of the ADF.

All three schemes are managed on Defence’s behalf by ComSuper.

Since 1991, Defence has paid the MSBS retention benefit to eligible MSBS members after 15 years of continuous eligible service. The purpose of the retention benefit is to encourage members to serve until they have completed 20 years of service. Due to legislative amendments passed in 2005, the retention benefit is not available to members who enlisted after 6 October 2005.

Table 3.34: Programme 1.14 deliverables

Deliverable Status

Report on superannuation contributions and the movement in liabilities associated with the three military superannuation schemes. • • • •

Table 3.35: Programme 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. • • • •

Programme 1.15 Defence Force Superannuation Nominal Interest

The objective of Programme 1.15 is to administer nominal interest for the three military superannuation schemes— the DFRB Scheme, the DFRDB Scheme and the MSBS.

Table 3.36: Programme 1.15 deliverables

Deliverable Status

Report on superannuation nominal interest associated with the three military superannuation schemes. • • • •

Table 3.37: Programme 1.15 key performance indicators

Key performance indicator Status

Provide quality administration services for DFRB, DFRDB and MSBS nominal interest transactions. • • • •

72 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.16 Housing Assistance

The Defence Home Owner Scheme closed on 30 June 2010. It was 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 897 active loans at 30 June 2015 and a total of $1.2 million in subsidy payments during 2014‐15. The number of members receiving the Home Owner Scheme subsidy has continued to decline 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 completed 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. A panel of three home loan providers has been established to offer members home loans under the scheme. The three providers are the Australian Defence Credit Union, the Defence Bank and the National Australia Bank.

During 2014‐15, the scheme continued to attract a high level of interest from ADF members. A total of 6,012 applications were registered during the year and 5,610 members received subsidy certificates. Forty-seven per cent of members who applied for a subsidy certificate indicated that the scheme influenced their decision to remain in the ADF and 38 per cent indicated that it was a key factor in encouraging them to remain in the ADF.

At 30 June 2015, 19,946 members were receiving subsidy assistance under the scheme. In 2014‐15, the value of subsidy assistance paid to eligible members totalled $74.8 million. The total amount paid in subsidy assistance since the commencement of the scheme is $432.2 million.

The Department of Veterans’ Affairs met its obligations under the legislation and memorandum of understanding with Defence and provided effective service to the scheme.

Operational costs

Under the memorandum of understanding, the Department of Veterans’ Affairs is paid an annual management and service delivery fee for the administration of both schemes. In 2014‐15, the administration costs totalled $5.4 million (excluding GST).

Defence received a total of $15.1 million in remuneration from the three home loan providers during the year.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 73

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 3.38: Programme 1.16 deliverables

Deliverables Status

Provide ADF members with assistance to achieve home ownership that reflects the contemporary housing and home finance markets. • • • •

Provide progressively higher levels of assistance for eligible members serving beyond the critical career points of four, eight and 12 years of service.• • • •

Provision of quality services for the administration of the scheme, including the accurate and timely processing of member applications and issuing of subsidy certificates. • • • •

Table 3.39: Programme 1.16 key performance indicators

Key performance indicator Status

Members respond to and take up the scheme.

• • • •

Ensure that interest rates provided to ADF members by the home loan providers are competitive with other interest rates in the market.• • • •

Programme 1.17 Other Administered

Programme 1.17 comprises three elements:

• interest on government loans to fund the building of new accommodation, dividends and tax-equivalent payments received from Defence Housing Australia

• revenue received from science and technology royalties where royalties offset the departmental cost of an activity, to the extent there was no appropriation for the activity

• departmental returns to the Official Public Account arising from the sale of assets with an original purchase price in excess of $10 million.

Table 3.40: Programme 1.17 deliverable

Deliverable Status

Report on interest and other receipts transferred to the Official Public Account. • • • •

Table 3.41: Programme 1.13 key performance indicator

Key performance indicator Status

Accurate accounting and reporting on ‘Other Administered’.

• • • •

74 DEFENCE ANNUAL REPORT 2014‐15

FEATURE

Welcome home parades for those who served in Operation Slipper Australian Defence Force (ADF) members and Defence civilians who served on Operation Slipper came together to march in force earlier this year as official welcome home parades were held across the nation to mark the end of Australia’s longest military operation.

Parades were held in all capital cities on 21 March 2015 in honour of the 34,500 ADF personnel and Defence civilians who deployed to Afghanistan and the Middle East on Operation Slipper between 2001 and 2014.

Families, friends and members of the community lined city streets to show their appreciation to Operation Slipper veterans. The commemorative events also honoured those who did not make it home and those who returned with permanent wounds.

The Chief of Navy, Vice Admiral Tim Barrett, proudly watched on in Perth and said the parade was an opportunity to reflect on the many achievements that have been made over the course of Australia’s longest war.

‘We have also felt the deepest sorrow for the 41 Australian soldiers who paid the ultimate sacrifice and the hundreds of veterans who continue to live with physical and mental wounds’, he said.

The then Chief of Air Force, Air Marshal Geoff Brown, was Reviewing Officer at the march in Adelaide. He praised the efforts of all Australian personnel who deployed.

‘Your contribution has ranged from providing security, intelligence, surveillance and reconnaissance, airlift, combat support, development and construction projects to improve the lives of the Afghan people’, he said.

The then Chief of Army, Lieutenant General David Morrison, marched through the streets of Brisbane with the troops.

‘Working alongside the Afghan National Army and coalition forces, our Defence Force has assisted the Afghans to develop governance, construct and redevelop local infrastructure, and made significant ongoing improvements to security, stability and prosperity’, he said.

At the national parade in Canberra, the Prime Minister, the Hon Tony Abbott MP, thanked the thousands of Operation Slipper veterans for their service. He acknowledged the significant contribution made by Australia in Afghanistan.

‘The war ended not with victory, and not with defeat, but with hope: hope for a better Afghanistan, and for a safer world.

‘Afghanistan is a better country because Australia was there’, he said.

Although Operation Slipper has ended, ADF personnel continue to provide support and assistance through the NATO-led Resolute Support mission, which is focused on training, advising and assisting the Afghan National Defense and Security Forces and Afghan security institutions at the operational, institutional and ministerial levels.

Leading the Operation Slipper parade in Sydney are (left to right) Deputy Chief of Army Major General Peter ‘Gus’ Gilmore, AO, DSC; Commander Australian Fleet Rear Admiral Stuart Mayer, CSC; and Bar and Deputy Air Commander

Australia, Air Commodore Tim Innes.

OUTCOME 1

03 CH

DEFENCE ANNUAL REPORT 2014‐15 75

REFELECTIONS ON THE OPERATION SLIPPER WELCOME HOME PARADES

‘It was a great opportunity for the

Australian public to thank the ADF and other government agencies for all the work that has been done under Operation Slipper.’

Genevieve Mortiss,

Maritime Operations Analyst, DSTO

‘It was a good way to show exactly what

we have accomplished as a country and as individuals and to pay our respects to those who didn’t come back.’ Corporal Elizabeth Flook,

Directorate of Soldier Career Management, Army, Canberra

‘I was really proud to serve my country and my family back home. After I saw the ramp ceremonies, it meant a lot to see Australians pay their respects.’ Flight Lieutenant Gerard Bonaventura, Air Space Controller, 452 Squadron, RAAF Townsville

‘It was good to march in Perth and get

the recognition and understanding of what we did on Operation Slipper.’ Chief Petty Officer Buffer Grant Peck, HMAS Sirius

CHAPTER FOUR

4

Outcome 2

OUTCOME 2

04 CH

DEFENCE ANNUAL REPORT 2014‐15 77

Outcome 2: The advancement of Australia’s strategic

interests through the conduct of military operations and other tasks as directed by the 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, conducting, 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 (Programme 2.1) and those that support wider interests (Programme 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 programmes 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 fully met.

Table 4.1: Total cost of Defence Outcome 2[1]

2014‐15 budget estimate[2] $’000

2014‐15 revised estimate[3] $’000

2014‐15 actual result $’000

Variation

$’000 %

Programme 2.1 Operations Contributing to the Security of the Immediate Neighbourhood

Revenue from other sources ‐ ‐ ‐ ‐ ‐

Departmental outputs 3,008 4,022 7,290 3,268 81

Programme 2.2 Operations Supporting Wider Interests

Revenue from other sources 3,269 3,827 10,452 6,625 173

Departmental outputs 349,721 784,980 510,818 ‐274,163 ‐35

Total resourcing

Total departmental outputs 352,729 789,002 518,108 ‐270,895 ‐34

Total departmental revenue from other sources 3,269 3,827 10,452 6,625 173

Equity injection ‐ ‐ ‐ ‐ ‐

Total resources for Outcome 2 355,998 792,829 528,560 ‐264,270 ‐33

Notes

1. This table excludes capital payments for outcomes.

2. As published in the Portfolio Budget Statements 2014‐15, Table 37.

3. As published in the Portfolio Budget Statements 2015‐16, Table 38.

78 DEFENCE ANNUAL REPORT 2014‐15

Table 4.2: Net additional cost of operations

2014‐15 budget estimate[1] $m

2014‐15 revised estimate[2] $m

2014‐15 actual result $m

Variation $m

Operation Astute ‐ ‐ 0.1 0.1

Operation Slipper[3] 240.8 267.5 252.5 ‐15.0

Operation Manitou 52.0 52.0 39.4 ‐12.6

Operation Accordion 57.0 120.2 123.5 3.3

Operation Highroad ‐ 82.4 40.5 ‐42.0

Operation Resolute[4] 59.7 59.7 45.0 ‐14.7

Operation Okra ‐ 260.8 159.4 ‐101.3

Operation Anode 0.1 0.1 0.0 ‐0.0

Operation Southern Indian Ocean 3.0 3.0 1.1 ‐1.9

Enhanced Force Protection in Afghanistan[3] 16.2 16.2 ‐ ‐16.2

Defence Support to 2014 G20 Summit 8.0 8.0 3.5 ‐4.5

Total net additional costs 436.8 869.9 665.0 ‐204.9

Notes

1. As published in the Portfolio Budget Statements 2014‐15, Table 4.

2. As published in the Portfolio Budget Statements 2015‐16, Table 4.

3. Government supplementation for the Force Protection Review is included under Operation Slipper (Outcome 2) and Enhanced Force Protection in Afghanistan (Outcome 1).

4. Includes funding for expanded activities under Operation Sovereign Borders.

‘I was one of the many who were fortunate enough to have received a ballot ticket to attend the Anzac Day Centenary Dawn Service at Gallipoli. The great sacrifice made by the diggers landing at Anzac Cove on the morning of 25 April 1915 was so graphically represented—with a flotilla of naval ships heading towards the cove through the sea haze, extracts from the diggers’ letters on their first impressions on the landing being read, and being in the presence of the sheer steepness and harshness of the Gallipoli terrain. This is a memory that will remain with me forever.’

— Troy McKenzie, Defence Security Authority

OUTCOME 2

04 CH

DEFENCE ANNUAL REPORT 2014‐15 79

Table 4.3: Net additional cost of operations from 1999‐2000 to 2018‐19

1999‐00 to 2013‐14 actual result

$m

2014‐15 actual result $m

2015‐16 budget estimate $m

2016‐17 forward estimate $m

2017‐18 forward estimate $m

2018‐19 forward estimate $m

Total $m

Operation Astute 4,311.9 0.1 ‐ ‐ ‐ ‐ 4,312.0

Operation Bel Isi 47.7 ‐ ‐ ‐ ‐ ‐ 47.7

Operation Slipper 6,924.8 252.5 121.9 103.9 ‐ ‐ 7,403.1

Operation Manitou ‐ 39.4 43.2 2.2 0.5 ‐ 85.3

Operation Accordion ‐ 123.5 191.0 1.4 0.6 ‐ 316.5

Operation Highroad ‐ 40.5 115.1 11.3 7.9 ‐ 174.9

Operation Resolute[1] 175.0 45.0 48.7 5.7 ‐ ‐ 274.4

Operation Catalyst 2,364.5 ‐ ‐ ‐ ‐ ‐ 2,364.5

Operation Okra ‐ 159.4 390.8 17.5 10.0 ‐ 577.7

Operation Anode 355.2 ‐ ‐ ‐ ‐ ‐ 355.2

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 1.1 ‐ ‐ ‐ ‐ 11.9

Enhanced Force Protection in Afghanistan

540.0 ‐ ‐ ‐ ‐ ‐ 540.0

Defence Support to 2014 G20 Summit

0.1 3.5 ‐ ‐ ‐ ‐ 3.6

Total net additional costs

14,861.5 665.0 910.7 142.1 19.1 ‐ 16,598.3

Sources of funding for operations

Government supplementation

13,230.7 660.3 910.7 142.1 19.1 ‐ 14,962.8

Department of Foreign Affairs and Trade

9.1 ‐ ‐ ‐ ‐ ‐ 9.1

Department of Defence (absorbed)

1,621.7 4.7 ‐ ‐ ‐ ‐ 1,626.4

Total cost 14,861.5 665.0 910.7 142.1 19.1 ‐ 16,598.3

Note

1. Includes funding for expanded activities under Operation Sovereign Borders.

80 DEFENCE ANNUAL REPORT 2014‐15

PROFILE: Mark McKenzie

Helping out after Cyclone Pam As part of a mission led by the Department of Foreign Affairs and Trade, Headquarters Joint Operations Command (HQJOC) executed and coordinated a major humanitarian operation in Vanuatu in March and April 2015.

Days before the impact of the 14 March cyclone, HQJOC Domestic and Regional Operations Branch personnel were deep into the planning for an emerging humanitarian relief effort.

Royal Australian Navy Lieutenant Mark McKenzie, who was part of a small planning group, said the planning effort brought together Defence and government stakeholders to prepare for a range of possible scenarios.

Looking back on the impact of Cyclone Pam, a category five storm, on Vanuatu and surrounding islands, Mark emphasised that an effective HQJOC response to any emergency or disaster required an early appreciation of the situation.

‘Deploying and coordinating any response effort is just one part of the puzzle. The Chief of Joint Operations relies on local ADF commands to provide the resources required for the initial response and then to identify potential commitment of non-local Defence assets’, Mark said.

‘Operation Pacific Assist came on the back of a busy three-month period that included coordination of support to bushfires in South Australia, Victoria and Western Australia, responding to cyclones Lam and Marcia in northern Australia and then the devastating earthquake in Nepal.

‘As the deputy lead planner, Domestic and Regional Operations, my role was to assist in the coordination efforts of all branches and enablers to HQJOC in the development of the concept of operations.

‘This included things like discussing the availability of assets within the Services, evaluation of possible response options, coordinating information through key staff and drafting of task orders.’

From 15 March through to mid-April, the ADF contributed to the whole-of-government response to assist more than 13,000 people with humanitarian relief.

More than 500 soldiers, sailors and aircrew deployed during Operation Pacific Assist, providing help across the archipelago and significantly assisting the recovery process.

ADF troops played a major part in the immediate relief effort, repairing key infrastructure, restoring basic services and delivering more than 115 tonnes of vital humanitarian assistance and disaster relief support throughout Vanuatu.

Through their efforts, access to clean water was restored, schools, community buildings and medical facilities were repaired, and remote communities had access to food and shelter.

ADF personnel also assisted in critical repairs to Port Vila Central Hospital, 27 schools, five clinics and 13 road and infrastructure sites.

‘Being a staff officer integrated with the Operations Staff at HQJOC has been an incredible professional experience’, Mark said.

‘It’s an amazing job when you consider we plan for just about every eventuality, but you’re always prepared for the unexpected to occur.’

OUTCOME 2

04 CH

DEFENCE ANNUAL REPORT 2014‐15 81

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Programme 2.1 Operations Contributing to the Security of the Immediate Neighbourhood Defence undertakes a variety of operations in order to preserve the security and stability in our region.

Operation Gateway, which occurs up to eight times a year, is an ongoing 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 an ongoing maritime surveillance operation to support Pacific Island countries in fisheries law enforcement in the South-West Pacific. There are up to four AP-3C Orion aircraft deployments per year to the region, to coincide with operations led by the Forum Fisheries Agency, which is based in Honiara, Solomon Islands.

Operation Render Safe is an enduring operation to dispose of explosive remnants of war in Pacific island nations. In November 2014, there was a significant operation on Bougainville, which disposed of more than 16 tonnes of explosives.

Operation Pacific Assist was an ADF deployment supporting humanitarian assistance and disaster relief in Vanuatu and Solomon Islands following Cyclone Pam. A significant Defence contribution included a major Navy ship, a number of Air Force transport and surveillance aircraft, Army rotary wing aircraft, and personnel from the three Services providing a Joint Task Force and heavy engineering support in disaster-affected areas.

Operation Nepal Assist was an ADF deployment supporting humanitarian assistance and disaster relief in Nepal following the earthquake in April 2015. ADF involvement included a strategic airlift of humanitarian aid stores, evacuation of affected Australian and approved foreign nationals and a small team deployed in support of the Australian Embassy.

Table 4.4: Programme 2.1 deliverables

Deliverable Status

Operation Commenced Objective

Gateway 1981 Conduct northern Indian Ocean and South China Sea

maritime surveillance patrols. • • • •

Solania 1988 Conduct South-West Pacific maritime surveillance patrols.

• • • •

Render Safe 2011 Provide enduring explosive ordnance disposal support to

the nations of the South West Pacific. • • • •

Southern Indian Ocean 2014 Contribute to the search operations for the missing Malaysia Airlines flight MH370. • • • •

Saville 2014 Provide responses to non-allied foreign military activity in

Australia’s maritime approaches. • • • •

Pacific Assist 2015 Support the whole-of-government contribution to the

humanitarian and disaster relief operations as requested by the governments of Vanuatu and Solomon Islands.

• • • •

Nepal Assist 2015 Support the whole-of-government contribution to the

humanitarian and disaster relief operations as requested by the Government of Nepal.

• • • •

82 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 4.5: Programme 2.1 key performance indicators

Key performance indicator Status

ADF operations meet their stated objective within the Government’s guidance. • • • •

ADF forces are effectively deployed and sustained.

• • • •

ADF forces are withdrawn for reconstitution when they are no longer required. • • • •

Programme 2.2 Operations Supporting Wider Interests On 1 January 2015, Operation Highroad superseded Operation Slipper as the ADF contribution to the stabilisation and security of Afghanistan. Joint Operations Command transitioned its forces from a combat-focused mission to one that continues to provide directed capabilities and forces to the NATO-led Resolute Support mission. This contribution is delivered through the mentoring of the Afghan National Army personnel of 205 Corps in Kandahar and Officer Cadets at the Afghan National Army Officer Academy. Mentoring relationships have also been established with Afghan Special Forces and a small number of operational-level Afghan headquarters.

As part of a broader international humanitarian effort and whole-of-government approach, Joint Operations Command executed air operations and land force training as part of Operation Okra. These operations have degraded Daesh and protected Australia’s national interests. Through the execution of the ADF’s Build Partner Capacity mission, Iraqi land forces have increased their ability to conduct brigade-level offensive operations.

Under Operation Manitou, the Navy maintained the deployment of a major fleet unit in support of maritime counter-terrorism, counter-narcotics and counter-piracy operations conducted by the Combined Maritime Force. Also in support of the Combined Maritime Force and the improvement of maritime security in the Middle East and along the east coast of Africa, Australia routinely commands Combined Task Force 150, which is responsible for the maritime counter-terrorism mission. The next Australian rotation will begin in November 2015.

HMAS Success was the first Navy ship to be assigned to a NATO operation—the counter-piracy operation Ocean Shield in the Gulf of Aden and Indian Ocean for two weeks from 23 March 2015. HMAS Success also achieved key national and Defence objectives in the commemoration of the Centenary of Anzac.

In support of a rules-based global security order, Defence continued to provide support to three United Nations 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.

During 2014‐15, ADF members continued to perform key roles in United Nations efforts to maintain peace and security in highly volatile areas such as Afghanistan, the Golan Heights, the Sinai and South Sudan. The ADF role included supporting free and fair elections in Afghanistan; directly contributing to peace-monitoring efforts in Israel, Lebanon and the Sinai Peninsula; contributing to reform in South Sudan; and assisting in humanitarian efforts to provide basic services and subsistence to those in need. It is envisaged that Defence will continue to support these United Nations missions and the Multinational Force and Observers in the Sinai in their critically important and globally significant work.

Operation Hawick was the ADF contribution to the whole-of-government Operation Bring Them Home in support of dealing with the aftermath of the Malaysia Airlines flight MH17 disaster in eastern Ukraine. Joint Operations Command supported the Combined Inter-Agency Task Force charged with carrying out the International Mission for Protection of Investigation, and supported the repatriation of victims of the disaster.

OUTCOME 2

04 CH

DEFENCE ANNUAL REPORT 2014‐15 83

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 4.6: Programme 2.2 deliverables

Deliverable Status

Operation Commenced Objective

Paladin 1956 Contribute to the United Nations Truce Supervision

Organization in the Middle East. • • • •

Mazurka 1982 Contribute to the Multinational Force and Observers in

the Sinai.• • • •

Slipper 2001 Support Afghanistan’s security, development and

governance. The International Security Assistance Force Mission in Afghanistan provided under Operation Slipper ceased on 31 December 2014.

• • • •

Palate II 2005 Provide a military liaison officer to the United Nations

Assistance Mission in Afghanistan.• • • •

Aslan 2011 Contribute to the United Nations mission to the Republic

of South Sudan. • • • •

Manitou 2014 Contribute to international maritime security operations

in the Middle East Area of Operations and international counter-piracy operations in the Persian Gulf, the Gulf of Aden, the Red Sea and parts of the Indian Ocean.

• • • •

Okra 2014 Conduct operations in support of the coalition response

to the Iraq crisis. • • • •

Accordion 2014 Provide support to operations Slipper and Manitou from

within the Gulf States• • • •

Highroad 2015 Support Afghanistan’s security, development and

governance, through a contribution to the NATO-led ‘train, advise, assist’ mission.

• • • •

Table 4.7: Programme 2.2 key performance indicators

Key performance indicator Status

ADF operations meet their stated objective within the Government’s guidance. • • • •

ADF forces are effectively deployed and sustained.

• • • •

ADF forces are withdrawn for reconstitution when they are no longer required. • • • •

84 DEFENCE ANNUAL REPORT 2014‐15

FEATURE

ADF sends support to disaster victims in Vanuatu and Nepal The Australian Defence Force’s (ADF) response to the devastation brought by Cyclone Pam to Vanuatu in March 2015 saw more than 500 soldiers, sailors and aircrew deployed to provide assistance in the wake of the category five storm.

The ADF distributed 115 tonnes of vital humanitarian stores throughout Vanuatu. Through the efforts of ADF personnel, access to clean water was restored, schools, community buildings and medical facilities were repaired, and remote communities regained access to food and shelter.

The initial ADF response included the rapid delivery of Australian aid and emergency personnel using Air Force C-17A Globemaster strategic transport aircraft and C-130J Hercules aircraft. Air Force AP-3C Orion maritime patrol aircraft also provided reconnaissance support over Vanuatu and Solomon Islands to give emergency officials a clearer picture of the damage caused by the cyclone.

In addition to the support by Australian agencies, including the ADF, military support was provided by French, British and New Zealand defence forces. The ADF effectively coordinated its response efforts with emergency officials and other nations throughout the affected area.

The amphibious operations ship HMAS Tobruk deployed with Army engineers, vehicles and additional aid. On arrival, Tobruk provided the maritime base for much of the ADF’s high-tempo post-disaster recovery operations in the outer islands. Tobruk offloaded tonnes of stores using two LARC-V amphibious cargo vehicles, two LCM-8 landing craft and an embarked Navy MRH-90 multi-role helicopter.

Army engineers made a significant contribution to the citizens of the worst-affected southern

islands of Tanna and Erromango. Engineers provided immediate temporary shelter, access to clean water, and debris clearance and repairs to medical facilities.

The Air Force flew more than 260 sorties in support of the mission. Air Force C-17A and C-130J aircraft and Army Black Hawk helicopters conducted evacuations of people from Vanuatu and flew aid, stores and personnel for the ADF, the Department of Foreign Affairs and Trade and other responding agencies, while Air Force KA350 King Air tactical aircraft provided inter-island transport.

A month later, following the devastating earthquake in Nepal on 25 April 2015, the ADF delivered more than 13 tonnes of Australian aid and evacuated 106 Australian and other foreign nationals to Thailand.

Using two Air Force C-17A Globemaster III strategic airlift aircraft, aid supplied by the Department of Foreign Affairs and Trade was flown into Kathmandu’s Tribhuvan International Airport. Civilian evacuees then boarded the aircraft and were flown out to Bangkok.

The Australian aid was delivered in cooperation with Nepalese aviation authorities, who managed the congested airport in Kathmandu following the earthquake.

The crew of HMAS Tobruk farewell members of the community of Dillon’s Bay, Taféa province, Vanuatu, during Operation Pacific Assist 2015.

OUTCOME 2

04 CH

DEFENCE ANNUAL REPORT 2014‐15 85

Iraq

Nepal

Northern Territory

Queensland

Vanuatu

IN August 2014,

aN RAAF C-130J Hercules delivered

15 bundles of aid to isolated civilians in the northern

Iraqi town of Amirli

In April and May 2015, two C-17A Globemasters delivered

15 tonnes of aid following the devastating earthquakes in NEPAL

In November 2014, aN RAAF C-130J Hercules delivered

32 tonnes of aid to displaced civilians

on Mount Sinjar in northern Iraq

In April 2015,

500 ADF personnel Delivered

115 tonnes

of vital HUMANITARIAN STORES following

Cyclone Pam

In February 2015, following

Cyclone Lam, a C17-A Globemaster delivered vital aid to

three affected communities on

Elcho Island and in Arnhem Land

In February 2015, following Cyclone Marcia, the ADF provided the following humanitarian assistance in northern Queensland

aN RAAF AP-3C Orion maritime patrol aircraft and a KA350 King Air provided wide area surveillance of the region

19 Army Reservists from 11th Brigade provided clearance AND clean -up assistance in

Yeppoon

200 soldiers from Townsville’s 3rd Brigade provided engineering support

CHAPTER FIVE

5

Outcome 3

OUTCOME 3

05 CH

DEFENCE ANNUAL REPORT 2014‐15 87

Outcome 3: Support for the Australian community and

civilian authorities as requested by the Government

Summary

Outcome 3 focuses on the ability of the ADF to contribute to national support tasks in Australia (Programme 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 contributions 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 of Defence Outcome 3[1]

2014‐15 budget estimate[2] $’000

2014‐15 revised estimate[3] $’000

2014‐15 actual result $’000

Variation

$’000 %

Programme 3.1: Defence Contribution to National Support Tasks in Australia

Revenue from other sources ‐ ‐ ‐ ‐ ‐

Departmental outputs 67,740 67,740 42,058 ‐25,682 ‐38

Total resourcing

Total departmental outputs 67,740 67,740 42,058 ‐25,682 ‐38

Total departmental revenue from other sources ‐ ‐ ‐ ‐ ‐

Total resources for Outcome 3 67,740 67,740 42,058 ‐25,682 ‐38

Notes

1. This table excludes capital payments for outcomes.

2. As published in the Portfolio Budget Statements 2014‐15, Table 40.

3. As published in the Portfolio Budget Statements 2015‐16, Table 41.

88 DEFENCE ANNUAL REPORT 2014‐15

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Programme 3.1 Defence Contribution to National Support Tasks in Australia National support tasks undertaken by the ADF include maintaining 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 Maritime Border Command through Operation Resolute, providing maritime surveillance and response assets that are routinely tasked in accordance with the Government’s direction.

Operation Parapet, the ADF’s contribution to security and response for the G20 Leaders’ Summit in Brisbane, included ground security forces and F/A-18 aircraft patrolling the airspace over the meeting venue. Additionally, ADF maritime assets intercepted a Russian task group in the Coral Sea.

In January 2015, RAAF Edinburgh provided fuel and water for contracted fire-fighting aircraft to Country Fire Service personnel responding to a 180-kilometre fire front in the Adelaide hills.

In February 2015, Army Reserve personnel from 13th Brigade were called in to help Western Australian emergency officials respond to a major bushfire in the Northcliffe region of south-west Western Australia. RAAF Pearce was opened to civil aircraft to allow refuelling and access to water resupply.

Also in February, Cyclone Lam damaged more than 100 houses in three communities on Elcho Island and across Arnhem Land. Following a request from the Northern Territory Government, an RAAF C-17A Globemaster III was deployed to airlift stores and supplies for a 300-bed tent camp to the Northern Territory.

In response to Cyclone Marcia crossing the Queensland coast on 20 February 2015, Emergency Management Queensland officials requested support from the ADF for post-disaster assessment and recovery operations in Yeppoon and Rockhampton. An RAAF AP-3C Orion maritime patrol aircraft and an RAAF King Air conducted wide area surveillance of cities, towns, infrastructure and roads while Army personnel, supported by MRH-90 Taipan multi-role helicopters, conducted clean-up and repair work in Rockhampton, Byfield, Yeppoon and Biloela.

Table 5.2: Programme 3.1 deliverables

Deliverable Status

Operation Commenced Objective

Resolute 2006 Contribute to the whole-of-government maritime surveillance and response. • • • •

Parapet 2013 Contribute security assistance to the whole-of government effort as host of the G20 Summit in 2014.• • • •

Hawick 2014 Contribute to the whole-of-government Operation Bring Them Home, the search and recovery effort for Malaysia Airlines flight MH17. • • • •

Table 5.3: Programme 3.1 key performance indicators

Key performance indicator Status

Defence’s contribution to national support tasks in Australia meets government directives. • • • •

Defence’s response to requests for Defence Force aid to the civil authority is effectively managed, sustained and reported.• • • •

Defence’s response to requests for Defence assistance to the civil community is effectively managed, sustained and reported. • • • •

OUTCOME 3

05 CH

DEFENCE ANNUAL REPORT 2014‐15 89

FEATURE

Defence helps out during Australia’s high-risk weather season The Australian Defence Force (ADF) continued to prove its responsiveness to local emergencies across the 2014‐15 high-risk weather season by providing support to civil authorities during bushfires in Western Australia’s south-west and near Adelaide, and cyclones in the Northern Territory and on the central Queensland coast.

In January, RAAF Edinburgh supported South Australian Country Fire Service personnel responding to a 180-kilometre fire front in the Adelaide Hills by providing fuel and water for contracted fire-fighting aircraft.

In February 2015, Army Reserve personnel from 13th Brigade were called in to help Western Australian emergency officials respond to a major bushfire in the Northcliffe region of south-west Western Australia. RAAF Pearce was opened to civil aircraft to allow refuelling and access to water resupply.

Later in February, concurrent cyclones passed across the Northern Territory and Queensland coastlines, isolating remote communities and causing flood and wind damage.

Cyclone Lam damaged more than 100 houses in three communities on Elcho Island and in Arnhem Land. Following a request from the Northern Territory Government, an RAAF C-17A Globemaster III was deployed to RAAF Richmond to airlift stores and supplies for a 300-bed tent camp in the Northern Territory.

In response to Cyclone Marcia, Emergency Management Queensland requested support from the ADF with post-disaster assessment and recovery operations in Yeppoon and Rockhampton. An RAAF AP-3C Orion maritime patrol aircraft and a King Air conducted wide-area surveillance of cities, towns, infrastructure and roads, while approximately 19 Army Reservists from a Rockhampton-based 11th Brigade unit provided

debris clearance and clean-up assistance at Yeppoon State High School.

These troops were followed by the Engineering Support Group, a task group of about 200 soldiers from Townsville’s 3rd Brigade, along with specialist liaison and command staff supported by Taipan multi-role helicopters, which were used for reconnaissance and liaison tasks.

During the three-week mission, the Engineering Support Group completed the following tasks:

• clean-up and clearance at 15 schools in Rockhampton, Byfield and Yeppoon

• clean-up and clearance at the Rockhampton Botanical Gardens, the Rockhampton Zoo and the Kershaw Botanical Gardens, all of which suffered severe damage in the cyclone

• clearance of more than 5 kilometres of strategic and tactical firebreaks in the Byfield area

• clean-up and clearance of 18 major road culverts in Rockhampton and Biloela

• clean-up, clearance and minor repairs at a Byfield wildlife sanctuary.

Australian Army engineers of the 3rd Combat Engineer Regiment use a JD450 Bulldozer and chainsaws to clear debris in the aftermath of Cyclone Marcia, 25 February 2015. They were part of the emergency support force operating in the

remote community of Byfield near Yeppoon, Queensland.

CHAPTER SIX

6

Defence Materiel Organisation

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 91

Overview

Review by the Chief Executive Officer

The 2014‐15 Annual Report represents the last for the Defence Materiel Organisation (DMO) as it was officially delisted as a listed entity on 1 July 2015 and transitioned to form the Capability Acquisition and Sustainment Group within the Department of Defence. Given this move from a separate listed entity, this overview reflects on the many achievements brought about by the dedicated people of the DMO, who have worked tirelessly over many years to equip and sustain the ADF.

In reviewing what the DMO has achieved over the past 15 years, it is clear that the organisation has made a significant difference in ensuring that the ADF has been well supported and that the required equipment and sustainment support to be combat ready has been available. There are many success stories that DMO staff can proudly reflect on, and they all have one common thread—they all improved Australia’s defence capability and the safety of our warfighters. Since being prescribed in 2005, the DMO has delivered more than 170 projects, and for the most part those projects were delivered within budget and to the required capability level.

Recent examples of ADF capability enhancements include the Air-to-Air Refueller and Wedgetail, both of which are currently being used with significant effect in operations overseas. By all accounts, these are the platforms of choice for our allies. Both capabilities were previously on the ‘Projects of Concern’ list; however, thanks to the collective expertise and determination of many within the DMO and our industry partners, these projects were remediated and now provide the ADF with world-class capabilities. Another worthy example is the Australian-designed CEA Technologies phased-array radar, currently installed on our Anzac class frigates.

The Government recently gave second pass approval for LAND 2072 Phase 2B Battlespace Communications Systems to provide the ADF with the next generation of battlespace telecommunications network capability. Approval of this project is a critical milestone in achieving a modern, networked Army.

The JP 2048 Phase 4A/4B Amphibious Deployment and Sustainment project will provide the ADF with an increased amphibious deployment and sustainment capability through the acquisition of two landing helicopter docks (LHDs) and associated supplies and support. One of those vessels—HMAS Canberra—has already been delivered and commissioned. Together, these 27,000-tonne LHDs will be able to land a force of more than 2,000 personnel by helicopter and watercraft, along with all their weapons, ammunition, vehicles and stores.

We have been equally effective at sustaining capability and there are many examples where we have driven effective and innovative sustainment solutions, in particular by extending the life of various air, land and maritime fleets. The Smart Sustainment Reform Programme has resulted in approximately $2 billion worth of savings since 2009, while the introduction of performance-based contracting has resulted in significant improvements in sustainment efficiency and productivity by industry. Our Anzac and guided missile frigate (FFG) naval vessels are benefiting from this innovative business model, as is our AIR9000 helicopter training programme.

Aside from project and sustainment achievements, work by our commercial group staff in areas such as contracting, procurement, legal, industry engagement, reform and business operations provided a solid foundation for the DMO, allowing acquisition and sustainment functions to operate successfully.

Continuous reform has always been important to the DMO and the First Principles Review reinforces this reform agenda.

Finally, the achievements of the past years would not have been possible without the tremendous DMO staff who have contributed so much over the years. My thanks to all current and previous DMO staff for their hard work, dedication and commitment; the DMO has delivered great outcomes, which all DMO staff should be proud of.

92 DEFENCE ANNUAL REPORT 2014‐15

DMO role and functions During 2014‐15, the DMO was responsible for the acquisition and sustainment of the materiel elements of capability for the ADF.

Performance against DMO strategic priorities Driven by four strategic priorities in 2014‐15, the DMO continued to provide the materiel equipment and sustainment elements of capability for the ADF in an effective, efficient, economical and safe manner. Its strategic priorities ensured that the focus of the DMO remained on sustainably delivering the outcomes agreed with capability managers, without compromising safety and within available resourcing. The four strategic priorities were:

1. Deliver acquisition and sustainment more efficiently

The DMO’s achievement of operating more effectively is reflected in its successful delivery of an increased acquisition and sustainment workload with 464 fewer people in its workforce and $28.249 million less operating expenditure than in 2013‐14.

2. Interact with reviews

The DMO engaged proactively with the First Principles Review and turned its focus to implementation of a new operating model and smart buyer function.

3. Streamline internal processes

Significant progress was made on streamlining and simplifying the DMO’s internal processes under the ‘One Quality Management System’ reform programme, as well as improving procurement processes, and a greater reliance on the delivery of enabling support functions under the Defence shared service model.

4. Reform the DMO

The DMO’s continuous reform programme has been focusing on more effective work outcomes, enabled by increased productivity from rationalising and streamlining internal processes while also pursuing opportunities to better automate work practices.

DMO financial performance The DMO receives approximately 92 per cent of its funding from Defence under agency agreements. The remaining 8 per cent of its funding is provided through a direct appropriation and own-source revenue. The DMO’s audited 2014‐15 financial statements are included in Volume Two of this report.

An assessment of DMO financial performance in 2014‐15 against budget estimates is provided online.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 93

Table 6.1: DMO resource statement 2014‐15

Actual available appropriations for 2014‐15 $’000

Payments made 2014‐15 $’000

Balance remaining 2014‐15 $’000

(a) (b) (a‐b)

Ordinary annual services[1,2]

Departmental appropriation

Departmental appropriation[1,2] 879,592 879,592 ‐

Total departmental appropriation A 879,592 879,592 ‐

Special accounts (departmental and administered)

Opening balance 241,773 ‐ ‐

Appropriation receipts[1,2] 879,592 ‐ ‐

Appropriation receipts ‐ ‐ ‐

‐ other agencies[3] 11,712,220 ‐ ‐

‐ adjustment for other agencies[3,4] 159,397 ‐ ‐

Non-appropriation receipts to special accounts 894 ‐ ‐

Adjustment for non-appropriation receipts to special accounts[5]

338,331 ‐ ‐

Interest[6] ‐ ‐ ‐

Payments made[7] ‐ 13,115,982 ‐

Appropriation reduction ‐ ‐ ‐

Closing balance ‐ ‐ 216,225

Total special accounts B 13,332,207 13,115,982 216,225

Less appropriations drawn from annual or special appropriations above and credited to special accounts

C 879,592 879,592 ‐

Total resourcing and payments (A+B‐C) 13,332,207 13,115,982 216,225

Notes

1. Appropriation Bill (No. 1) 2014‐15 and Appropriation Bill (No. 3) 2014‐15.

2. Reported as $879.683 million estimated actual in the Portfolio Budget Statements 2015‐16. The variation is because the planned appropriation reduction will not occur until the relevant Appropriation Acts are repealed by Parliament.

3. Appropriation receipts from Defence credited to DMO’s special accounts.

4. Adjustment is variance between estimated actuals as at Portfolio Budget Statements 2015‐16 and actual available appropriations for 2014‐15 as at 30 June 2015.

5. Adjustment is variance between estimated actuals as at Portfolio Budget Statements 2015‐16 and actual receipts for 2014‐15 as at 30 June 2015.

6. Administered interest received from overseas bank accounts which is remitted to the Official Public Account.

7. Excludes GST.

94 DEFENCE ANNUAL REPORT 2014‐15

Appropriations and other resources

The DMO workforce and operating expenses (along with industry programmes) are directly appropriated by government through Appropriation Bill (No. 1). The DMO has flexibility over the allocation of its workforce across the various programmes it delivers. Variations for programmes from the revised budget to the actual result may reflect ongoing changes to activity levels prescribed by Defence, budgeted cash flow adjustments for movements in foreign exchange rates or delivery of programmes with fewer resources.

Programmes 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. Programme 1.3 was funded largely through a direct appropriation.

Table 6.2: Budgeted expenses and resources for DMO outcome

DMO outcome: Contributing to the preparedness of the Australian Defence organisation through acquisition and through-life support of military equipment and supplies

Revised budget 2014‐15 $’000

Actual result 2014‐15 $’000

Variation[1] $’000

Programme 1.1: Management of Capability Acquisition

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 and 3) 295,258 187,113 ‐108,145

Special accounts 5,628,793 5,316,001 ‐312,792

Expenses not requiring appropriation 7,191 4,858 ‐2,333

Subtotal for Programme 1.1 5,931,242 5,507,972 ‐423,270

Programme 1.2: Management of Capability Sustainment

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 and 3) 487,238 501,743 14,505

Special accounts 5,682,951 5,395,063 ‐287,888

Expenses not requiring appropriation 15,259 13,026 ‐2,233

Subtotal for Programme 1.2 6,185,448 5,909,832 ‐275,616

Programme 1.3: Provision of Policy Advice and Management Services

Departmental expenses

Ordinary annual services (Appropriation Bill Nos 1 and 3) 97,096 122,994 25,898

Special accounts 894 0 ‐894

Expenses not requiring appropriation 11,261 10,774 ‐487

Subtotal for Programme 1.3 109,251 133,768 24,517

Total departmental expenses for DMO outcome 12,225,941 11,551,573 ‐674,370

Note

1. The variation is between the actual result as disclosed in the DMO’s audited 2014‐15 financial statements and the revised budget published in the Portfolio Additional Estimates Statements 2014‐15.

Further information on the DMO’s financial performance is available online.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 95

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 programmes:

• Programme 1.1: Management of Capability Acquisition

• Programme 1.2: Management of Capability Sustainment

• Programme 1.3: Provision of Policy Advice and Management Services.

Programme 1.1 Management of Capability Acquisition Through Programme 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. At 30 June 2015, the DMO was managing 206 active major and minor projects worth $96.3 billion in total.

Programme 1.1 accounted for around 48 per cent of the DMO’s expenses in 2014‐15. This generates around $4.8 billion of military assets for Defence; non-capitalised project expenses were about $0.6 billion.

Table 6.3: Programme 1.1 deliverables for top 30 major projects

Deliverable Performance summary

General Manager Joint, Systems and Air

Aerospace Systems

Growler Airborne Electronic Attack Capability— AIR 5349 Phase 3

This project will deliver an airborne electronic attack capability based on the E/A-18G Growler aircraft, including the ALQ-99 Tactical Jamming System, anti-radiation captive training missiles, additional air-to-air missiles, simulators and other training devices. Aircrew and maintenance training will also be delivered.

Production on all 12 aircraft has begun, with the first two scheduled for completion at Boeing in the third quarter of 2015. Aircrew training in the United States is also well underway, as is key software development and test activity. The ALQ-99 and training missile production continued throughout the financial year.

Maritime Patrol and Response Aircraft System—AIR 7000 Phase 2

This project provides a maritime patrol and response aircraft and associated supported systems and services to replace, in part, the AP-3C fleet.

The project, through a cooperative programme with the United States Navy, contracted procurement of the aircrew training systems, two deployable mission support systems and long-lead-time components for the first four aircraft produced. The project continued to mature support arrangements with the US Navy, including ordering initial aircraft spares and support and test equipment. Initial aircrew training has commenced in the United States.

96 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

Battlefield Airlift—Caribou Replacement— AIR 8000 Phase 2

This project is acquiring 10 C-27J Spartan joint cargo aircraft to replace the retired Caribou.

The first three aircraft, spares and support equipment were delivered to Waco, Texas, United States, to enable training. The US-based training of Air Force personnel also began at the end of 2014.

The first aircraft delivery to 35 Squadron at RAAF Richmond, New South Wales, is due to be achieved in July 2015.

Air to Air Refuelling Capability— AIR 5402

This project will deliver five Airbus A330 multi-role tanker transport aircraft, known as the KC-30A in Air Force service, and the associated through-life support infrastructure for the fleet.

The project has completed the aerial refuelling boom system flight test programme and has delivered three fully capable KC-30A aircraft to the Air Force. The remaining two KC-30A aircraft will undergo modification and be delivered in final configuration during 2015‐16.

This project has been removed from the projects of concern list.

Airborne Early Warning and Control System—AIR 5077 Phase 31

This project provides Defence with an airborne early warning and control capability, including six E-7A Wedgetail aircraft and associated ground and support systems.

All remaining elements of the E-7A aircraft and support systems were delivered, including the final remediation software for the radar; mission computing and communication subsystems; and selected changes to the electronic support measures subsystem. Full operational capability was declared in May 2015. This project was a project of concern.

C-17 Globemaster III —AIR 8000 Phase 3 This project provides a global heavy airlift capability, based around the Boeing C-17A Globemaster III aircraft.

The project progressed the delivery and transition of remaining C-17A sustainment support requirements, including the C-17A cargo compartment trainer and remaining C-17A spares, role expansion equipment, ground support equipment and materiel handling equipment. Residual project tasks have transitioned, as planned, to in-service management.

Lead-in Fighter Capability Assurance Programme— AIR 5438 Phase 1A

The project will deliver an upgraded lead-in fighter training system, which includes an upgrade to the fleet of 33 Hawk 127 aircraft, procurement of new full mission simulators, and procurement of additional air combat manoeuvring instrumentation pods.

The project began flight testing of the trial aircraft and support systems and is finalising requirements for service release of the capability in 2017, including commencement of the modification programme for the remainder of the Hawk fleet.

Software issues and delays to initial flight testing have resulted in delays to the programme; however, initial operating capability dates are still on schedule to be achieved.

Procurement of simulators and air combat manoeuvring instrumentation pods continued, with the construction of simulator facilities now underway.

Electronic Systems

Battlefield Command Systems—LAND 75 Phase 4

This project, in close cooperation with JP 2072 Phase 3 Battlespace Communications Systems, will continue to digitise and enhance the command, control and communications systems for land tactical forces. The project will seek to complete the provisioning of the initial digitised brigade, begun under LAND 75 Phase 3.4 Battle Management System, and introduce equipment into a second brigade.

This project began provisioning of vehicle installations based on installation designs delivered under LAND 75 Phase 3.4, and implemented first to second pass risk reduction activities that will generate the information required for a future project approval consideration by government.

This project is well advanced in the completion of the design for the M113 (armoured personnel carriers) and protected mobility vehicle—air defence variant, with the manufacture of kits and installation of systems into selected protected mobility vehicles begun.

Battlespace Communications Systems (LAND)— JP 2072 Phase 3

The first work package of this project continued to support the digitisation of the command, control and communications systems for land tactical forces. The project delivered all the tactical data and voice radio equipment required for vehicle installations by project LAND 75 Phase 4 Battlefield Command Systems, with the final deliveries of minor ancillaries due in 2015‐16.

The second work package involved a request for tender to provide the digital backbone for the Army land communications tactical environment. Tender responses will be evaluated in 2015‐16.

Table 6.3 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 97

Deliverable Performance summary

Battlespace Communications Systems (LAND)— JP 2072 Phase 2A

This project has delivered new digital radios to the Army units for use in the dismounted role, with some specialist ancillaries yet to be supplied. Withdrawal of legacy analogue radio fleets will occur as the new equipment is introduced into service.

A performance-based support contract for the Harris family of products has been established and evaluation of tenders for support of the tactical data radio systems has begun. These contracts will provide life-of-type support of the new radios acquired by JP 2072 phases 1, 2A and 3 (Work Package-A) and additional procurements by other major projects during 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 has completed the required system reviews, including a preliminary design review and critical design review; and has begun system-level testing.

The project completed factory acceptance testing of three systems, installed one system in the shore support facilities, installed one system on an Anzac class frigate and progressed installation on another three Anzac class frigates.

Battle Management System—LAND 75 Phase 3.4

This project delivered 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). Final materiel release and final operational capability were achieved in early 2015. All designs were finalised and all physical vehicle installations and training were delivered to the Army.

Joint Command Support Environment— JP 2030 Phase 8

This project delivered information computer technology capability solutions and improvements to the following capability need groupings: situational awareness; joint operations planning and management; preparedness and special operations combat net radio interface. Operational test and evaluation has begun in support of a planned declaration of final operational capability in late 2015.

The key risk for this project is maintaining the schedule of activities required to support a declaration of final operational capability in late 2015.

C-130J Large Aircraft Infra Red Countermeasures (LAIRCM)—AIR 5416 Phase 4B2

This project will provide the Air Force C-130J with the large aircraft infra-red countermeasures system, enhancing the electronic warfare self-protection capabilities of the fleet. The design for the system’s incorporation, the system hardware, and the modification of the first four aircraft in the United States, are all being provided through a foreign military sales arrangement. The remaining eight aircraft will be modified in Australia.

Project systems engineering reviews began, ahead of the first aircraft induction planned for late 2015. The risk to the aircraft modification schedule is reducing as the design is confirmed and quality issues with the aircraft modification kits are resolved. The project anticipates the first four aircraft will be modified ahead of schedule and under budget, with achievement of initial operational capability still scheduled for the second quarter of 2017.

Replenish Nulka Warstock— SEA 1397 Phase 5A

This project acquires Nulka rounds to replenish the Navy Nulka off-board anti-ship missile decoy inventory (warstock).

The project took final delivery of rounds ordered under Batch 3 and initial delivery of rounds ordered under Batch 4.

High Frequency Modernisation— JP 2043 Phase 3A1

This project delivered a high-frequency communications system for Defence long-range communications. The fixed network component comprises four high-frequency stations, together with primary and backup network management facilities in Canberra. The fixed network capability has been provided in two major stages, core and final. The core system replaced the Navy and the Air Force high-frequency systems from November 2004, with the final system taking over support to ADF operations in October 2009.

In 2014‐15, this project executed the contract for procurement of the direction-finding and signal enhancement (Nullarbor) capability. In addition, a programme of remediation for identified obsolescence issues, including replacement of the 10 kilowatt transmitters, was initiated.

During 2015‐16, procurement of the Nullarbor capability will continue as programmed, along with work to address obsolescence issues resulting from delays to delivery of the final system. The Nullarbor capability will enhance communications and signal reception in a noisy high-frequency environment.

Table 6.3 (continued)

98 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

Helicopters, Tactical Unmanned Weapon Systems and Guided Weapons

Future Naval Aviation Combat System Helicopter— AIR 9000 Phase 8

The 24 MH-60R ‘Romeo’ Seahawk helicopters to be acquired by the project will replace the current fleet of 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 destroyers. The remainder will be based at HMAS Albatross, New South Wales, conducting training and maintenance.

The Navy’s 725 Squadron completed its initial training and consolidation on the Romeo in the United States, returning to Australia in December 2014. Twelve Romeos have now been delivered, one of which will remain with the US Navy Test Squadron at Patuxent River, Maryland, United States, for prototype installation and testing of approved upgrades.

The HMAS Albatross facilities are complete, with the training facility accepted in October 2014 and the Squadron facility accepted in December 2014. The training system has been established, with courseware, maintenance training devices and the first of two tactical operational flight simulators commissioned. Australia-based Romeo training at HMAS Albatross has begun.

The Romeo has been awarded its Australian Military Type Certificate and service release. Two Anzac class frigates have been modified to accept the Romeos, one helicopter flight has embarked and the first ship trial has been completed.

The project remains ahead of schedule and under budget.

Multi Role Helicopter— AIR 9000 Phase 2

The project is acquiring a total of 47 multi-role helicopters (MRH-90) for the Army and the Navy. Phase 2 acquires 12 Army MRH-90 for an additional air mobile squadron; Phase 4 replaces Army’s Black Hawks; and Phase 6 replaces the Navy Sea Kings.

The project accepted a further four aircraft in the mature configuration, inducted the final four early configuration aircraft for upgrade to the latest production standard and accepted the second full-flight and mission simulator into operational service. Initial operational capability milestones for the Army and the Navy were declared and the project continued to support the activities required to achieve the remaining operational milestones in the lead-up to final operational capability.

Medium Lift Helicopter (Additional Chinook Helicopter Project)— AIR 9000 Phase 5C

The project is acquiring seven CH-47F Chinook helicopters to replace the current Army fleet of six CH-47D Chinook helicopters. The CH-47F Chinook will enable the Army to continue to provide medium-lift battlefield support. The new helicopters will be fitted with a rotor brake to allow embarked operations from the new Canberra class landing helicopter dock ships. The helicopters will be based at the 5th Aviation Regiment, RAAF Townsville, Queensland.

The project delivered the first four aircraft and the second of two transportable flight proficiency simulators. A Special Flight Permit was issued in March 2015 and initial materiel release was achieved in June 2015. Other key activities undertaken included working-up to Australian Military Type certification, aircrew and maintainer training, and transition to service activities.

The project continues to deliver to schedule and under budget.

Table 6.3 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 99

Deliverable Performance summary

Bridging Air Combat Capability— AIR 5349 Phase 2

This project is delivering air-to-air and air-to-ground guided weapons and countermeasures integrated with the F/A-18F Super Hornet.

The project finalised the delivery of AGM-154 Joint Stand-Off Weapons, further progressed the procurement of new air-to-air missiles, and worked with the United States Air Force and the United States Navy to achieve integration.

Joint Strike Fighter

Joint Strike Fighter Aircraft—AIR 6000 Phase 2A/2B

This project is approved to acquire 72 Joint Strike Fighter aircraft and supporting elements to form three operational squadrons and one training squadron. This comprises 14 aircraft approved in 2009 and 58 approved in April 2014. Contracting began for Australia’s next eight Joint Strike Fighter aircraft, due for delivery in 2018.

The Joint Strike Fighter Programme continues to make steady progress. In December 2014, the programme delivered its first two aircraft to the International Pilot Training Center at Luke Air Force Base, Phoenix, Arizona, United States. In April 2015, Australia’s first pilot was qualified on the F-35, after completing Joint Strike Fighter flying training at Eglin Air Force Base, Florida, United States. Australia’s second pilot has begun training at Luke Air Force Base.

The project’s facility programme gained government approval on 29 October 2014. Work has now begun on the F-35 RAAF Williamtown, New South Wales, facilities.

On 18 December 2014, the United States Government announced that Australia would provide airframe and engine maintenance, repair, overhaul and upgrade capability to F-35 aircraft in the Asia‐Pacific region.

Defence completed its community consultations supporting the Environmental Impact Statement for F-35A flying operations. The final report was submitted to the Department of the Environment for consideration and ministerial approval in March 2015. An approval decision is expected to be published in July 2015.

General Manager Land and Maritime

Air Warfare Destroyer

Air Warfare Destroyer Build— SEA 4000 Phase 3

The project is being delivered under an alliance-based contracting arrangement between the Commonwealth (Defence), ASC AWD Shipbuilder Pty Ltd and Raytheon Australia. The project will deliver three Hobart class destroyers and their support systems to the Navy.

Key activities for 2014‐15 included the launch of Ship 01, HMAS Hobart, following the installation of the SPY1D(V) and horizon search radars, Mark 45 gun and vertical launch system modules. The final blocks for Ship 02, HMAS Brisbane, were delivered to Adelaide from Newcastle, New South Wales and Williamstown, Victoria. Consolidation progressed from five blocks in July 2014, to 22 of the 31 blocks in June 2015. For Ship 03, HMAS Sydney, construction began on the last of the blocks in preparation for keel-laying. Crew training for the combat system and platform system continued.

The implementation of the interim phase of the AWD reform strategy began in December 2014 with the announcement of the insertion of additional shipbuilding expertise into ASC to improve productivity and begin remediation of the shipbuilder’s cost and schedule overruns. A limited tender process began in May 2015 to seek a long-term solution for AWD shipbuilding as part of the reform strategy.

This project is still being managed as a project of concern.

Land Systems

Field Vehicles and Trailers—Overlander Programme— LAND 121 Phase 3A/5A

The project is delivering approximately 2,150 unprotected lightweight and light Mercedes-Benz G-Wagon vehicles, 540 specialist modules and 1,800 Haulmark trailers, to provide tactical mobility for ADF 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 continued as well as the refinement of through-life support, including maintenance training. At the end of June 2015, more than 1,500 vehicles and 1,220 trailers had been delivered into service Australia-wide.

Table 6.3 (continued)

100 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

Overlander— Medium/Heavy Capability, Field Vehicles, Modules and Trailers— LAND 121 Phase 3B

This project will deliver approximately 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, 3,858 modules and flatracks will be supplied and 1,704 trailers will be acquired to increase payload-carrying capacity.

The prime contractors are currently in the design and verification phase for trucks, modules and trailers, and prototype testing has begun. Introduction into service is on schedule to begin in the second half of 2016.

Bushmaster Protected Mobility Vehicles—LAND 116 Phase 3

This project will deliver 1,052 vehicles, across its five production periods, in seven variants. The vehicles provide protected land mobility to Army combat units and Air Force airfield defence guards. The delivery of Production Period 5 vehicles began in July 2013 and will conclude in 2016.

The project delivered a further 66 of the 214 Production Period 5 vehicles.

The fitment of external composite armour mounting points to previously manufactured vehicles has begun.

Maritime Systems

Amphibious Deployment and Sustainment— JP 2048 Phase 4A

This project is scheduled to deliver two Canberra class landing helicopter dock (LHD) vessels and associated LHD support systems comprising configuration information training, spares, documentation and test equipment.

The project delivered the first LHD, HMAS Canberra, to the Navy, and progressed the production and testing of the second and final LHD, NUSHIP Adelaide, in preparation for delivery in the last quarter of 2015. The LHD support system has been established, with the creation of the LHD Systems Programme Office, a capability support coordinator contract signed with KBR and a transitional in-service support contract signed with BAE Systems.

Delays experienced in the set to work of key systems onboard NUSHIP Adelaide have resulted in rescheduling of harbour and sea acceptance testing. Progress has been made in mitigating the risk to delivery, which is within eight weeks of the original forecast.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2B1

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 required systems upgrade in HMAS Anzac. HMAS Warramunga is currently undergoing harbour acceptance trials, and the upgrade in HMA Ships Ballarat and Parramatta is progressing well.

Amphibious Watercraft Replacement— JP 2048 Phase 3

This project will deliver 12 new watercraft to operate with the two Canberra class LHD ships. The watercraft will provide an organic ship-to-shore connection in support of Defence’s amphibious capability, operating with the LHD ships to enable transport of personnel and equipment between the LHD ships and the shore, including where there are no fixed port or prepared landing facilities.

The first four landing craft were delivered to the Navy, and are now embarked on HMAS Canberra. The second group of four craft were accepted from the prime contractor, Navantia, in February 2015, one month ahead of schedule. Delivery of the second group of landing craft to the Navy is planned for July 2015.

The landing craft support systems have been established with the creation of the LHD Systems Programme Office, a capability support coordinator contract signed with KBR and a transitional in-service support contract signed with UGL Limited.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2A

This project will upgrade the combat management system and introduce an infrared search and track system to the Anzac class frigates.

The project delivered the required systems upgrade in HMAS Anzac. HMAS Warramunga is currently undergoing harbour acceptance trials, and the upgrade in HMA Ships Ballarat and Parramatta is progressing well.

Table 6.3 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 101

Deliverable Performance summary

General Manager Submarines

Future Submarines

Future Submarine— Acquisition— SEA 1000 Phase 1A

This project will deliver Australia’s future submarine capability.

During 2014‐15, the Government announced the acquisition strategy for the Future Submarine Programme, which involves a competitive evaluation process to select an international partner to work with Australia to develop and deliver the future submarine. DCNS of France, TKMS GmbH of Germany, and the Government of Japan have been engaged under the process as potential international partners. Recognising that a new design will be required to meet Australia’s future submarine requirements, the competitive evaluation process will ensure that capability, cost, schedule, and key strategic considerations, along with Australian industry involvement, are carefully and methodically considered, avoiding unnecessary delays. The project is staffed to conduct the competitive evaluation process, with new roles and functions required once the international partner has been selected.

The key risk for this project remains the mobilisation of resources across government, industry and academia necessary to manage the Future Submarine Programme with appropriate international support, informed by experience and knowledge of similar programmes.

Programme 1.1 key performance indicators

The key performance indicators for Programme 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 agreement for the project.

Table 6.3 (continued)

‘I marched in Melbourne with the Regimental Association of the 2nd/2nd Field Regiment 2AIF in honour of my uncle Jack Fitzpatrick, who served in the first desert campaigns, Greece and Crete. I also marched in memory of my grandfather Bill Fitzpatrick, who served with the 7th Battalion AIF. He was in the second wave of landings at Gallipoli on 25 April 1915. The intermittent drizzle didn’t dampen our enthusiasm or that of the crowd. The warmth from the crowd was wonderful—their continuous applause, mixed with yells of encouragement, especially for our veterans, was really moving. As the march progressed I found myself thinking increasingly of my uncle Jack but even more of my grandfather, who one hundred years ago would have been preparing to go ashore in the second wave of landings at Gallipoli.’

— Andrew McLean, DSTO Maritime Division

102 DEFENCE ANNUAL REPORT 2014‐15

FEATURE

HMAS Canberra: a new era for the Australian Defence Force At the end of October 2014, Australia’s first landing helicopter dock ship, known then as NUSHIP Canberra, was farewelled from Melbourne as she headed to her home port of Sydney.

The voyage from Melbourne to Sydney was significant in many respects, not least because it represented the first ship of its kind to be delivered to the Navy by the Defence Materiel Organisation (DMO). The commissioning of HMAS Canberra on 28 November 2014 marked the completion of a tremendous combined effort signifying a new era for the Australian Defence Force (ADF) in the region.

The 27,000-tonne landing helicopter dock now provides the ADF with one of the world’s most capable and sophisticated amphibious assault ships.

Following the commissioning, the ship’s company pushed itself to prepare the Navy’s largest ship to achieve unit readiness certification. First-of-class flight trials for helicopters were conducted in a variety of weather conditions from Tasmania to Townsville. Landing craft were embarked and teamed with the ship’s company of more than 400 sailors, soldiers and airmen and airwomen, who conducted continuous drills as part of the ship’s preparation.

During 2015, Canberra has conducted hundreds of landings—from both the Taipan multi-role helicopters of 808 Squadron and S-70B-2 Seahawks of 816 Squadron—and refined deck landings and emergency procedures. Her hangar deck is able to accommodate up to eight medium-sized helicopters, the movement, storage and maintenance of which are vital to support the ship’s role.

The ship, along with her sister ship NUSHIP Adelaide (when commissioned), will provide the ADF with one of the most capable and sophisticated amphibious deployment capabilities in the world. With four landing craft and embarked helicopters, Canberra will be able to quickly deliver up to 1,400 personnel ashore in support of a variety of amphibious operations, and provide humanitarian aid at a level not seen before within the region.

The ship has state-of-the-art medical facilities, including operating theatres, an eight-bed critical care unit, a variety of wards, pathology and radiology services, X-ray and dental facilities, and a pharmacy.

This milestone represented the excellent collaboration between the DMO and BAE Systems Australia, with the commissioning of Canberra signifying the first major component of the Navy’s modernisation programme.

These two new ships will significantly increase the Navy’s ability to contribute to an integrated joint mission for air and missile defence, and signifies the growth of the Navy in strength, agility, intelligence and lethal capacity.

HMAS Canberra sails into Sydney Harbour after completion of exercises off the coast of New South Wales.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 103

Programme 1.2 Management of Capability Sustainment

The objective for DMO Programme 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 2014‐15, the programme supported 116 sustainment 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 programmes.

Programme 1.2 accounted for approximately 51 per cent of the DMO’s expenses in 2014‐15.

Table 6.4: Programme 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 a range of fixed wing aircraft types including the F/A-18A/B Hornet and F/A-18F Super Hornet, E-7A Wedgetail (airborne early warning and control), AP-3C Orion, C-17A Globemaster III, KC-30A (multi-role tanker/transport), C-130J Hercules, PC9 and the Heron unmanned aerial system. Aerospace Systems Division also provides through-life support to a number of advanced flight simulators and ground support equipment fleets.

The major challenges for sustainment included:

• implementing efficiency initiatives, including the introduction of performance-based contracts for new and existing aircraft fleets

• continuing to manage ageing aircraft issues associated with F/A-18A/B Hornet, AP-3C and PC9 aircraft

• supporting operationally deployed weapon systems such as the C-17A, C-130J, E-7A and KC-30A aircraft, and the Heron unmanned aerial system

• supporting the operational deployment and rotation of the F/A-18A Hornet and the F/A-18F Super Hornet

• contributing to the development of acquisition and sustainment strategies for future aerospace projects, including maritime patrol and response capabilities (P8 aircraft) and the new pilot training systems

• continuing with the refurbishment and transfer of C-130H aircraft to Indonesia

• taking delivery of and preparing for the introduction into service of the first C-27J aircraft

• rationalising ground support equipment fleets and introducing the new aircraft cargo loader capability into service

• supporting the expansion of Heron operations to include civilian airfields such as Rockhampton, Queensland.

104 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

F/A-18 Hornet Weapons System (CAF02)

This system comprises the fleet of 71 aircraft and associated training systems that continue to be supported by a range of commercial and foreign military support arrangements and in-house Air Force workshops. The major challenge in supporting the F/A-18A/B Hornet is the increased maintenance requirements of an ageing aircraft fleet with the focus on sustaining a higher flying rate of effort and operational tempo associated with the deployment of the F/A-18A/B Hornets to Operation Okra.

In addition, several commercial arrangements were adjusted to achieve aircraft life of type and to support operations. These commercial arrangements included:

• completion of the radar support extension contract with Raytheon

• establishment of a new Classic Hornet hydraulics and undercarriage support contract with RUAG Australia

• expansion of scope in the Boeing Defence Australia deeper maintenance contract to include additional deeper maintenance services to support Operation Okra.

Airborne Early Warning and Control System (CAF20)

This system comprises six aircraft, fixed and deployable mission support systems, flight and mission simulators, and software development laboratories sustained through a combination of Defence and contracted support arrangements. The capability achieved full operational capability in May 2015.

Sustainment levels agreed with the Air Force were substantially achieved, including the successful stand-up and ongoing provision of logistic support to aircraft deployed on Operation Okra. Contracted support arrangements continue to mature. The first annual performance improvement programme, which underpins annual rolling-wave extension of the in-service support contract, was successfully completed, realising ongoing sustainment system savings.

F/A-18F Block II Super Hornet Weapons System (CAF21)

This system comprises 24 F/A-18F Block II Super Hornet aircraft which are operated in support of air combat capability requirements. Extensive engineering and logistic support was provided to six F/A-18F aircraft rapidly deployed to Operation Okra.

The deeper maintenance activity, known as ‘periodic maintenance interval’, in the F/A-18F fleet has begun. This six-yearly maintenance activity is essential to preserving the fleet condition until withdrawal and to prevent impacts to aircraft serviceability at the operational squadrons.

P-3C/AP-3C Orion Weapons System (CAF04)

This system comprises the P-3 fleet of 16 Orion aircraft and associated ground-based systems which remain subject to complex, resource-intensive structural ‘safety-by-inspection’ and obsolescence management programmes. New T-56 engine support arrangements are in place and will realise savings.

Two aircraft (A09-755, A09-758) were disposed of in accordance with the approved disposal plan. Components recovered from these aircraft were retained to support future AP-3C operations. The airframes were destroyed and recycled.

C130J-30 Weapons System (CAF06) This system comprises 12 aircraft and one Level 5 simulator. The fleet consistently achieved high levels of availability and reliability and a number of key

capability enhancements were achieved, including:

• the successful trial of a satellite communications system for the C-130J fleet

• upgrade to the global terrain data in the full flight simulator

• service release of the new carbon brake and wheel assemblies.

C-130J propulsions system support was also successfully transitioned to a new performance-based contract with Standard Aero Limited, which is accountable for full propulsion system performance from April 2015.

Lead-In Fighter Hawk 127 Weapons System (CAF03)

This system comprises 33 Hawk Mark 127 aircraft; a full-scale fatigue test article; mission planning systems; a computer-based training system; and a tactical weapon system training system.

BAE Systems Australia provides all in-service support to the fleet of Hawk aircraft under a performance-based contract, with the exception of operational maintenance, which is currently performed by the Air Force. A contract change proposal was signed with BAE Systems Australia that will see the operational maintenance transition from the Air Force to BAE Systems.

The fleet corrosion control and re-paint programme has continued throughout the year and remains ongoing, with an expected completion in November 2015.

Table 6.4 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 105

Deliverable Performance summary

KC-30A Weapons System (CAF22) This system comprises five aircraft and a training system. The fleet remains in transition from the project phase to sustainment, with reduced fleet availability

due to acquisition-generated modification programmes. KC-30A has commenced boom operations and will achieve full capability in early 2016. One aircraft has been continually deployed on operations to the Middle East since September 2014. Despite the reduced aircraft numbers, an increased rate of effort has been achieved, primarily associated with operations. Defence is working with key suppliers to enhance the KC-30 support system to improve performance and reduce through-life costs.

C-17 Heavy Air Lift Weapons System (CAF19)

This system comprises six aircraft and a training system, with primary support through a foreign military sales arrangement with the United States Air Force.

The C-17 Heavy Air Lift weapons system is mature and performing to expectations. A fixed satellite antenna providing fast onboard broadband capability was installed on a C-17 under Plan Jericho. Continued focus was on a number of ongoing reforms to sustainment, training and maintenance support involving changes to industry participation in the weapon system support. These reforms will result in a better balanced and effective sustainment organisation. An increased rate of effort resulted from the engagement of the C-17 aircraft in support of current operations.

Special Purpose Aircraft (CAF09) The 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 special-purpose aircraft fleet successfully completed its most significant heavy maintenance programme while continuing to deliver high levels of service to the Government. Defence continues to work with the Government to identify options for a replacement capability.

Electronics Systems products

Electronic Systems Division provides through-life support to a range of command and control systems, communications, satellites and tactical interoperability systems, airspace surveillance and control systems and electronic warfare systems.

In 2014‐15, Electronic Systems Division continued to meet the challenges of delivering required sustainment outcomes against increased obsolescence and a growth in demand.

Key achievements included:

• sustained the joint counter improvised explosive device capability protecting Australian personnel deployed in the Middle East Area of Operations

• achieved further programme savings for all ADF large aircraft infrared countermeasures systems, covering multiple current and future airborne programmes

• developed support concepts for narrowband satellite communications control systems

• revised tactical air navigation support strategies and contracts in preparation for possible life of type extension of ageing platforms facing significant obsolescence challenges

• continued development of technology to remediate obsolescence issues within the Jindalee Operational Radar Network

• revised the sustainment of the fleet of combat radio equipment procured under JP 2072 phases 1 and 2A Battlespace Communications Systems

• managed obsolescence in the tactical air defence radar system through the Block 3 upgrade and replacement of the communications system

• initiated a progressive replacement programme for the Navy’s global maritime distress and safety at sea system radios

• established preliminary sustainment arrangements for the overhead persistent infra-red capability.

Wide Area Surveillance (CAF13) Wide area surveillance across the northern sea and air approaches to Australia was provided through a network of three over-the-horizon radars. Capability availability targets were consistently

exceeded. Skills retention ensuring priority industry capability continues to be achieved through a programme of work that supports industry capacity while delivering minor capability enhancements and risk reduction for AIR 2025 Phase 6. Sustainment effort has focused on replacing cooling systems that use refrigerant gas (R22) that is not compliant with the Montreal Protocol; progression of the Defence fuel installation audit remediation activities at remote radar sites; and remediation of urgent obsolescence issues.

Table 6.4 (continued)

106 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

Command and Intelligence Systems (CA40)

Sustainment of command and intelligence systems provides support to the Army’s operationally deployable command, intelligence and geospatial support systems. These systems consist of hardware and software configured primarily to provide protected and secret deployable networks of varying sizes and configurations for the Army and Special Operations.

Significant effort was expended to support the sustainment of ADF command systems in the Middle East region. The introduction into service of the new command and control networks for the Army, the Air Force and Special Operations Command remains on schedule and within budget. In parallel, planning is well advanced for the coordinated withdrawal of those systems that are reaching life of type.

Tactical Electronic Warfare System (CA36)

Tactical electronic warfare systems comprise 26 diverse products that directly support tactical electronic warfare missions. These products deliver electronic warfare effects in the joint, maritime, land and air domains, and are typically electronic systems that are soldier-portable or fitted to military platforms.

During 2014‐15, the focus was to provide support to military operations and the continuation of technical refresh activities on major air and maritime platforms to address obsolescence issues and changes in target technologies.

Battlespace Communications Systems (CA33)

This capability consists of two primary fleets of communications equipment. The combat net radio fleet is a range of soldier-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. JP 2072 Battlespace Communications Systems is a major project that is replacing the current generation of battlespace communications systems through a series of project phases.

During 2014‐15, the focus was on planning and executing the transition of the first phase of the JP 2072 generation of communications equipment from acquisition to sustainment. A major aspect of the transition was the establishment of mature maintenance and support contracts with Harris Corporation and Raytheon Australia. Concurrently there was continued focus on identifying elements of the current fleet that could be rationalised or retired from service. Planning for the timely withdrawal of current fleets as the new radios are introduced into service remains critical to minimising longer-term sustainment costs.

Helicopter Systems products

The Helicopters, Tactical Unmanned Aerial Systems and Guided Weapons Division provides through-life support to the Navy rotary wing weapons systems; supports the Army’s Shadow 200 tactical unmanned aerial system; and provides and supports all of the guided weapons for the Navy, the Army and the Air Force. Support consists of fleet-wide engineering, repair parts, contract management for deeper-level maintenance, replacement of ageing and obsolescent equipment and, where required, disposal activities.

Achievements included:

• provision of ongoing support to operationally deployed helicopters

• provision of cost-conscious support to Seahawk Classic, Black Hawk and CH-47D Chinook capabilities for training and operations while managing their withdrawal from service

• provision of cost-conscious support to Kiowa and Squirrel training capabilities ahead of their withdrawal from service

• continued effective support to the Shadow tactical unmanned aerial system in Australia

• improved support arrangements for Tiger and MRH-90 fleets to increase their availability and reduce cost of ownership

• good progress on the establishment of support networks for the Seahawk Romeo and CH-47F Chinook

• successfully supported the deployment of three Black Hawk and one MRH-90 to Vanuatu in support of Operation Pacific Assist 2015

• all operational demands for the Navy, the Army and the Air Force were fully met, including the supply of air-to-ground and air-to-air weapons for Operation Okra

• fully meeting all raise, train and sustain demands for the Navy, the Army and the Air Force guided weapons

• achieving critical life extensions for the AIM-132 advanced short-range air-to-air missile, FGM-148 Javelin missile and RIM-162 Evolved Sea Sparrow missile

• remediation of the Harpoon missile inventory continued, including through a sustainment top-up buy of missile and exercise sections

• orders were placed for replacement missile test sets.

Table 6.4 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 107

Deliverable Performance summary

Guided Weapons— Air Force, Army and Navy (CN38, CA60, CAF33)

Achievements included support to:

• Navy guided weapon products, including RGM/UGM/AGM-84 Harpoon missile, Standard missile, RIM-162 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

• Army guided weapons products, including FGM-148 Javelin missile, RBS70/Bolide missile and AGM-114 Hellfire missile

• Air Force guided weapon products, including AIM-132 advanced short-range air-to-air missile and AIM-120 advanced medium-range air-to-air missile.

Multi Role Helicopter (CA48) MRH-90 acceptances increased the fleet size to 33 aircraft of 47 to be acquired in total. In-service support is provided under contract by Airbus Group Australia Pacific. The MRH-90 fleet is presently

operated across four locations: the 5th Aviation Regiment in Townsville, Queensland; the Army Aviation Training Centre in Oakey, Queensland; 808 Squadron in Nowra, New South Wales; and a retrofit programme running with Airbus Group Australia Pacific in Brisbane.

Measurable improvements in sustainment to improve enabling technical services and supply and engineering support required for the Navy and the Army to meet their key capability milestones were achieved.

Armed Reconnaissance Helicopter Weapons System (CA12)

All 22 Tiger armed reconnaissance helicopters are now in service in the final mature configuration and in-service support is provided under contract by Airbus Group Australia Pacific.

A strategic review of the through-life support contract was completed, which culminated in a deed of agreement that became effective in January 2015. The deed introduced a repair-by-the-hour arrangement and a new performance management framework. Though measurable progress is already evident, it will take time to fully implement the support improvements, which will improve spares availability, significantly reduce the cost of through-life Tiger capability and enable the Army to generate increasing flying rates of effort to support capability milestones.

S-70A-9 Black Hawk Weapons System (CA11)

The Army’s fleet of Black Hawk helicopters provides support to air mobile and special operations capabilities.

The operational fleet reduced to 18 aircraft and sustainment was optimised to ensure that the fleet continued to provide the required level of operational availability until the Black Hawks are replaced by the MRH-90.

MH-60R Seahawk Weapon System (CN35)

The number of MH-60R Seahawk helicopters delivered grew to 12. The Romeo will contribute to the Navy’s anti-surface and anti-submarine warfare capabilities, replacing the S-70B-2 Seahawk Classic in service.

Through-life support is provided by a contract with the Maritime Helicopter Support Company, a Lockheed Martin/Sikorsky Aircraft Corporation joint venture, which is administered through a United States foreign military sales sustainment case. The financial arrangements for the case are now better understood and will provide a firmer basis on which budget estimates can be based and disbursements tracked.

The Navy’s 725 Squadron has now taken occupancy of the new Romeo facilities for its operations and is stepping up its training and rate of effort to meet future requirements.

S-70B-2 Seahawk Weapons System (CN03)

The S-70B-2 Seahawk, operated by the Navy’s 816 Squadron, was supported successfully to maintain a viable embarked helicopter capability in advance of the new Seahawk Romeo capability being introduced. The S-70B-2 Seahawk was able to achieve an increased rate of effort through the careful management of spares and servicing, while four S-70B-2 Seahawk aircraft were withdrawn from flying operations as part of the transition process.

The 816 Squadron co-located with the new Romeo 725 Squadron in the new Romeo facilities toward the end of 2014‐15 to realise operating, maintenance and administrative efficiencies as 816 Squadron prepares to transition to the Romeo helicopter.

The S-70B-2 Seahawk is an ageing aircraft with a number of mission system-related obsolescence issues that have remained under careful management.

Table 6.4 (continued)

108 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

General Manager Land and Maritime

Land Systems products

Land Systems Division is responsible for the sustainment of the following materiel, managed in conjunction with the Navy, the Army, the Air Force and Joint Health Command as the capability managers:

• armoured fighting, combat support and field engineering vehicles

• logistic service support and commercial vehicles

• radar, surveillance, electrical and simulation systems

• small arms and weapon systems

• medical and dental equipment, health systems and combat rations

• ADF clothing and personal combat equipment

• ADF munitions.

Land Systems Division continued to meet the support requirements of forces on operations and delivered eight operational procurements including up-armoured vehicles.

The agreed level of support to the ADF was delivered within budget and comprehensive equipment fleet performance reviews were conducted with Defence capability managers.

Training and professionalisation of sustainment staff were conducted to improve skills and staff agility.

Trial results from the vehicle health and usage monitoring systems have been incorporated into final designs. Automatic transfer of data will allow better analysis and improved sustainment decision-making.

Explosive Ordnance—Air Force, Army and Navy (CAF32, CA59, CN37)

Munitions Systems Programme Office is responsible for the acquisition and sustainment of non-guided explosive ordnance employed by the Navy, the Army and the Air Force, including ammunition, installed explosive ordnance and countermeasures.

Achievements include:

• transitioned out of the current arrangements for domestic manufacture of munitions, propellants and high explosives

• executed the strategic munitions interim contract for the operation of the Benalla and Mulwala, Victoria munitions, propellants and high-explosives facilities from 1 July 2015

• ensured timely supply of serviceable munitions in support of operations in the Middle East region

• improved ADF munitions inventory management to better align with the Services’ requirements.

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 met with minimal exceptions. The exceptions were the result of unforeseen supply chain disruptions and were predominantly associated with a 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.

Australian Defence Organisation Commercial Vehicles Fleet (CA19)

The Defence Commercial Vehicle Programme uses commercially available motor vehicles for administrative purposes. Currently, the fleet has around 5,400 vehicles and trailers under management. The fleet ranges from passenger sedans through to heavy rigid trucks, touring coaches and prime movers. The whole-of-government fleet services provider, sgfleet, supports the fleet.

The fleet continued to focus on improving asset utilisation. A number of under-utilised vehicles were identified for possible reallocation or disposal.

The delivery of six touring coaches was completed. The delivery of 20 commercial prime movers was also completed. These vehicles will provide an interim heavy transport solution until the delivery of the enduring capability through LAND 121 Phase 3B Overlander-Medium/Heavy Capability, Field Vehicles, Modules and Trailers.

Approximately 1,350 commercial vehicles were delivered and more than 1,600 disposed of, as part of the routine replacement programme.

Table 6.4 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 109

Deliverable Performance summary

General Service B Vehicle Fleet (CA45) The general service vehicle fleet consists of approximately 8,000 light, medium and heavy-wheeled vehicles and trailers, including protected (up-armoured) and unprotected variants, used in Australia

and on operations overseas. Defence is progressively replacing the majority of the current general service vehicle fleet under LAND 121 Overlander Programme and JP 2097 Enhancements to Special Operations Capability.

The gradual phase-out of the Land Rover fleet continued, as the delivery of Mercedes-Benz G-Wagons to ADF units continued. Approximately 120 all-terrain vehicles were delivered to replace aged capabilities across the ADF. Remediation of vehicles returning from overseas operations also continued.

ADF Clothing (CA39) ADF clothing comprises approximately 23,000 line items of personal clothing, footwear and other items manufactured by the textile, clothing and footwear industry.

New clothing lines were introduced, including a new general-purpose jacket for the Navy, a new combat boot and the Australian multicam camouflage uniform for the Army.

Continuing procurement and logistics support was provided for the introduction into service of the Army parade boot and the general-purpose jacket for the Army and the Air Force, the Air Force’s general purpose uniform, and meeting the ADF’s ongoing clothing and footwear requirements for operations as well as for raise, train and sustain activities.

Maritime Systems products

The Maritime Systems sustainment concept is to support maritime capability through cost-effective materiel design, maintenance engineering and logistic support to platforms, equipment and systems. The provision of these sustainment services is under a structure of system programme offices that are co-located regionally with the Navy forces and groups by ship class, and that manage the delivery of services through a variety of outsourced commercial contracts.

In December 2014, a comprehensive programme was begun to deliver improvement in the divisional, structural, cultural and performance activities in waterfront outcomes; effectiveness of configuration management, maintenance planning and execution; a shift to governance-focused business; and the creation of a managed workforce to support sustainable operations.

An ongoing sustainment reform programme for the Armidale class patrol boat seeks to improve the materiel support delivery to the ships and optimise the required outcomes of availability, reliability and total cost of ownership.

Other achievements included:

• A dock operation and reticulated services contract for the Captain Cook Graving Dock and the Garden Island Defence Precinct, Sydney was signed in May 2014. Combined with the Garden Island stakeholders planning forum, this ensured that services were available in 2014‐15 for dockings, production berthing, and home porting at Fleet Base East.

• The guided missile frigate class (FFG) Group 2 maintenance contract began operation in August 2014 and, combined with the newly formed FFG enterprise, comprising the DMO, industry and the Navy, is working together to provide materially seaworthy FFG ships.

• ADV Ocean Shield transferred to the Australian Customs and Border Protection Service on 1 July 2014.

• In-service support arrangements were established for the HMAS Canberra and the Guided Missile Destroyer support concept was progressed in consultation with the related acquisition project managers.

• Mature in-service support arrangements were developed for HMAS Choules.

Fuels and Lubricants—Air Force, Army & Navy (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.

Fuels and Lubricants—Navy, Army and Air Force transferred to Defence Fuels Services Branch on 1 February 2015. The ongoing assistance with the materiel remediation of fuel installations, development of long-term contracts, and fuel card contract arrangements is being progressed by Defence Fuels Services.

Table 6.4 (continued)

110 DEFENCE ANNUAL REPORT 2014‐15

Deliverable Performance summary

Anzac Class Frigate (CN02) The support objective is to maintain the materiel capability of the Anzac class frigates through the provision of materiel support and ongoing maintenance of the ships and associated equipment,

systems and operator training facilities.

The anti-ship missile defence (projects SEA 1448 Phase 2A and 2B) refit and upgrade programme continued, with HMAS Anzac delivered and HMAS Warramunga in the final stages of harbour acceptance trials. HMA Ships Parramatta and Ballarat entered the programme and are progressing well. The MH60R helicopter (Project AIR 9000 Phase 8) was integrated into HMAS Perth with successful first-of-class flight trials completed. The electronic support measure system (Project SEA 1448 Phase 4A) was installed in shore facilities and HMAS Warramunga has sea trials planned in the second half of 2015.

Planning continues for the Block Upgrade Programme, scheduled to commence in 2017, incorporating the Platform Systems Remediation programme, the Maritime Communications Modernisation Project (SEA 1442 Phase 4) and proposed Anzac Air Search Radar Replacement (SEA 1448 Phase 4B).

Effort has begun to consolidate the major support contracts under the Group 3 Group Maintenance Contract and the ANZAC Ship Integrated Materiel Support Programme Alliance into a total asset management arrangement.

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 ongoing maintenance of the ships and associated equipment, systems and operator training facilities.

The operation of HMAS Sydney as the alongside harbour training ship was achieved, and initial activities required to achieve HMAS Sydney’s planned withdrawal from service in December 2015 were commenced.

Canberra Class (LHD) Sustainment (CN34)

The scope of this product addresses the sustainment of two Canberra class landing helicopter dock (LHD) platforms, 12 LHD landing craft, and associated shore-based systems and facilities, as these are introduced into service.

The first of two Canberra class landing helicopter dock ships, HMAS Canberra, was introduced into Navy service. In addition, the first of three batches of four LHD landing craft were also brought into service. HMAS Canberra, inclusive of its four embarked landing craft, performed well throughout the year.

The LHD Systems Programme Office established key commercial arrangements with Australian defence industry partners providing LHD and landing craft, maintenance, engineering and supply support services. In addition, asset management, governance support and independent assurance services were also established.

Huon Class Mine Hunter Coastal (CN14)

The support objective is to maintain the materiel capability of the Huon class mine hunter coastal vessels and associated training equipment through the provision of materiel support and ongoing maintenance of the in-service ships.

Ship maintenance activities for operational ships were progressed and completed as planned. The combat system upgrade is in the final stages of installation, progressing on time and on budget, with completion of the detailed design for the upgrade of the ships’ fire-fighting system achieved.

Auxiliary Oiler Replenishment (CN13)

The support objective is to maintain the materiel capability of the underway replenishment tanker HMAS Success through the provision of materiel support and ongoing maintenance of the ship and associated equipment and systems.

HMAS Success support was achieved through a scheduled maintenance period conducted in the period September‐October 2014. In November 2014, the ship began a five-month deployment in support of Operation Manitou, returning to Australia in June 2015 for preparations prior to a major refit commencing in July 2015.

Table 6.4 (continued)

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 111

Deliverable Performance summary

General Manager Submarines

Collins Submarines Programme

The objective of the Collins Programme is to sustain the Collins class submarine materiel capability, including the associated escape and rescue capability, minimise the logistic costs of ownership, and provide sustainable and cost-effective design, engineering and logistics support for Collins class platform and combat systems and support for associated submarine training, escape and rescue systems through long-term, and increasingly performance-based, agreements with industry partners, including ASC Pty Ltd (ASC), Raytheon Australia, Thales, BAE Systems and other providers.

Collins Submarines Programme (CN10) Recommendations from the Coles Review of November 2012 are now largely implemented, with some long-term Coles initiatives being carried forward as normal business consistent with their

implementation timeframes.

As recommended by Coles, the DMO, the Navy and ASC have established an enterprise approach with the following goals:

• delivering required capability at benchmark availability

• building an enterprise workforce with sustained submarine knowledge embedded in a collaborative working environment

• participants collaborating in a successful enterprise with aligned objectives and interests

• reducing sustainment costs over time through productivity improvements.

Programme 1.2 key performance indicators

Programme 1.2 key performance indicators vary with each sustainment product and are specified in the relevant materiel sustainment agreements.

Further information on deliverables for programmes 1.1 and 1.2 is available online.

Table 6.4 (continued)

112 DEFENCE ANNUAL REPORT 2014‐15

Programme 1.3 Provision of Policy Advice and Management Services

Programme performance: The objective of Programme 1.3 is to meet government, ministerial and departmental expectations and timeframes for the provision of policy, advice on capital acquisitions, sustainment activities, procurement and contracting. Programme 1.3 also manages the support and delivery of industry support programmes.

Industry programmes with a total budget of around $27 million were successfully delivered, including skilling, business advice and grants programmes, as well as key measures designed to enhance Australian industry competitiveness and facilitate Australian companies’ entry into global supply chains. Current programmes have been extended to ensure continuity until new industry policy is released in the second half of 2015. Defence continued to facilitate opportunities for Australian industry to showcase its capabilities to multinational defence contractors and foreign governments, while also generating further interest for trade and investment opportunities in Australia, through a series of international exhibits and trade missions under the Team Defence Australia initiative. Defence’s responsibilities and processes with regard to facilitating international sales and equipment disposals were also significantly matured and enhanced.

Programme highlight: Working with industry partners, Defence, through the Australian Military Sales Office, the Counter Improvised Explosive Device Task Force and the Defence Science and Technology Organisation, developed two systems to counter the threat of radio-controlled improvised explosive devices: one for use by dismounted troops and one fitted to light vehicles.

With industry partners Micreo, Ultra Electronics Australia, Associated Electronic Services, AXIOM Precision Manufacturing and Lintek supporting an accelerated production schedule, deliveries to the Afghan National Defense and Security Forces began in January 2015.

Table 6.5: Programme 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 programme offices and other business areas. Significant work was done to maintain the currency of, and continue to improve, Defence procurement policy and contracting templates.

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 programmes, 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 programmes continued to be delivered, providing targeted assistance in a range of areas, including skilling, export support and commercialisation of new technologies.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 113

DMO governance and accountability A Ministerial Directive issued on 28 July 2008 outlines the accountability of the Chief Executive Officer (CEO) to the Minister for Defence 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 provided internal advice and direction and oversaw 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 is held quarterly and 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.

Materiel Audit and Risk Committee

The independent Materiel Audit and Risk Committee allows the CEO to meet obligations under the Public Governance, Performance and Accountability Act 2013. The committee monitors and recommends improvements to the DMO’s governance, risk management, internal controls and financial reporting. Following the release of the First Principles Review and the recommendation to disband the DMO on 30 June 2015, the committee ceased operation on 30 June 2015.

114 DEFENCE ANNUAL REPORT 2014‐15

Figure 6.1: DMO senior committees as at 30 June 2015

Branch heads to directors

Division heads to branch heads

General managers to division heads

Chief Executive Officer to general managers

Council Chairs’ Forum

Inventory Co-ordination Steering Group

DMO Procurement Council Materiel Engineering Council

Business Operations Council Project Management Council

Sustainment Management and Materiel Logistics Council Work Health and Safety Council

DMO Executive Committee Materiel Audit and Risk Committee

D

A

D

A

D

A

D

A

D

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 listed, the primary objective of the regime is to remediate these projects by 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.

Significant changes to the projects of concern list in 2014‐15 included:

• successful remediation of the Air-to-Air Refuelling Capability (AIR 5402) and subsequent removal of the project from the list

• addition of the ADF Satellite Communications Terrestrial Enhancements project (JP 2008 Phase 3F) to the list.

Table 6.6: Current projects of concern as at 30 June 2015

Project name Project number/phase Date added

Collins class submarines sustainable and projects CN10 November 2008

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

Australian Defence Satellite Communications Capability Terrestrial Enhancement JP 2008 Phase 3F September 2014

A list of current and former projects of concern by expenditure is available online.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 115

PROFILE: Bronwyn Madge

Emotions run high at centenary commemorations in Gallipoli Bronwyn Madge works in the Defence Support and Reform Group managing ministerial support and training coordination. She attended the Dawn Service at Gallipoli in this centenary year along with her husband after being successful in the ballot for places at the ceremony.

Bronwyn is a direct descendant of a World War I veteran; her great-grandfather was 18 years old when he landed at Gallipoli in May 1915 as part of the 1st Light Horse Brigade. He survived and went on to re-enlist in World War II.

‘The dawn service was very emotional; to be part of the experience was very special’, Bronwyn said.

‘Even limited sleep and cool temperatures didn’t dampen the experience. Being part of the wider Defence and public service family, I was also able to appreciate the behind-the-scenes work that went into this event.’

Travelling with her whole family, Bronwyn was thrilled to be able to return to Gallipoli the next day so her mother could see, for the first time, where her grandfather was posted. Bronwyn’s young children were also able to connect to the area.

‘Even my six-year-old knows the story of Simpson and his donkey. To be able to show them his grave and walk along Anzac Cove provided our three children with a special opportunity to get a real feel for the origins of Anzac Day.’

Bronwyn Madge with husband Deane Katsoolis at Anzac Cove on 25 April 2015.

116 DEFENCE ANNUAL REPORT 2014‐15

Anzac nurses—a remarkable but rarely told story More than 3,000 Australian civilian nurses volunteered for active service during World War I. Twenty-five died during their service and eight received the Military Medal for bravery. However, theirs is a story rarely told.

From the first Allied landings at Gallipoli on 25 April 1915, Australian nurses cared for hundreds of casualties in hospital and on transport ships anchored offshore. Working in often gruelling conditions, with limited medical supplies and a desperate lack of fresh water, they tended to a seemingly endless stream of wounded and sick soldiers for the duration of the campaign.

Reflecting on her work in the hospital ship Sicilia, Sister Lydia King wrote in her diary:

I shall never forget the awful feeling of hopelessness on night duty. It was dreadful. I had two wards downstairs, each with more than 100 patients, and then I had small wards upstairs—altogether about 250 patients to look after, and one orderly and one Indian sweeper. Shall not describe their wounds, they were too awful. One loses sight of all the honour and the glory in the work we are doing.

The Australian Army Nursing Service (AANS) was formed in 1903 as part of the Australian Army Medical Corps. During World War I, 2,000 of its

members served overseas alongside Australian nurses from other organisations, such as Queen Alexandra’s Imperial Military Nursing Service and the newly formed Red Cross.

Many AANS nurses served as part of the 3rd Australian General Hospital, which was set up on the island of Lemnos in the Aegean Sea in response to a request from the British War Office. The hospital treated large numbers of wounded soldiers from all Allied armies. The conditions on Lemnos were far from idyllic.

The weather on the island was terrible—it was bitterly cold, with strong winds and rain. The nurses’ diets contained no fruit or vegetables, and they received butter and eggs only once a month.

There were a number of reasons a nurse may have volunteered for service in World War I: the chance to travel; the chance to be involved in the war; the opportunity to be closer to a serving loved one or help troops in need; or the allure of independence. Whatever the reason, by the time the war came to an end, it had become clear that nurses were essential to military medical service.

From its inception on Lemnos in August 1915 until January 1916, the 3rd Australian General Hospital treated 7,400 patients, of whom only 143 died.

FEATURE

Nurses of the 3rd Australian General Hospital form up

to follow a piper into their camp under the leadership of their matron, Miss Grace Wilson, and second in command of the hospital, Lieutenant Colonel JA Dick, at Mudros West, Lemnos.

DEFENCE MATERIEL ORGANISATION

06 CH

DEFENCE ANNUAL REPORT 2014‐15 117

‘They paved the way for nurses, and women in general,

to be considered equal to men and professionals in their own right. The core duties of military nurses have not changed, and I do not think that my reason for becoming a nurse—to care for the sick and wounded—would have been any different to those who signed up to go to Lemnos, Egypt or board a hospital ship.’

Flight Lieutenant Alex Hardingham, Nursing Officer, Joint Health Command

‘The absolute selflessness that saw them volunteer for

service and the dedication to duty for the duration of the war is a testament to the strength and character of those amazing women. It is these women who formed the basis of my “vision” of nursing in that light.’

Lieutenant Colonel Natalie Leaver, Nursing Officer, 7th Brigade Headquarters

‘The Australian Army Nursing Service has a long history of supporting ADF operations. Although nursing has changed over the past 100 years, the legacy of the nurses who served in World War I continues.’

Flight Lieutenant Bernard Clarke, Nursing Officer, 1 Expeditionary Health Squadron Townsville

‘Their [Australian nurses during World War I] dedication

to duty and unwavering compassion and care in the grimmest of times and in the harshest of environments cannot fail to inspire. Their persistent and exceptional delivery of health care is still the basic tenet of what we do today.’

Lieutenant Paula Evans,

Nursing Officer, Joint Health Command

TRIBUTES

PART THREE

GOVERNANCE AND ACCOUNTABILITY

CREATING

ONE DEFENCE

First Principles Review

CHAPTER SEVEN

7

Reform

REFORM

07 CH

DEFENCE ANNUAL REPORT 2014‐15 121

First Principles Review

Defence is an organisation with a long and proud history. Its evolutionary journey from separate single Service agencies into the Australian Defence Force (ADF) and further into an increasingly integrated Defence organisation began in the 1970s. The First Principles Review set out the next phase of change for Defence.

On 5 August 2014, the then Minister for Defence announced the First Principles Review team, which comprised Mr David Peever (Chair), the Hon Robert Hill, AC, the Hon Lindsay Tanner, Lieutenant General Peter Leahy, AC (Retd), and Mr Jim McDowell. The review team was to ensure that Defence is fit for purpose and able to promptly respond to future challenges.

The review team conducted an end-to-end holistic review of Defence based on the outcomes required of Defence and founded on the following first principles:

• Clear authorities and accountabilities that align with resources: decision-makers are empowered and held responsible for delivering on strategies and plans within agreed resourcing

• Outcome orientation: delivering what is required with processes, systems and tools being the ‘means not the end’

• Simplicity: eliminating complicated and unnecessary structures, processes systems and tools

• Focus on core business: Defence doing only for itself what no one else can do more effectively and efficiently

• Professionalism: committed people with the right skills in appropriate jobs

• Timely, contestable advice: using internal and external expertise to provide the best advice so that the outcome is delivered in the most cost-effective and efficient manner

• Transparency: honest and open behaviour which enables others to know exactly what Defence is doing and why.

The First Principles Review’s report, Creating One Defence, was released on 1 April 2015 by the Minister for Defence. When its recommendations are implemented, Defence will be positioned to best meet future demands.

The review and its supporting analysis led the review team to recommend transformational change to an organisation that they believed had drifted from contemporary best practice. In combination, the review’s recommendations will change the structure, governance arrangements, accountabilities, processes and systems of Defence. They are designed to operate as a whole and will need to be implemented as such in order to be most effective.

The combined result will be a more unified and integrated organisation that is more consistently linked to its strategy and clearly led by its centre. This has been called the One Defence approach, and has four key features:

• a stronger and more strategic centre able to provide clear direction, contestability of decision-making, along with enhanced organisational control of resources and monitoring of organisational performance

• an end-to-end approach for capability development with capability managers having clear authority and accountability as sponsors for the delivery of capability outcomes to time and budget, supported by an integrated capability delivery function and subject to direction setting and contestability from the centre

• enablers that are integrated and customer-centric with greater use of cross-functional processes, particularly in regional locations

• a planned and professional workforce with a strong performance management culture at its core.

Effective implementation is essential to achieving the One Defence model and to generating the efficiencies the review has identified. An integrated implementation plan has been developed. Successful delivery of the review’s intent requires a unified leadership team willing to drive change and a behavioural shift; a sense of urgency and a willingness to push the pace of change; and sufficient planning, oversight and commitment to delivering the full intent of the review’s recommendations.

122 DEFENCE ANNUAL REPORT 2014‐15

The One Defence transformation is an opportunity for Defence to establish better relationships with the Government, ministers, external stakeholders, central agencies, and its own leadership and workforce. It is an opportunity for Defence to reset and reposition itself as a truly integrated agency that consistently produces the best public value, and is able to meet current and future demands on it. Most importantly, it will allow Defence to effectively deliver on its primary focus: to protect and advance Australia’s strategic interests through the provision of appropriately prepared and equipped armed forces.

Service delivery reform programme In 2014‐15, the service delivery reform programme moved from being a standalone programme to an element of the Enablers work stream in the First Principles Review.

The service delivery reform programme, initiated by the Secretary and the Chief of the Defence Force in April 2014, focuses on developing a service delivery approach which ensures that Defence makes the best use of its resources for delivering the core capabilities needed to achieve its outcomes.

The programme involved developing an agreed service delivery framework for Defence, fully implementing shared services, standardising services, removing duplication of functions and ensuring that there are single, clear lines of ownership and accountability. This approach is consistent with work that is happening across the public sector on implementing shared services for corporate and enabling functions.

The service delivery reform programme functions include:

• administration, coordination and governance

• APS education and training

• audit and assurance

• communication and public affairs

• financial services

• human resource services

• information and communication technologies

• information management

• legal services.

• non-materiel procurement

• regional services

• security

The service delivery reform programme was examined by the First Principles Review team. The review team noted that it is critical for the development of the One Defence system that the shared services model be fully implemented.

The review team recommended, consistent with the One Defence model, that the service delivery reform programme, including full integration of the DMO’s corporate functions, be completed.

REFORM

07 CH

DEFENCE ANNUAL REPORT 2014‐15 123

Base services contractual reform After several years of hard work, the base services retender procurement activity was completed in August 2014, with five contracts signed on 10 July 2014, and five additional contracts signed on 10 August 2014. Transition to these new contracts began progressively from July 2014; the national transition was completed on 1 December 2014.

The 10 new nationally focused base services contracts replaced 21 smaller regionally focused contracts. The contracts have a combined value of $1.1 billion a year and deliver services that maintain the Defence estate including non-major capital facilities works and services that enable Defence capability.

The base services contractual reform is the result of a once-in-a-decade opportunity to deliver services under an outcome-based model rather than paying for availability. By retendering the 21 previous contracts through a single procurement process, Defence has improved its value-for-money outcomes by leveraging its national volume, increasing the level of standardisation and better managing supply and demand.

Service delivery

The new base services contracts are enabling core Defence capability and activities across all bases. The focus is now on continuous and service delivery improvements. Product and services managers are working in consultation with Service and Group representatives to address performance and conformance issues as they arise.

Performance management

The new base services contracts have a comprehensive performance management framework that focuses on strategic and operational performance management, and abatement and reward mechanisms.

Defence continues to monitor the performance of its base services contractors through the contract performance management framework. This framework includes a process of contractor self-reporting, Defence assurance activities and an external assessment of the contractors’ performance management framework.

Contract governance

A contract governance framework, underpinned by staffing restructures, business rules and processes, is in place for all base services contracts. These arrangements were developed based upon Australian National Audit Office (ANAO) better practice guidance and taking into consideration recommendations made by the ANAO in its 2009 audit of Defence garrison support services contracts.

An internal shared service has been established for the processing of contract amendments, abatements and other contractual notices. The internal shared service was developed to provide better governance, and to ensure that Commonwealth and Defence accountability requirements are met and that base services contracts continue to deliver value for money and Defence control over the total cost of ownership.

124 DEFENCE ANNUAL REPORT 2014‐15

Cultural change March 2015 marked the third year of the Pathway to Change: Evolving Defence Culture implementation. As at 30 June 2015, 159, or 91 per cent, of the 175 Pathway to Change key actions and recommendations from the six culture reviews have been finalised.

As Defence transitions from implementation of recommendations to cultural programmes and initiatives, the focus has moved to cultural reinforcement and evaluation to ensure that Pathway to Change effectively achieves Defence’s goal of cultural reform.

On 1 July 2014, Defence began a four-year collaboration with the Australian Human Rights Commission to support the achievement of cultural reform and the intent of Pathway to Change in Defence.

In this, the first year of the collaboration, the Commission visited eight ADF bases. In each case the Commission reviewed data on incidents, unacceptable behaviour, offences and other matters; conducted meetings with command and staff members; conducted focus groups and interviews with personnel; and, after each visit, provided feedback and suggestions to the Service or command on the progress of cultural reform at the establishment.

Defence recognises that, to realise enduring cultural change, a sustained effort from all Defence staff and, in particular, Defence leaders will be required over many years. An evaluation framework has been developed to capture the success of Pathway to Change. The framework aligns Pathway to Change levers with the various measures and metrics currently available within Defence, including internal surveys of employee attitudes and behaviour and Defence census data.

Initial observations indicate that positive cultural change is occurring under the six key Pathway to Change levers for cultural change and reinforcement. Examples for each lever are summarised below:

• Leadership and accountability: Perceptions of Defence commitment to creating a diverse workforce remain high.

• Values and behaviours: Perceptions of adherence to Defence values remain steady, particularly in the areas of integrity, loyalty and teamwork.

• Right from the start: There is an increased perception of command chain intolerance of unacceptable behaviour in training establishments—most trainees and cadets agree that their supervisor/instructor leads by example.

• Practical measures: The proportion of women recruited to the ADF is increasing, with an increasing proportion of women attending the Centre for Defence and Strategic Studies.

• Corrective processes: Defence is addressing the time it takes to resolve unacceptable behaviour cases. There are some positive results in the percentage of unacceptable behaviour cases that have been finalised in less than six months. Progress in this area will continue now that better complaint-reporting processes and infrastructure arrangements are in place.

• Structure and support: Perceptions of workplace flexibility requests being accommodated by supervisors are increasing.

REFORM

07 CH

DEFENCE ANNUAL REPORT 2014‐15 125

FEATURE

Championing equal opportunity for people with disability Defence is committed to supporting all its members with a disability through programmes, reasonable adjustments, assistive technology, and networks such as mentoring and disability champions.

It is a focus that the Head of People Policy and Culture and senior disability champion, Richard Oliver, believes has the potential to revolutionise what people with disability can achieve in the workplace.

‘The nature of disability is widely misunderstood and there are a variety of misconceptions about disability and people with disability’, Richard said.

‘Not only can our staff continue to achieve at work if their circumstances change, but we have recruitment programmes that provide meaningful employment for those with disability.’

One such programme is the Defence Administration Assistance Programme (DAAP), which began service delivery out of Gallipoli Barracks in Queensland in September 2014. This programme offers administrative support services to Defence within south-east Queensland.

The programme is delivered by a local not-for-profit organisation, Help Enterprises, which employs people with an intellectual disability. Tasks

performed by employees include, but are not limited to, photocopying, shredding, mail-outs, packaging, compiling and other administrative tasks.

For most of the staff, this is their first opportunity to participate in mainstream employment.

‘The programme plays a significant role in alleviating some of the administrative pressures for Defence employees in the south-east Queensland region, while at the same time providing a valuable employment opportunity to people with disability’, Richard said.

Help Enterprises’ Coordinator of Post-School Services, Susan Coleman, says the young people in her service have enormous potential and, when given the opportunity, have a rich and important contribution to make.

‘Providing administrative support to Gallipoli Barracks is paid employment for the DAAP participants who, more often than not, tend to be restricted to volunteer work in the community’, Susan said.

DAAP participants Cody Billington and Emma Doran enjoy working for Defence.

‘I like the people at Defence because they talk to me; they are helpful and nice’, Cody said. ‘I like the work, especially the mailroom job, and I like earning money so I can buy things.’

‘I love the Defence Force because I like the people there. It’s fun and everyone helps me out’, Emma said. ‘I like getting money to buy books I love.’

Defence Secretary Dennis Richardson (centre) on a visit to Gallipoli Barracks, Queensland. With him are (from left) Director-General People Strategy and Culture Justine Greig, Major Daniel O’Brien, Help Enterprises’ Coordinator of Post-School Services Susan Coleman, Julianne Lazarus, Emma Doran, Asif Musa, Elizabeth McCourtie, Priya Narayan, Jeremy Gawne, Andrew Hall, Cody Billington, Anthony Whitnall, Simon Wright, Major Russell Hamsey and Leigh Richmond.

CHAPTER EIGHT

8

People

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 127

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 on a particular date—as the most accurate indicator of current staffing levels. Workforce planning is based on average funded strength and 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 figures.

By way of comparison, ADF and APS staffing figures for 2014‐15, and for 2013‐14, are shown in tables 8.1 and 8.2 against the three measures.

Table 8.1: Australian Defence Force—staffing figures, 2013‐14 and 2014‐15

ADF staffing measure 2013‐14 2014‐15 Variation

For workforce planning purposes

Actual funded strength (paid strength as at 30 June) 56,922 57,718 +796

Average funded strength (over the financial year) 56,364 57,512 +1,148

For other statistical data

Permanent strength (headcount) (on duty or leave and paid or unpaid) 57,035 57,404 +369

Notes

Funded strength figures include the ADF Gap Year, which was re-introduced in 2014‐15 with 219 participants. For consistency with other tables in this chapter, the headcount figures do not include the Gap Year.

Funded strength figures do not include the Reserve workforce other than those on continuous full-time service, who are paid through the same mechanism as permanent force members. For consistency with other tables in this chapter, the headcount figures do not include Reserve members.

Table 8.2: Australian Public Service—staffing figures, 2013‐14 and 2014‐15

APS staffing measure 2013‐14 2014‐15 Variation

For workforce planning purposes

Actual FTE (paid strength as at 30 June) 19,988 18,787 ‐1,201

Average FTE (over the financial year) 20,496 19,342 ‐1,154

For other statistical data

Headcount figure (on duty or leave, full-time or part-time, paid or unpaid) 21,191 19,967 ‐1,224

Note

Figures include both ongoing and non-ongoing APS members.

128 DEFENCE ANNUAL REPORT 2014‐15

Workforce planning This section provides information on the average workforce strength during 2014‐15.

ADF permanent force

Table 8.3 details ADF permanent force average funded strength for 2014‐15 and the previous year. ADF strength was 57,512 in 2014‐15, an increase of 1,148 from 2013‐14. This includes ADF Reservists on continuous full-time service. Average funded strength for continuous full-time service was 888 (comprising Navy 380, Army 424 and Air Force 84)—an increase of 161 from 2013‐14 and the previous year.

The ADF permanent force grew significantly from 2007 to 2011 due to initiatives such as the Hardened and Networked Army, the Enhanced Land Force, the Defence Capability Plan and initiatives from the 2009 Defence White Paper, with a recruitment surge between 2007 and 2010. After peaking in 2010‐11, 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, 2013‐14 and 2014‐15

2013‐14

actual

2014‐15 budget estimate[1]

2014‐15 revised estimate[2] 2014‐15

actual

Variation[3]

Number %

Navy 13,862 14,318 14,125 14,070 ‐55 ‐0.4

Army 28,568 30,383 29,463 29,366 ‐97 ‐0.3

Air Force 13,934 14,138 14,100 14,076 ‐24 ‐0.2

Total average funded strength 56,364 58,839 57,688 57,512 ‐176 ‐0.3

Notes

Figures in this table are average strengths; they are not a ‘headcount’. Reservists undertaking full-time service are included in the figures. Employees on forms of leave without pay are not included.

1. As published in the Portfolio Budget Statements 2014‐15.

2. As published in the Portfolio Additional Estimates Statements 2014‐15.

3. Figures are the difference between 2014‐15 revised estimate and 2014‐15 actual.

ADF enlistments and separations

The permanent ADF strength (headcount) increased by 369 in 2014‐15; this figure reflects the net difference between enlistments and separations.

The ADF enlisted 5,577 permanent members, made up of 4,550 men and 1,027 women, for the 12 months to 30 June 2015. This was 777 fewer than in 2013‐14.

ADF enlistments can be categorised as ab initio (those with no prior military service) or prior service enlistments. Of the 5,577 permanent members enlisted, 691 entrants had prior military service in the Reserves, the Gap Year programme, another Service or another country, or had previous permanent force service. There were 4,886 ab initio entrants.

Tables 8.4 and 8.5 provide comparative information about separations over the last two years.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 129

Table 8.4: ADF permanent force, 12-month rolling separation rates, 30 June 2014 and 30 June 2015

12-month rolling separation rate (%)

30 June 2014 30 June 2015

Navy 8.4 7.9

Army 12.4 11.3

Air Force 5.5 5.7

Total ADF permanent force 9.7 9.1

Table 8.5: ADF permanent force separations, 2013‐14 and 2014‐15

Voluntary separations[1] Involuntary separations[2]

Age

retirement

Trainee

separations Total

2013‐14[3]

Navy Officers 104 23 1 40 168

Other ranks 564 184 1 228 977

Army Officers 212 84 11 139 446

Other ranks 1,666 872 5 564 3,107

Air Force Officers 123 32 13 17 185

Other ranks 399 93 15 88 595

Total ADF permanent force

Officers 439 139 25 196 799

Other ranks 2,629 1,149 21 880 4,679

Total 3,068 1,288 46 1,076 5,478

2014‐15

Navy Officers 110 33 4 68 215

Other ranks 512 196 2 174 884

Army Officers 211 77 26 154 468

Other ranks 1,427 747 10 650 2,834

Air Force Officers 157 44 15 36 252

Other ranks 347 97 27 84 555

Total ADF permanent force

Officers 478 154 45 258 935

Other ranks 2,286 1,040 39 908 4,273

Total 2,764 1,194 84 1,166 5,208

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, who are unsuitable for further duty, who died while serving or who fell into the ‘Management initiated early retirement’ category.

3. Some 2013‐14 figures have been adjusted from what was reported in the Defence Annual Report 2013‐14 to account for retrospective transactions.

130 DEFENCE ANNUAL REPORT 2014‐15

ADF Reserves

Table 8.6 shows the number of Reservists who rendered paid service during 2014‐15 and the previous year. The number of days each Reservist works in a year can vary substantially depending on personal circumstances and organisational need.

In 2014‐15, 19,362 Reservists undertook paid service, which is 379 fewer than in 2013‐14. 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 500 over the previous financial year (the final figures for Reserve service in 2014‐15 were not known at the time of publication because they are compiled as Reservists submit their attendance records, which some Reservists do only occasionally).

Table 8.6: ADF Reserve paid strength

2013‐14 actual

2014‐15 budget estimate[1]

2014‐15 revised estimate[2]

2014‐15 actual

Variation[3] Number %

Navy 2,021 2,150 2,150 2,073 ‐77 ‐3.6

Army 14,662 15,250 14,200 14,301 +101 +0.7

Air Force 3,058 3,100 3,100 2,988 ‐112 ‐3.6

Total paid Reserves 19,741 20,500 19,450 19,362 ‐88 ‐0.5

Notes

As 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 2014‐15.

2. As published in the Portfolio Additional Estimates Statements 2014‐15.

3. Figures are the difference between 2014‐15 revised estimate and 2014‐15 actual.

Project Suakin The ability to attract and retain the right people, in the right numbers, is fundamental to the sustainment of the ADF’s future capability. Project Suakin has designed the ADF Total Workforce Model to support capability by enabling the ADF to draw on the skills and experience of its entire workforce in a more sophisticated and integrated way. The Total Workforce Model supports the optimal use of ADF permanent and reserve members, providing greater strategic and organisational flexibility. The Total Workforce Model will, at the same time, afford ADF members increased workplace flexibility, encouraging them to make service in the ADF a longer-term career.

During 2014‐15, Project Suakin undertook a range of ‘test and learn’ activities to finalise the design of the Total Workforce Model. Amendments to Defence legislation, necessary to allow permanent ADF members access to flexible service arrangements, were introduced into Parliament in June 2015. Project Suakin also delivered new and revised policies, procedures and tools to enable the Services to begin implementation of the Total Workforce Model in 2015‐16.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 131

APS workforce

Table 8.7 shows details of the APS average strength, expressed as average FTE, for 2014‐15 and the previous year. APS average strength was 19,342 in 2014‐15. This was a decrease of 1,154 from the 2013‐14 figure of 20,496. The decrease in 2014‐15 was 1,201 FTE, from 19,988 to 18,787 (Table 8.8). The reduction was due to continuing reforms to Defence’s business practices, and will continue in 2015‐16 with the implementation of the recommendations of the First Principles Review.

Table 8.7: Civilian (APS and contractor) average full-time equivalent, 2013‐14 and 2014‐15

2013‐14 actual

2014‐15 budget estimate[1]

2014‐15 revised estimate[2]

2014‐15 actual

APS—Defence 15,280 14,883 14,426 14,861

APS—DMO 4,812 4,777 4,539 4,075

APS—DMO—ADF backfill[3] 404 432 406 406

Total APS 20,496 20,092 19,371 19,342

Defence contractors 340 445 319 350

DMO contractors 18 48 48 11

Total contractors 358 493 367 361

Total civilian workforce 20,854 20,585 19,738 19,703

Notes

These figures are average FTE; they are not a headcount.

1. As published in the Portfolio Budget Statements 2014‐15.

2. As published in the Portfolio Additional Estimates Statements 2014‐15.

3. The DMO manages its workforce under a combined ADF, APS and contractor model. Under this arrangement, it can use funding from unfilled ADF positions to fill and resource positions with APS staff.

Table 8.8: APS end-of-year full-time equivalent, 2013‐14 and 2014‐15

2013‐14 actual

2014‐15 budget estimate[1]

2014‐15 revised estimate[2]

2014‐15 actual

Total APS 19,988 19,700 18,950 18,787

Notes

Figures in this table are actual FTE for the last payday of 2014‐15. 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 across the full year.

1. As published in the Portfolio Budget Statements 2014‐15.

2. As published in the Portfolio Additional Estimates Statements 2014‐15.

132 DEFENCE ANNUAL REPORT 2014‐15

APS recruitment and separations

Defence recruited 452 APS employees during 2014‐15, including 195 as part of the graduate programme.

The APS (headcount) decreased by 1,224; this reflects the net difference between recruitment and separations. The separations are shown in Table 8.9; the majority of separations were due to resignation or retirement from Defence.

Table 8.9: APS separations, 2013‐14 and 2014‐15

Voluntary redundancy[1]

Involuntary separations[2] Resignation/ retirement[3] Transfers[4] Total

2013‐14

Senior Executive Service 3 ‐ 7 6 16

Executive levels 66 17 252 47 382

Other staff 89 77 728 97 991

Total APS (2013‐14) 158 94 987 150 1,389

2014‐15

Senior Executive Service ‐ ‐ 10 8 18

Executive levels 93 18 303 42 456

Other staff 148 51 833 170 1,202

Total APS (2014‐15) 241 69 1,146 220 1,676

Notes

Figures in this table show ongoing and non-ongoing employee numbers (substantive headcount).

1. Voluntary redundancies are those that are programme initiated.

2. Involuntary figures include breach of the Code 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 contract term.

4. Transfers are those who have transferred to other government departments. Movements between Defence and DMO are not included.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 133

Remunerating people

Summary

Defence remuneration is a key component of the Defence employment offer. It attracts people to join Defence, develop personally and professionally, and choose to stay. The offer provides for fair and competitive remuneration, consistent with the parameters laid down by government.

The distinct features of the ADF and APS remuneration structures are explained further 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. In 2014‐15, a new ADF Workforce Remuneration Arrangement, together with simplified salary and allowance structures for members, produced better and simpler pay outcomes for ADF members.

The ADF Workplace Remuneration Arrangement 2014‐17 is a key component of the ADF remuneration framework. The arrangement is part of the ADF remuneration initiative aimed at attracting and retaining military personnel. It forms a significant part of the Defence offer to the ADF.

The Workplace Remuneration Arrangement increases pay and pay-related allowances. Other conditions of service are determined by the Minister for Defence under section 58B of the Defence Act. The current arrangement expires on 1 November 2017. Table 8.10 details salary ranges for permanent ADF members as at 30 June 2015.

Table 8.10: Permanent ADF salary ranges as at 30 June 2015

Rank

Salary range

Minimum Maximum

Officer of the permanent force (equivalent)

General (E)[1] $535,100 $764,420

Lieutenant General (E)[1] $358,400 $537,600

Major General (E)[2] $222,006 $270,736

Brigadier (E)[2, 3] $153,090 $247,578

Colonel (E)[2, 3, 4] $137,710 $236,359

Lieutenant Colonel (E)[2, 4] $118,431 $224,912

Major (E)[2, 4] $82,962 $202,607

Captain (E)[2, 4] $64,977 $192,306

Lieutenant (E)[5] $54,015 $113,224

2nd Lieutenant (E)[5] $50,466 $105,699

134 DEFENCE ANNUAL REPORT 2014‐15

Rank

Salary range

Minimum Maximum

Other rank of the permanent force (equivalent)

Warrant Officer Class 1 (E) $73,579 $113,246

Warrant Officer Class 2 (E) $67,770 $104,933

Staff Sergeant (E) $65,497 $101,230

Sergeant (E) $58,561 $96,812

Corporal (E) $50,605 $88,526

Lance Corporal (E) $46,549 $82,282

Private Proficient (E) $45,587 $81,321

Private (E) $44,644 $80,381

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.

ADF Super and ADF Cover

Defence has established a new superannuation package for the military, called ADF Super. ADF Super will become the default superannuation fund for all new permanent ADF members and members of the Reserves on continuous full-time service from 1 July 2016. The new superannuation arrangements will provide more flexible and portable superannuation that recognises the unique nature of military service for Australia’s service men and women.

ADF Super have an employer contribution rate of 16.4 per cent. From 1 July 2016 ADF members will be able to transfer their accumulated ADF Super benefits to a fund of their choice at any time, including if they leave the ADF.

ADF Cover, the statutory death and invalidity scheme that will apply to ADF Super members and those who choose another fund, does not require any personal contributions and is consistent with the cover provided by the Military Superannuation and Benefits Scheme.

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 consistent with that legislation and broader government policy.

Work undertaken in 2014‐15 on a new collective agreement for Defence’s APS employees will continue in 2015‐16, with the aim of reaching a mutually agreeable package of remuneration and conditions.

Table 8.10 (continued)

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 135

Through the agreement, Defence provides its APS employees with an attractive employment package and, in return, employees and supervisors have a range of responsibilities (including mutual responsibilities) that must be fulfilled as part of their employment.

Table 8.11 reflects Defence APS salary arrangements as at 30 June 2015. 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.

Table 8.11: 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 $491,008

SES Band 2 $184,037 $222,173 $254,003[2]

SES Band 1 $151,665 $177,964 $195,760

Collective agreement[3]

Executive Level 2 $111,559 $133,905 $179,276[4]

Executive Level 1 $96,084 $108,382 $133,905[5]

APS Level 6 $76,023 $86,844 $89,463[6]

APS Level 5 $69,395 $74,331 $74,904[7]

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[8]

APS Level 1 $43,306 $48,613 $48,613

Notes

1. Maximum salary paid under an individual remuneration arrangement shown.

2. Includes rates for Medical Officer Class 6.

3. Salary ranges provided under the Defence Enterprise Collective Agreement.

4. Includes rates for EL2.1, EL2.2, Legal and Science specialist structures and Medical Officer Class 3 and 4.

5. Includes rates for Public Affairs and Legal specialist structures and Medical Officer Class 1 and 2.

6. Includes rates for Public Affairs Grade 2 retained pay point.

7. Includes rates for Senior Technical Officer Grade 1 retained pay point.

8. Includes rates for Technical Assistant Grade 2 retained pay point.

136 DEFENCE ANNUAL REPORT 2014‐15

Senior Leadership Group remuneration

ADF: All ADF senior officers (excluding statutory office-holders) are remunerated under the ADF Workplace Remuneration Arrangement 2014‐17. Other conditions of service are determined by the Minister for Defence under section 58B of the Defence Act.

Statutory officers: Statutory office-holders, including the Secretary and the Chief of the Defence Force, are remunerated under determinations of the Remuneration Tribunal, made under the Remuneration Tribunal Act 1973.

APS: SES employees’ conditions are set by a single determination made for them under section 24(1) of the Public Service Act and supplemented by individual common law agreements. As Defence operates in a values-based employment framework, mutual responsibilities on issues such as accountability, performance and productivity are set out in these instruments.

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 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.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 137

Managing and developing APS staff Defence continued to make progress in the ongoing development of its APS workforce in Defence. In 2014‐15, Defence defined a comprehensive leadership development pathway for APS employees, with an approved corporate menu of leadership training, including courses sourced through the Australian Public Service Commission.

The suite of management and administration courses covering core skills was reviewed to best align with APS values, Pathway to Change: Evolving Defence Culture, diversity and inclusion, and managing change.

Three mandated corporate development programmes were reviewed, comprising the New Starters, First Time Manager and First Time Supervisor programmes. They continue to inform and assist employees at key career points. New courses were developed to address skill gaps for existing APS managers and supervisors, providing them with ongoing support and learning opportunities.

A range of new training was developed and introduced, including courses in online awareness for cyber security and implementation of the Public Governance, Performance and Accountability Act 2013.

Defence has developed a leading for reform programme, primarily for Executive Level staff in the Defence enabling groups. This programme aims to equip the cohort with the skills to successfully lead and deliver across a range of reform activities associated with the First Principles Review.

Defence continued to implement the work arising from the APS Job Families Project. This included identifying and documenting key job family‐specific skills, knowledge and qualifications for more than 1,200 occupations in the Defence APS workforce. The results will inform the professional development of more than 15,500 non-SES APS employees.

In early 2015, Defence began a work value review programme to assess APS positions within Defence work units, in order to determine whether the allocated APS classification assigned to each role was correct. To date, this work has been applied to the Defence People Group and the Capability Development Group, and will continue as part of implementation of the First Principles Review.

Complaint handling and resolution Defence personnel 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.

138 DEFENCE ANNUAL REPORT 2014‐15

Reporting on sexual misconduct

In 2014‐15, Defence’s Sexual Misconduct Prevention and Response Office (SeMPRO) continued to develop, deliver and refine a wide range of services and outcomes in support of the Defence population.

SeMPRO’s mandate encompasses a range of important work in relation to sexual misconduct prevention and response, including operating a 24/7 telephone response capability for anyone who seeks support; the development and evaluation of sexual ethics education and primary prevention programmes; and delivering face-to-face awareness briefings across Defence. SeMPRO also acts as a central point of data collection for incidents of reported sexual misconduct as well as providing expert practical and policy-based advice to assist personnel responsible for managing cases of sexual misconduct in Defence.

In 2014‐15, SeMPRO assisted more than 310 callers to the 1800SeMPRO telephone service and case-managed 118 SeMPRO clients.

SeMPRO’s prevention and education programmes have been a focus this year. In 2014‐15, SeMPRO delivered an overarching strategy for sexual ethics education in Defence, which encompasses a growing range of expert-endorsed, cutting-edge education and prevention interventions and programmes that are designed to reduce the incidence of sexual misconduct in Defence.

Further information about SeMPRO is available online.

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 any complaint of unacceptable behaviour to 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.

In 2014‐15, 846 complaints of unacceptable behaviour were recorded in ComTrack (Figure 8.1). This is a slight increase on the previous year and reflects the ongoing encouragement of personnel to report any incident of unacceptable behaviour.

Complaints fall into the following six main categories:

• abuse of power

• discrimination

• harassment

• sexual harassment

• workplace bullying

• inappropriate workplace relationships and conflict of interest.

On average, between 10 and 15 per cent of unacceptable behaviour incidents are of a level of seriousness that results in a formal disciplinary or administrative outcome. The majority of complaints continue to be resolved informally. The number of complaints of alleged unacceptable behaviour represent complaints from less than 1 per cent of the Defence workforce.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 139

Figure 8.1: Unacceptable behaviour complaints reported as received and finalised, 2010‐11 to 2014‐15

753

658 669

827 846

925

610

686

860

818

0

100

200

300

400

500

600

700

800

900

1,000

2010 11

Received

No. of complaints

Finalised

2011 12 2012 13 2013 14 2014 15

Work health and safety performance Defence is committed to maintaining a safe, healthy and positive working environment for all workers to enable them to contribute to delivering Defence’s capability requirements.

Defence continued to implement the 2012‐17 Defence Work Health and Safety (WHS) Strategy to drive continuous improvement of the work health and safety systems across the whole of Defence, including managing hazards and risks through working groups and committees that cover operational areas, Groups/Services (safety boards), and whole-of-defence management (Defence Work Health and Safety Committee).

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 the identification of hazards and control of risks associated with that thing. 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.

140 DEFENCE ANNUAL REPORT 2014‐15

Sentinel Defence implemented the first release of a whole-of-Defence WHS information management system (Sentinel) in August 2014. The introduction of Sentinel enabled a common technological platform for the entirety of Defence to manage and share WHS information and introduced a number of new facilities for Defence officers and workers.

The first release included an expanded detail replacement for WHS incident capture and reporting functionality, along with a facility to record and manage hazards. The introduction of Sentinel has improved the availability, timeliness and quality of WHS information for decision-makers.

The second release of Sentinel occurred in January 2015. This release included a range of higher-level governance and assurance functionality to aid in the overall management of WHS across Defence, including a new common risk management and recording methodology.

The introduction of Sentinel supports a key objective from the 2012‐17 Defence Work Health and Safety Strategic Plan. Sentinel will provide decision-makers at all levels with access to comprehensive quality WHS information so they can eliminate, or manage, hazards across the Defence lifecycle and upon disposal.

Hazardous chemicals enforceable undertaking

Defence entered into a voluntary cooperative compliance programme with Comcare following the lifting of the hazardous chemicals enforceable undertaking in November 2013.

The cooperative compliance programme maintained regulator oversight as Defence introduced an ongoing Defence hazardous chemicals reduction programme. The cooperative compliance programme concluded in February 2015. The Defence hazardous chemicals reduction programme that has been implemented aims to eliminate or substitute hazardous chemical use in Defence so far as is reasonably practicable.

Policy development

A significant number of WHS policies were finalised in 2014‐15 and published for use across Defence:

• miscellaneous workplace safety hazards policy and suite of procedures

• heat injury policy

• workplace stress and psychological injury policy

• hazardous chemicals management policy and several related procedures

• electrical safety policy and suite of procedures

• first aid policy and suite of procedures

• fatigue management policy and suite of procedures

• management of major hazard facilities policy

• emergency preparedness and management policy

• management of safety risks policy and several related procedures.

A new manual of corporate WHS policy was developed and is scheduled for release in the second half of 2015.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 141

Comcare interventions and investigations Comcare undertakes interventions or inspections based on known high-risk areas. In order 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 2014‐15, the number of Comcare interventions (185) decreased by 20 per cent from the 2013‐14 figure (230) (228 in 2012‐13).

In addition to partnering with Comcare on interventions and inspections, Defence actively investigates safety incidents. Twelve investigations were conducted in 2014‐15. Investigations included reviewing causes of workplace stressors, noise protection and correct use of personal protection equipment. These investigations have led to the development or refinement of associated hazard reduction programmes and a heightened focus on using proper personal protection equipment across Defence.

The number of notifiable incidents continued to decline in 2014‐15 (Table 8.12) and Comcare did not issue Defence with any notices in 2014‐15 (Table 8.13).

The annual Defence survey checks the cultural aspects of safety and the results for 2014‐15 are consistent with those from previous financial years (Table 8.14).

Table 8.12: Work health and safety—statistics and notifiable incidents, 2012‐13 to 2014‐15

Total incident reports[1]

Comcare— notifiable deaths[2]

Comcare— serious injury or illness

Comcare— dangerous incidents

Total Comcare notifiable incidents

2012‐13 20,068 15 982 1,493 2,490

2013‐14 16,802 5 559 745 1,312

2014‐15 13,687 13 592 314 919

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. Events are recorded based on the date of the event. Delays in the reporting of events affect these statistics. A single event may involve multiple people.

2. Comcare notifiable deaths are all deaths, excluding those that were known to be combat related.

Table 8.13: Work health and safety—Comcare notices, 2012‐13 to 2014‐15

Reports 2012‐13 2013‐14 2014‐15

Improvement notices[1] 1 1 ‐

Prohibition notices[2] 3 ‐ ‐

Do not disturb notices[3] 1 ‐ ‐

Enforceable undertaking[4] ‐ ‐ ‐

Written request[5] ‐ ‐ ‐

Notes

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 undertakings—Comcare may accept a written undertaking to fulfil an obligation under the WHS legislation.

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 of prohibition notice.

142 DEFENCE ANNUAL REPORT 2014‐15

Table 8.14: Safety awareness surveys, 2012‐13 to 2014‐15

Attitude survey question

ADF APS

2012‐13 Agree

2013‐14 Agree

2014‐15 Agree

2012‐13 Agree

2013‐14 Agree

2014‐15 Agree

Health and safety is treated as an important issue in my workplace.

90% 91% 92% 87% 87% 86%

I know how/where to obtain safety information relevant to my workplace.

92% 92% 92% 87% 87% 89%

When I report an accident/ injury/incident/hazard, I believe that appropriate action will be taken.

84% 85% 85% 82% 83% 82%

Actual staffing This section provides workforce information as at 30 June 2015 and outlines changes in the workforce that occurred during 2014‐15. It includes numbers of people, employment categories, locations and gender information. This information is based on headcount.

At 30 June 2015, Defence had 77,289 permanent employees, comprising 57,404 permanent ADF members and 19,885 ongoing APS employees. An additional 82 APS employees were employed on a non-ongoing basis.

During 2014‐15, the permanent ADF strength increased by 369 to 57,404. 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 798 to 23,157 (including those members on continuous full-time service and Active Reserve). The total ADF workforce was 80,561, and included 18,869 Navy permanent and Reserve members, 42,778 Army permanent and Reserve members and 18,914 Air Force permanent and Reserve members. At 30 June 2015, 1,235 Reservists were also Defence APS employees.

At 30 June 2015, there were 4,536 APS employees in the DMO and 15,431 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 8.15‐20, further information and statistics on the Defence workforce are available online.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 143

Table 8.15: Defence workforce headcount, 30 June 2014 and 30 June 2015

Navy Army Air Force ADF APS[1]

30 June 2014[2]

Permanent ADF[3] 13,758 29,047 14,230 57,035 ‐

Department of Defence ‐ ‐ ‐ ‐ 15,885

DMO ‐ ‐ ‐ ‐ 5,306

Total at 30 June 2014 13,758 29,047 14,230 57,035 21,191

30 June 2015

Separations[3]

Permanent ADF 1,099 3,302 807 5,208 ‐

Department of Defence ‐ ‐ ‐ ‐ 1,298

DMO ‐ ‐ ‐ ‐ 378

Subtotal 1,099 3,302 807 5,208 1,676

Net transfers[4]

Department of Defence ‐ ‐ ‐ ‐ 483

DMO ‐ ‐ ‐ ‐ ‐483

Subtotal ‐ ‐ ‐ ‐ ‐

Additions

Permanent ADF[3] 1,290 3,448 839 5,577 ‐

Department of Defence ‐ ‐ ‐ ‐ 361

DMO ‐ ‐ ‐ ‐ 91

Subtotal 1,290 3,448 839 5,577 452

Employee numbers

Permanent ADF[3] 13,949 29,193 14,262 57,404 ‐

Department of Defence ‐ ‐ ‐ ‐ 15,431

DMO ‐ ‐ ‐ ‐ 4,536

Total at 30 June 2015 13,949 29,193 14,262 57,404 19,967

Change 191 146 32 369 -1,224

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 2014 strength figures have been adjusted from what was reported in the Defence Annual Report 2013‐14 to account for retrospective transactions.

3. Figures do not include Reserves or those undertaking continuous full-time service.

4. ‘Net transfers’ represents the net effect of transfer of APS employees between Defence and DMO. Some of these transfers are the result of movements under the shared services programme.

144 DEFENCE ANNUAL REPORT 2014‐15

Table 8.16: Defence workforce by employment location, 30 June 2015

NSW Vic.[1] Qld SA WA Tas. NT ACT[2] O/S[3] Total

Permanent forces[4]

Navy 6,894 1,580 834 103 2,230 15 598 1,538 157 13,949

Army 5,452 3,218 12,069 1,386 864 68 3,124 2,746 266 29,193

Air Force 4,716 976 2,974 2,008 357 7 962 1,979 283 14,262

Subtotal 17,062 5,774 15,877 3,497 3,451 90 4,684 6,263 706 57,404

Reserve forces[5]

Navy 1,291 543 732 226 811 133 131 1,049 4 4,920

Army 3,482 2,446 3,179 1,117 1,500 451 518 889 3 13,585

Air Force 1,171 378 1,255 426 291 55 124 951 1 4,652

Subtotal 5,944 3,367 5,166 1,769 2,602 639 773 2,889 8 23,157

Total ADF 23,006 9,141 21,043 5,266 6,053 729 5,457 9,152 714 80,561

APS[6]

APS (Defence) 2,041 2,564 1,108 1,951 355 81 268 6,991 72 15,431

APS (DMO) 1,040 1,356 284 255 182 21 1,393 5 4,536

Total APS 3,081 3,920 1,392 2,206 537 81 289 8,384 77 19,967

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 (Commonwealth), Queanbeyan (NSW) and Bungendore (NSW).

3. Employees posted overseas 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 figures for APS include 1,235 APS employees who are also counted as Reserve members.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 145

Table 8.17: Star-ranked officers, 30 June 2015

Total star rank[1, 2] 2014‐15 promotions[3] 2014‐15 separations[4, 5]

Men Women Total Men Women Total Men Women Total

Four star

Navy ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Army ‐ ‐ ‐ ‐ ‐ ‐ 1 ‐ 1

Air Force 1 ‐ 1 1 ‐ 1 ‐ ‐ ‐

Three star

Navy 3 ‐ 3 ‐ ‐ ‐ 1 ‐ 1

Army 2 ‐ 2 1 ‐ 1 2 ‐ 2

Air Force 1 ‐ 1 ‐ ‐ ‐ ‐ ‐ ‐

Two star

Navy 13 1 14 2 ‐ 2 4 ‐ 4

Army 14 1 15 3 ‐ 3 4 ‐ 4

Air Force 11 ‐ 11 3 ‐ 3 2 ‐ 2

One star

Navy[6] 35 4 39 3 3 6 5 ‐ 5

Army[6] 49 6 55 7 1 8 8 1 9

Air Force[6] 35 3 38 8 ‐ 8 5 1 6

Total 164 15 179 28 4 32 32 2 34

Notes

1. Officers on acting or higher duties are not included.

2. Figures only include those Reserve star ranked officers rendering continuous full-time service.

3. Promotions include those officers promoted between levels and those officers promoted temporarily.

4. Separations include only permanent officers who have separated from Defence or transferred to Reserves.

5. Separations also include those officers promoted temporarily when they revert to their substantive rank.

6. Figures include three Chaplains (one from each Service).

146 DEFENCE ANNUAL REPORT 2014‐15

Table 8.18: APS Senior Executive Service employees, 30 June 2015

Total SES[1] 2014‐15 engagements[2, 3] 2014‐15 separations[2, 4]

Men Women Total Men Women Total Men Women Total

Senior Executive

Secretary 1 ‐ 1 ‐ ‐ ‐ ‐ ‐ ‐

Band 3 11 2 13 ‐ ‐ ‐ ‐ 1 1

Band 2[5] 20 5 25 2 ‐ 2 5 1 6

Band 1 57 24 81 1 1 2 6 3 9

Chief of Division

Grade 3 ‐ ‐ ‐ ‐ ‐ ‐ 2 ‐ 2

Grade 2 8 3 11 ‐ ‐ ‐ ‐ ‐ ‐

Senior Executive

Relief staff[6] 20 14 34 ‐ ‐ ‐ ‐ ‐ ‐

Total 117 48 165 3 1 4 13 5 18

Notes

1. Figures in this table show actual employee numbers at their substantive level, but not staff on longer-term unpaid leave.

2. Gains and losses do not reflect movement of officers between levels in each of the Senior Executive and Chief of Division streams.

3. Engagement figures include new engagements and transfers from other agencies only.

4. Separation figures include resignations, retirements, redundancies, and promotions and transfers to other departments.

5. Senior Executive Service Band 2 includes Medical Officer Grade 6.

6. Relief staff indicates non-SES officers who are temporarily acting in SES/Chief of Division positions while the incumbents are taking leave, acting in higher positions or on overseas duty.

Table 8.19: APS personnel by gender, 30 June 2014 and 30 June 2015

30 June 2014[1] 30 June 2015

Full-time Part-time[2] Total Full-time Part-time[2] Total

Ongoing employees

Men 12,309 216 12,525 11,569 223 11,792

Women 7,453 1,120 8,573 6,929 1,164 8,093

Total ongoing 19,762 1,336 21,098 18,498 1,387 19,885

Non-ongoing employees

Men 48 9 57 41 18 59

Women 34 2 36 20 3 23

Total non-ongoing 82 11 93 61 21 82

Men 12,357 225 12,582 11,610 241 11,851

Women 7,487 1,122 8,609 6,949 1,167 8,116

Total APS 19,844 1,347 21,191 18,559 1,408 19,967

Notes

Figures in this table show employee numbers (substantive headcount). Figures include paid and unpaid employees.

1. Some 30 June 2014 figures have been adjusted from what was reported in the Defence Annual Report 2013‐14 to account for retrospective transactions.

2. Part-time employees are those with weekly hours less than the standard hours. The category does not relate to employees in part-time positions.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 147

Table 8.20: ADF permanent and Reserve forces and APS by gender, 30 June 2014 and 30 June 2015

30 June 2014[1] 30 June 2015

Men % Women % Men % Women %

Navy permanent

Trained force

Officers 2,031 14.8% 495 3.6% 2,032 14.6% 489 3.5%

Other ranks 7,071 51.4% 1,562 11.4% 7,084 50.8% 1,607 11.5%

Training force

Officers 608 4.4% 157 1.1% 605 4.3% 158 1.1%

Other ranks 1,486 10.8% 348 2.5% 1,600 11.5% 374 2.7%

Total Navy 11,196 81.4% 2,562 18.6% 11,321 81.2% 2,628 18.8%

Army permanent

Trained force

Officers 4,546 15.7% 809 2.8% 4,487 15.4% 816 2.8%

Other ranks 17,458 60.1% 2,023 7.0% 17,863 61.2% 2,150 7.4%

Training force

Officers 805 2.8% 190 0.7% 827 2.8% 210 0.7%

Other ranks 2,816 9.7% 400 1.4% 2,495 8.5% 345 1.2%

Total Army 25,625 88.2% 3,422 11.8% 25,672 87.9% 3,521 12.1%

Air Force permanent

Trained force

Officers 3,354 23.6% 846 5.9% 3,368 23.6% 873 6.1%

Other ranks 7,295 51.3% 1,438 10.1% 7,229 50.7% 1,464 10.3%

Training force

Officers 529 3.7% 156 1.1% 535 3.8% 190 1.3%

Other ranks 470 3.3% 142 1.0% 473 3.3% 130 0.9%

Total Air Force 11,648 81.9% 2,582 18.1% 11,605 81.4% 2,657 18.6%

ADF permanent

Trained force

Officers 9,931 17.4% 2,150 3.8% 9,887 17.2% 2,178 3.8%

Other ranks 31,824 55.8% 5,023 8.8% 32,176 56.1% 5,221 9.1%

Training force

Officers 1,942 3.4% 503 0.9% 1,967 3.4% 558 1.0%

Other ranks 4,772 8.4% 890 1.6% 4,568 8.0% 849 1.5%

Total ADF permanent 48,469 85.0% 8,566 15.0% 48,598 84.7% 8,806 15.3%

148 DEFENCE ANNUAL REPORT 2014‐15

30 June 2014[1] 30 June 2015

Men % Women % Men % Women %

Reserves[2]

Navy 4,005 16.7% 1,035 4.3% 3,908 16.9% 1,012 4.4%

Army 12,625 52.7% 1,925 8.0% 11,752 50.7% 1,833 7.9%

Air Force 3,476 14.5% 889 3.7% 3,709 16.0% 943 4.1%

Total Reserves 20,106 83.9% 3,849 16.1% 19,369 83.6% 3,788 16.4%

APS[3]

APS (Defence) 9,009 42.5% 6,876 32.4% 8,669 43.4% 6,762 33.9%

APS (DMO) 3,573 16.9% 1,733 8.2% 3,182 15.9% 1,354 6.8%

Total APS 12,582 59.4% 8,609 40.6% 11,851 59.4% 8,116 40.6%

Notes

Figures in this table show employee numbers (substantive headcount). Percentages are calculated against the individual Service totals. Percentages may not sum due to rounding.

1. Some 30 June 2014 figures have been adjusted from what was reported in the Defence Annual Report 2013‐14 to account for retrospective transactions.

2. Reserves include all active members (training, deployed and 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 2015 figures for APS include 1,235 APS employees who are also counted as Reserve members.

84.7%

48,598 15.3% 8,806

59.4%

11,851

40.6% 8,116

30 JUNE 2015

Defence Workforce

Table 8.20 (continued)

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 149

Australian Defence Force Gap Year programme The Australian Defence Force (ADF) Gap Year programme aims to give Australian school-leavers and young adults an exposure to the military way of life, and the roles and opportunities on offer in the ADF. First implemented in 2007, the Gap Year programme was re-introduced in 2015 with an intake of 260 members, made up of 200 Army and 60 Air Force entrants.

Categories open to Gap Year entrants include artilleryman, driver specialist, rifleman, and quartermaster in the Army, as well as airbase protection in the Air Force. These categories give Gap Year entrants a wide variety of experiences within the military environment, and also allow for gender-diverse employment roles throughout the Army and Air Force.

Of the 260 entrants in the 2015 intake, 46 (17.7 per cent) were female, 8 (2.7 per cent) identified as coming from an Indigenous Australian background, and 15 (5.3 per cent) were from a non-English-speaking background.

Aircraftwoman Lauren Smith (left) deferred entry to the University of Melbourne to participate in the 2015 Gap Year programme after completing Year 12 and achieving

an Australian Tertiary Admission Rank of 97.8 from her studies of mathematics, physics and chemistry-related subjects.

Originally from Wesley Vale, Tasmania, Lauren is currently posted to Number 2 Security Forces Squadron Detachment, Townsville, Queensland, where she will be employed in airbase security roles.

Joining the ADF was a long-term plan for Lauren. She was intrigued by the ‘try before you buy’ allure of the Gap Year programme and believed that the programme presented an opportunity

to experience Defence firsthand and to discover

more about Defence and the opportunities it offers for future careers.

‘While the training was challenging and at times stressful and strenuous, it was also adrenaline-filled’, Lauren said. ‘I don’t believe I’d be able to work the way I do without that training.’

On completion of the Gap Year programme, Lauren intends to study for an aeronautical engineering degree at the Australian Defence Force Academy before undertaking pilot training in the Air Force.

Private Maddison Rio (left) joined the Army Gap Year programme with a view to undertaking a positive and rewarding experience before starting her tertiary studies.

Originally from Townsville, Queensland, Maddison is currently posted to 1 Combat Services Support Battalion in Darwin, where she is employed as an administrative clerk.

‘I wanted to do something different and worthwhile before going to university’, Maddison said. ‘After travelling to Japan and Korea on a military study tour in Year 12, I was inspired and motivated to apply for the Gap Year programme.’

Maddison’s family travelled from Townsville to attend her march-out parade at Kapooka, New South Wales, and are very proud of her achievements in the Army. Her mother remarks that ‘Maddison is very independent and grown up now’.

On completion of the Gap Year programme, Maddison is interested in studying finance and human resources. She believes that the role of administrative clerk will provide her with good insight into the world of human resources.

FEATURE

150 DEFENCE ANNUAL REPORT 2014‐15

Diversity in Defence The Defence Diversity and Inclusion Strategy 2012‐2017 articulates the five strategic goals that underpin successful diversity and inclusion in Defence. The strategy also identifies immediate diversity priorities for Defence. These 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, including:

• women

• Indigenous Australians

• people from culturally and linguistically diverse backgrounds

• people with disability

• lesbian, gay, bisexual, transgender and intersex people.

Defence’s professionalism and capability are underpinned by its ability to remain linked to the broadest cross-section of Australian society. While the diversity profile of the Defence workforce is improving, it does not reflect that of the Australian community. Defence needs to access the available talent in Australia to harness the capability benefit and improved decision-making that a diverse workforce generates.

Defence continues to implement programmes and initiatives that harness the diverse knowledge, skills and attributes of its people. Through diversity, Defence gains the varied perspectives needed to deal with complex problems and develop innovative solutions.

Defence is ensuring that its culture gives confidence to the Australian people that the organisation is just, inclusive and fair-minded.

Women in Defence

Defence has furthered its efforts to implement changes in the workplace to ensure greater representation of women, specifically in leadership positions. The Secretary and Chief of the Defence Force Gender Equality Advisory Board, composed of public and private sector members, has continued to advise Defence on these issues. The board’s main areas of focus in 2014‐15 were increasing accountability for gender inclusion and flexible work practices.

Women in the APS

Over the previous three years, all recommendations from the 2011 Review of employment pathways for APS women in Defence have been implemented. The representation of women in the Defence APS has not significantly changed, and is well below that of the wider APS. In 2014‐15 further initiatives addressed the structural and cultural barriers preventing women from achieving their full potential and full participation. These initiatives included:

• a Leadership Inclusion Programme, delivered to all SES officers, to raise understanding of the impact of bias, build individual and collective commitment to creating an inclusive workplace, and develop the capabilities required to be an effective and inclusive leader

• targeted marketing of women for Defence graduate programmes and more ambitious gender targets for the recruitment of APS graduates

• mentoring and coaching programmes, including tools and materials available to the Defence workforce through the intranet

• increased representation of women in Executive Level 1 and Executive Level 2 talent programmes

• stronger senior leadership support for flexible work arrangements, including raising the level of approval required for agreement of part-time arrangements to encourage greater access to these arrangements

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 151

• promotion of the Male Champions of Change initiative across Defence senior women’s mentoring and networking groups

• the development of a gender inclusion kit to use in a workshop-based approach aimed at challenging gender inclusion myths and equipping employees to advance gender equality

• cultural awareness activities in specific areas in Defence to raise understanding of the impact of unconscious bias.

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 remains committed to a range of strategies and targets required to achieve the recommendations of this review.

The ‘Women in the ADF’ report is published as an online supplement to the Defence Annual Report for the third time this year. The report addresses elements of Broderick Phase 2 recommendation 3, including women’s participation, women’s experience and access to flexible work. It is also the mechanism for the Services to report against achievements for recommendation 6—promotional gateways; recommendation 9—recruitment targets; and recommendation 13—flexible work arrangements targets.

The report presents a range of workforce and attitudinal data and compares the current year’s data with that of the previous year to gain an indication of the progress Defence has achieved. Data is supplemented by simple commentary and graphics to facilitate an understanding of the current status of these metrics and their movement.

The ‘Women in the ADF’ report shows that, since the commencement of Pathway to Change: Evolving Defence Culture and the implementation of the Broderick Phase 2 recommendations, the ADF has put considerable effort into growing and advancing the female ADF workforce. In 2014‐15 the participation rate of women in the ADF reached 15.3 per cent, an increase from 14.3 per cent in June 2013. The report also highlights areas that require more comprehensive analysis, allowing Defence to prioritise further research on gender diversity.

Defence will continue to produce a ‘Women in the ADF’ report each year. This will enable an accurate measurement of progress on women’s employment and experience, identify areas of concern and highlight successful initiatives across the three Services.

The ‘Women in the ADF’ report is available online.

Removal of gender restrictions from ADF combat role employment categories

Defence is well into the implementation of the removal of gender restrictions from ADF combat role employment categories. Defence will begin direct recruitment into all combat role employment categories by 2016.

A phased implementation plan was endorsed by the Government in June 2012, with progress reflected in Table 8.21. Key milestones fully achieved in 2011‐12, 2012‐13 and 2013‐14 are reported in the Defence annual reports for those years. The final reporting on this initiative will be made following completion of the implementation plan in 2015‐ 16. Pathway to Change: Evolving Defence Culture, as an enabling initiative, will continue to be reported separately.

152 DEFENCE ANNUAL REPORT 2014‐15

PROFILE: Louise DesJardins

Integrating the gender perspective in Talisman Sabre 2015 RAAF Williamtown’s Wing Commander Louise DesJardins, Executive Officer 41 Wing, will be the first ADF gender adviser on board the USS Blue Ridge for the upcoming Defence Exercise Talisman Sabre 2015.

Talisman Sabre is a biennial combined Australian and US training activity, designed to train, and improve combat readiness between, the respective forces.

The inclusion of a gender adviser within the exercise comes as Defence embraces the Australian National Action Plan on Women, Peace and Security 2012‐2018. With United Nations Security Council Resolution 1325 on Women, Peace and Security as its blueprint, the plan aims to increase operational effectiveness where conflict affects women and girls.

‘In the role, I will be providing advice to the Senior US Commander and his staff to ensure that a gender perspective is incorporated into the conduct of the exercise’, Louise said.

‘As this is the first time that considerations about women, peace and security have been included in such a large-scale multinational exercise, it will be a learning process at all levels.’

Louise said she expects the role to be both exciting and challenging: ‘I’ll be expected to have a high-level understanding of women, peace and security, and be ready to recognise situations and scenarios that need consideration within that framework’, she said.

‘It’s incredibly important to have the ear of the commander to enable him to have the right information at the right time so that decisions can be made that have the principles of women, peace and security at their core. There will be gender advisers across the exercise who will

be looking at how we can learn from it to improve our operational effectiveness for the future.’

Both Australia and the United States have released national action plans, which outline what will be done to integrate a gender perspective within peace and security efforts, protect women’s and girls’ human rights, and promote their participation in conflict prevention, management and resolution.

‘We have to be able to implement that plan in military operations and this exercise is one of the steps in doing so’, she said.

‘We need to ensure that the women, peace and security perspective eventually becomes business as usual in all our peace and security activities. We can assist in making a sustained difference to the lives of women and girls around the world and a lasting contribution to global peace and security. Australia has a responsibility to ensure that the rights of women and girls are protected and that women are empowered to participate in formal peace and security processes.’

Original article and photograph courtesy of Nikki Taylor and the Air Force Association Advocate.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 153

• Met • Substantially met • Partially met • Not met | See ‘User guide’ on page ii for full explanation.

Table 8.21: Progress on removal of gender restrictions in the ADF since June 2012

Key milestone Status

Corporate

Pathway to Change: Evolving Defence Culture • • • •

Pathway to Change continues to make considerable progress.

Navy

New Generation Navy (cultural change programme) • • • •

Ongoing activity. This milestone is due for completion by December 2015.

Support mechanisms developed • • • •

Ongoing activity. This milestone is due for completion by December 2015.

Army

Implementing cultural change programmes • • • •

Ongoing activity. The milestone is due for completion by December 2015.

Amend policy/procedures and training documents • • • •

Ongoing activity. This milestone is due for completion by December 2015.

Air Force

Cultural reform initiatives

• • • •

Ongoing activity. Specific activities related to inclusion and the removal of gender restrictions are scheduled to be completed by December 2015. Ongoing activities will be rolled into the broader Air Force cultural reform programme.

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 programmes for Indigenous Australians with the aim of improving individuals’ access to employment opportunities and working with remote communities on infrastructure and environmental conditions.

In 2014‐15, Indigenous participation in the ADF permanent force increased from 1.3 per cent to 1.4 per cent, while the Defence APS participation rate increased from 1.0 per cent to 1.2 per cent. Table 8.22 gives further details.

Several initiatives from the Defence Indigenous Employment Strategy have advanced, including the greater use of ‘affirmative measures’ positions across the APS workforce; the development of the Defence Reconciliation Action Plan 2015‐17; the Defence Indigenous University Support Programme; and the Australian Indigenous Leadership Centre Certificate IV in Indigenous Leadership course. The Certificate IV course has been introduced to support retention and development of Indigenous personnel. The course aims to provide professional development opportunities for Indigenous personnel by building skills for future career progression.

Through the Australian Public Service Commission’s Indigenous Pathways programme, Defence has increased its 2014‐15 intakes for the Defence APS traineeship and cadetship programmes. Defence is also participating in the Department of Human Services’ Indigenous Apprenticeship (traineeship) programme.

The number of entry-level programme participants for the Defence APS grew from eight in 2013 to 88 in 2015, and is projected to increase to 100 in 2016. Defence is also increasing its APS Indigenous representation through

154 DEFENCE ANNUAL REPORT 2014‐15

advertising up to 135 affirmative measures positions, which will be located across Australia, at the APS 2 to EL 2 level. These roles are important to Defence outcomes and to lifting its cultural capability.

Defence continued to conduct a range of programmes 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 programmes. These courses aim to develop participants’ knowledge, confidence and individual skills to prepare them for a career in the ADF or 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 engage in a number of events across the country during NAIDOC Week and National Reconciliation Week to celebrate Aboriginal and Torres Strait Islander culture.

Table 8.22: Defence Indigenous employees as at 1 July 2014 and 1 July 2015

1 July 2014

Total %

1 July 2015

Total %

ADF

Permanent 750 1.3% 832 1.4%

Active Reserve 462 1.9% 440 1.9%

Navy

Permanent 229 1.7% 264 1.9%

Active Reserve 34 0.7% 34 0.7%

Army

Permanent 387 1.3% 421 1.4%

Active Reserve 397 2.7% 370 2.7%

Air Force

Permanent 134 0.9% 147 1.0%

Active Reserve 31 0.7% 36 0.8%

APS

Ongoing 210 1.0% 237 1.2%

Non-ongoing 1 1.1% 1 1.2%

Notes

Active Reserve figures include continuous full-time service.

Data for this table is reliant on self-identification on the Defence HR system. Therefore, the data is likely to under-report actual rates.

Last year’s numbers will not match those provided in the report from the same month last year. This is because these numbers are updated to include changes in self-identification that have been made within the last 12 months.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 155

People from a culturally and linguistically diverse background In 2014‐15, Defence gave greater focus to culturally and linguistically diverse (CALD) communities. Defence is seeking to reflect the community it serves and is currently identifying what Defence’s priority capability areas are for CALD engagement; this includes developing initiatives and programmes for both ADF members and APS employees that are aimed at all aspects of the employee lifecycle.

In 2014‐15, Defence developed a CALD Action Plan, which has an initial focus on ADF recruitment.

Defence has begun work on attracting individuals from CALD backgrounds into specific ADF employment categories, such as health, engineering and IT. Defence Force Recruiting is also developing a specific media plan to further engage with CALD communities.

Defence’s CALD initiatives complement existing Defence efforts to build a diverse and inclusive workforce under Pathway to Change: Evolving Defence Culture and the Defence Diversity and Inclusion Strategy 2012‐2017.

Defence is committed to recognising the importance of people’s religious faiths. A significant step in creating an inclusive environment has been the appointment of a Muslim representative to the Defence Religious Advisory Committee to the Services. This will ensure that those ADF members of Islamic faith have appropriate representation and are further supported in their military careers.

People with disability Defence continues to support people with disability, and increase Defence’s attractiveness as an employer through a range of programmes and initiatives. These include:

• the Defence Intellectual Disability Employment Initiative, which offers ongoing APS employment opportunities to people with intellectual disability

• the Defence Employee Network, which is open to people with disability, their supervisors, and employees with an interest in disability

• the Reasonable Adjustment Passport, which has been introduced to support people with disability to negotiate the workplace adjustments they require to eliminate barriers to the workplace

• the Defence Administrative Assistance Programme, currently located in Canberra and at Gallipoli Barracks at Enoggera, is being expanded to six other Defence locations to provide employment opportunities for people with disability through community partnerships

• the Defence Paralympian Programme, which offers non-ongoing employment for 12 months to Paralympians

• the APS RecruitAbility Scheme, which continues to be applied to all advertised APS positions in Defence

• the Defence Disability Champion Programme, which has three senior Defence leaders as Disability Champions who provide support, advice and advocacy on issues relating to disability

• the celebration of the International Day of People with Disability on 3 December each year.

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

156 DEFENCE ANNUAL REPORT 2014‐15

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 was published in 2014 on the Department of Social Services website (www.dss.gov.au).

A key aspect of Defence’s disability support is to grow its people’s confidence to report any disabilities. Like many other agencies, Defence has seen a slow increase in the number of people identifying as having a disability. Comprehensive and accurate disability information will assist Defence to understand the nature of the workforce, provide more targeted disability training, advice and support and focus on improving workforce culture and social inclusion.

Table 8.23 gives details on participation by people with disability in the Defence workforce.

Table 8.23: Defence employees with disability as at 1 July 2014 and 1 July 2015

1 July 2014

Total %

1 July 2015

Total %

ADF

Permanent 255 0.4% 262 0.5%

Active Reserve 114 0.5% 117 0.5%

Navy

Permanent 63 0.5% 65 0.5%

Active Reserve 31 0.6% 32 0.7%

Army

Permanent 144 0.5% 146 0.5%

Active Reserve 69 0.5% 67 0.5%

Air Force

Permanent 48 0.3% 51 0.4%

Active Reserve 14 0.3% 18 0.4%

APS

Ongoing 657 3.1% 658 3.3%

Non-ongoing ‐ ‐ ‐ ‐

Notes

Active Reserve figures include continuous full-time service.

Data for this table is reliant on self-identification on the Defence HR system. Therefore, the data is likely to under-report actual rates.

Last year’s numbers will not match those provided in the report from the same month last year. This is because these numbers are updated to include changes in self-identification that have been made within the last 12 months.

Lesbian, gay, bisexual, transgender and intersex people Defence has a number of lesbian, gay, bisexual, transgender and intersex (LGBTI) initiatives in place that enhance inclusiveness and provide additional support and networks for LGBTI people. Defence continues to engage with other government bodies and military organisations, as well as supporting research in the LGBTI space.

Each year, Pride in Diversity Australia issues the Australian Workplace Equality Index (AWEI), a benchmarking initiative that assesses organisations’ commitment to LGBTI workplace practices. Participation in this index provides Defence with comprehensive feedback on its LGBTI inclusiveness. At the 2015 AWEI awards, Defence was jointly recognised, with another public sector agency, as the top public sector employer for LGBTI people. Defence was also identified as a Silver status employer for an inclusive workplace.

Further information on diversity in the Defence workforce is available online.

PEOPLE

08 CH

DEFENCE ANNUAL REPORT 2014‐15 157

FEATURE

Masters of their fate The courage and determination of more than 400 wounded warriors demonstrated the true meaning of the Invictus Games held in London from 10 to 14 September 2014.

The Invictus Games are an international adaptive multi-sport competition for current and former military personnel who have been wounded, injured or become ill in the service of their country.

On the final day of the four-day sporting event, athletes joined a crowd of close to 26,000 at Queen Elizabeth Olympic Park for a concert featuring stars such as the Foo Fighters and James Blunt.

After four days of intense commitment, the Australian team marched onto the stage to receive a medallion commemorating their involvement.

They were joined by athletes from Afghanistan, Canada, Denmark, Estonia, France, Germany, Georgia, Italy, the Netherlands, New Zealand, the United Kingdom and the United States.

His Royal Highness Prince Harry passed on a message from Her Majesty Queen Elizabeth II, who said she had followed the competition and was deeply moved by the courage, determination and talent of the athletes.

‘All of you have used the power of sport to enhance your own recovery and to raise wider awareness of the enormous challenges faced by wounded veterans’, she said.

‘The success of these Games can be measured not by medals won, but by the renewed sense of purpose and confidence in your abilities that you have gained.’

Medal tallies were not officially recorded for the Invictus Games, but the combined ADF/RSL team won close to 20 events, including athletics, cycling, archery, swimming and rowing.

The team also made an impression on the other nations with their style and sportsmanship during the wheelchair rugby and wheelchair basketball events.

Prince Harry said the Games shone a ‘spotlight on the unconquerable character of servicemen and women and their families—their invictus spirit’.

‘These Games have been about seeing guys sprinting for the finish line and then turning around to clap the last man in’, he said.

‘They have been about teammates choosing to cross the line together—not wanting to come second, but not wanting the other guys to either.

‘These Games have shown the very best of the human spirit.’

Australian athletes preparing to compete at the Invictus Games gather in Sydney before their departure to London.

CHAPTER NINE

9

Corporate governance

CORPORATE GOVERNANCE

09 CH

DEFENCE ANNUAL REPORT 2014‐15 159

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, as at 30 June 2015

Minister for Defence

Strategic

Command Group

Defence Committee

Defence Civilian Committee

Defence Capability and Investment

Committee

Chiefs of Service Committee

Chief of the Defence Force Secretary

Gender Equality Advisory Board

Secretary and Chief of the Defence Force Advisory

Committee

Defence Audit and Risk Committee

Defence Committee

The Defence Committee considers the most significant policy and management issues and drives whole-of-Defence performance through the enterprise management framework, including the corporate planning process. It meets monthly.

The committee is chaired jointly by the Secretary and the Chief of the Defence Force (CDF). Group Heads and Service Chiefs are standing members. Other participants are co-opted as required.

Secretary and Chief of the Defence Force Advisory Committee

The Secretary and Chief of the Defence Force Advisory Committee is the senior committee for the week-to-week management of Defence. It is the default committee for business that requires the attention of the Secretary and the CDF, providing direction and acting as a decision-making body.

The committee is chaired jointly by the Secretary and the CDF. Other participants are co-opted as required.

Defence Civilian Committee

The Defence Civilian Committee was established to focus on matters affecting the Defence APS workforce, especially development and training needs, gender, and employment of Indigenous Australians and people with disability.

The committee is chaired by the Secretary. It consists of Group Heads, the Vice Chief of the Defence Force (VCDF), and two division heads and one branch head on a rotational basis.

160 DEFENCE ANNUAL REPORT 2014‐15

Defence Capability and Investment Committee

The Defence Capability and Investment Committee ensures that resourcing, including capital investment and operating costs, is consistent with Defence’s strategic priorities and resourcing strategy. Its role includes examining the overall shape of capability and the balance of resource allocation within the Defence Capability Plan, force structure and disposition, through-life costs and whole-of-life affordability.

The committee is supported by the subordinate Defence Capability Committee, which looks at individual projects as well as preliminary programming of the major capital budget. As a general principle, the Defence Capability and Investment Committee will only consider items that cannot be resolved by the lower-level committees.

The committee is chaired by the Secretary. It consists of the CDF, the VCDF, the Associate Secretary, the Service Chiefs, the Chief of the Capability Development Group, the Chief Executive Officer DMO, the Deputy Secretary Strategy and the First Assistant Secretary Capability Investment and Resources.

Defence Audit and Risk Committee

The Defence Audit and Risk Committee is a central element of governance in Defence. It provides independent advice on governance within Defence to the Secretary and the CDF.

The committee’s roles and responsibilities are to review governance and assurance frameworks, including risk management, the internal controls framework, compliance, accountability and audit. A major element of its role is to assist Defence in building effective risk management practices and to advise the Secretary and the CDF on the appropriate limits to Defence’s risk exposure. The committee’s charter has been reviewed in light of the Public Governance, Performance and Accountability Act 2013, which took effect on 1 July 2014.

The committee’s membership comprises up to four senior private sector members (one position is currently vacant), the Associate Secretary and the VCDF. Collectively, these members have significant experience in financial management, governance and risk management in both operational and non-operational contexts.

Chiefs of Service Committee

The Chiefs of Service Committee provides military advice to the CDF to assist in the command of the Australian Defence Force (ADF) and in providing military advice to the Government.

The committee is chaired by the CDF. It consists of the Secretary, the VCDF, the Service Chiefs, the Deputy Secretaries for Strategy and Defence People, the Commander Australian Defence College, the Chief of the Capability Development Group and the Chief of Joint Operations.

Strategic Command Group

The Strategic Command Group is the primary advisory forum that supports the CDF’s role as Commander of the ADF. The Strategic Command Group also serves as an important forum for providing key members of the Defence Senior Leadership with situational awareness of ADF operations, critical incidents and other strategic matters. The CDF uses the Strategic Command Group to issue direction and guidance on ADF matters and to coordinate the ADF response to major critical incidents.

The committee is chaired by the CDF. It consists of the Secretary, the VCDF, the Service Chiefs, the Chief of Joint Operations and the Deputy Secretaries for Strategy and Intelligence and Security.

CORPORATE GOVERNANCE

09 CH

DEFENCE ANNUAL REPORT 2014‐15 161

Gender Equality Advisory Board

The Gender Equality Advisory Board is a direction-setting and advisory body for driving and shaping the strategic direction of the Secretary’s and the CDF’s gender equality priorities within the broader Defence cultural reform agenda. The board considers the most significant gender equality issues applicable to the Defence workforce, and monitors and evaluates whole-of-Defence performance in addressing these matters.

The Secretary and the CDF use the board’s collective gathering to incorporate community perspectives on how to make Defence a more inclusive organisation and one that proactively aligns its values and accepted behaviour with evolving community standards.

The board comprises members from the public and private sectors and is jointly chaired by the Secretary and the CDF.

Public Governance, Performance and Accountability Act 2013 On 1 July 2014, the Public Governance, Performance and Accountability Act 2013 (PGPA Act) replaced the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997. The PGPA Act established a system of governance and accountability for public resources, with an emphasis on planning, performance and reporting.

The PGPA Act sets out the main principles and requirements of the Commonwealth Resource Management Framework. The framework includes the PGPA Rule 2014, the Commonwealth Procurement Rules and the Commonwealth Grants Rules and Guidelines. These instruments establish the requirements and procedures necessary to give effect to the governance, performance and accountability measures covered by the Act. Defence complies with the provisions of the PGPA Act and Rule and other instruments relating to financial management through the Accountable Authority Instructions issued by the Secretary and associated departmental guidance.

In 2014‐15, the Chief Finance Officer Group arranged for the promulgation of the new financial delegations, Accountable Authority Instructions and associated financial guidance required under the PGPA Act.

Fraud and ethics In accordance with the Commonwealth Fraud Control Framework 2014, Defence continues to meet its mandatory obligations to prevent, detect and deal with fraud. Defence has a comprehensive fraud control programme established through the Defence Fraud Control Plan No. 11. Underpinning the plan is a rigorous fraud risk assessment programme focusing on the enterprise-wide vulnerabilities and risk factors within Defence’s diverse operating environments.

The ethics and fraud awareness programme continues to be an integral part of Defence’s fraud control programme. It comprises face-to-face or e-learning courses, as well as newsletters and an intranet site for information and advice. It is mandatory for staff to participate in the programme at least every two years. In 2014‐15, more than 66,000 Defence and DMO personnel completed this programme.

In 2014‐15, there were 262 fraud investigations registered within Defence and DMO and 242 investigations completed (some of those completed were registered in previous years). Approximately 21 per cent of completed investigations resulted in criminal, disciplinary or administrative action. Of these, approximately 58 per cent related to disciplinary action under the Defence Force Discipline Act 1982.

162 DEFENCE ANNUAL REPORT 2014‐15

In 2014‐15, the determined fraud loss for completed investigations was $0.48 million, while monies recovered were just over $0.16 million. Table 9.1 shows detected fraud over the past five financial years, averaging approximately $1.02 million a year within a range of $0.4 million to $1.7 million.

Table 9.1: Determined fraud losses and recoveries, 2010‐11 to 2014‐15

2010‐11 2011‐12 2012‐13 2013‐14 2014‐15

Loss $916,419 $1,102,979 $835,685 $1,770,422 $480,937

Recovery $422,691 $493,210 $393,902 $133,457 $161,693

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.

Audit Branch provided internal audit services in accordance with the audit work programme. The programme is endorsed by the Defence Audit and Risk Committee and approved by the Secretary and the CDF. The programme is developed in consultation with Group Heads and Service Chiefs. It is designed to address areas of high-level risk or activities with potential control deficiencies that could lead to significant financial loss.

Audit Branch also monitors and reports to the Defence Audit and Risk Committee, the Defence Committee and the Minister for Defence on the status of the implementation of recommendations from Audit Branch and the Australian National Audit Office (ANAO).

In 2014‐15, Audit Branch issued 23 audit reports and completed eight management-directed tasks. In addition, the ANAO completed six performance audits on Defence, and one cross-portfolio audit involving Defence, to which Audit Branch provided direct support.

Public Interest Disclosure Scheme The high number of public interest disclosures allocated to the Defence Public Interest Disclosure (PID) Scheme (which replaced the successful Defence Whistleblower Scheme on 15 January 2014) during this reporting period continues to demonstrate a strong reporting culture within the organisation. The scheme facilitates and encourages reports of suspected wrongdoing; provides support and protection to disclosers; and ensures that suspected wrongdoing is investigated where appropriate.

Defence continues to work closely with the Commonwealth Ombudsman for public interest disclosure reporting purposes, and to ensure continuing improvement in the implementation of the Public Interest Disclosure Act 2013 within the organisation and, more broadly, within the Commonwealth public sector.

Since the Defence PID Scheme began operations, 471 public interest disclosures have been allocated to Defence: 390 in 2014‐15 and 181 in 2013‐14.

CORPORATE GOVERNANCE

09 CH

DEFENCE ANNUAL REPORT 2014‐15 163

Report of the Inspector-General 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 CDF 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 military justice system may be examined and remedied.

The functions of the Office of the IGADF include oversight of the military justice system, internal audits of military justice arrangements in Defence Force units, ships and establishments; the conduct of inquiries into or investigations of matters concerning the military justice system, including inquiries or investigations into the professional conduct of Service Police; the provision of advice on matters concerning the military justice system, including making recommendations for improvement; and the promotion of military justice values across the Defence Force.

During the reporting period the IGADF also became responsible for a number of additional functions, including the investigation of service-related deaths and select incidents, the conduct of independent reviews of ADF redresses of grievance referred to a Service Chief for final decision, and the responsibility to inquire into or investigate any matter concerning the Defence Force if directed to do so by the Minister for Defence or the CDF.

In addition, the reporting requirements for the IGADF changed. The IGADF is required to prepare and give to the Minister for Defence, for tabling in Parliament, a report on the operations of the Office of the IGADF at the end of each financial year. Previously, the requirement was for the IGADF to give a report to the CDF. These changes are intended to enhance the independence and powers of the IGADF and enable improvements to be made to the investigation of service-related deaths and redress of grievance practice.

During the reporting period the operating tempo in the Office of the IGADF increased significantly, particularly in light of the addition of new functions. There was an increase in the number of submissions received for investigation or inquiry, while there was a slight decrease in the number of military justice performance audits completed into the military justice arrangements of ADF units, ships and establishments.

During the reporting period the IGADF received 62 inquiry submissions, an increase of approximately 3 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 trend continued in 2014‐15, when the IGADF resolved 56 submissions by way of inquiry, assessment or review.

In addition to these submissions, the IGADF reviewed 34 Service Police professional standards matters. Of these, 25 became the subject of IGADF investigations and seven were referred back to Service Police for further action. Of the 25 matters investigated by the IGADF, three complaints were substantiated and 19 matters were still being investigated at the end of the reporting period.

The IGADF conducted 46 ADF military justice unit audits, representing approximately 10 per cent of all auditable ADF units. In one of those units, potential material deficiencies were identified. In all, a total of 1,336 recommendations and suggestions to improve military justice arrangements, practices and procedures were made during 2014‐15. The overwhelming majority of the recommendations and suggestions related to minor compliance or procedural issues.

During the conduct of military justice unit audits, 2,525 ADF personnel participated in focus group discussions. This raised the total number of focus group participants to 27,287 since the pilot programme began in 2004. Focus group survey outcomes in 2014‐15 indicate a stronger endorsement and confidence in the military justice system and the chain of command to take action to resolve military justice problems. There remains strong evidence to indicate that incremental cultural change under the Pathway to Change: Evolving Defence Culture programme continued to occur within the ADF during the reporting period.

164 DEFENCE ANNUAL REPORT 2014‐15

Select incident review

The Inspector-General ADF established the Directorate of Select Incident Review to conduct and manage the assessment of, and subsequent inquiries into, deaths in service (including those occurring on operations) and other select incidents following transfer of these responsibilities from the former CDF Commissions of Inquiry Cell.

After notification of a death from the member’s parent Service, the IGADF assesses each case to inform advice to the CDF as to whether the death appears to have arisen out of, or in the course of, the member’s service. These assessments and any inquiry by the IGADF are conducted independently of the chain of command, with the findings and recommendations reported to the CDF. The Defence (Inquiry) Regulations 1985 oblige the CDF to appoint a commission of inquiry into any such case, unless the Minister for Defence specifies in writing that the circumstances do not require it. Under recent amendments to the Defence Act, the responsibility for deciding whether an inquiry into a death in service should take place, and, if so, what form the inquiry should take, was transferred to the IGADF.

In 2014‐15, the IGADF initiated 30 preliminary assessments into deaths in service of ADF members. Of this number, nine have been completed and 21 remain in progress. The IGADF has appointed six inquiries into ADF member deaths. Two inquiries were completed and referred to the CDF for action. They are the inquiry into the death of a soldier on operations in Afghanistan in July 2014 and the inquiry into the death of a soldier in New Zealand while conducting mountain and cold weather training, also in July 2014. The four remaining inquiries are nearing completion.

One legacy inquiry from the previous arrangements remains ongoing. The CDF appointed an inquiry officer on 24 June 2014 to examine an artillery ammunition incident at Shoalwater Bay on 18 March 2014. The inquiry was still being finalised as at 30 June 2015—the issues that have been uncovered are complex and involve various aspects of the commercial support and storage chain for artillery ammunition.

During the reporting period, no new commissions of inquiry were appointed. A part-heard inquiry into the single-vehicle roll-over accident at Holsworthy Military Area on 8 October 2012 has been adjourned while criminal prosecution of the driver takes place.

Military redress of grievance

Three hundred and ninety-two new applications for redress of grievance were received in 2014‐15, a slight decrease on the previous year (Figure 9.2). Four hundred and twenty-five applications received during the current and previous reporting periods were finalised at unit level. Of those, 297 (70 per cent) were not granted, were withdrawn or were not reviewable; the remainder were granted or partly granted. The main areas of complaint are still termination of service decisions, career management issues, and conditions of service entitlements.

A 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. Under the new arrangements that commenced in July 2014, an independent review of the grievance is now conducted by the IGADF and a brief furnished to the CDF or Service Chief for final decision.

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 (28 per cent) of referred complaints. These cases are given the highest priority.

CORPORATE GOVERNANCE

09 CH

DEFENCE ANNUAL REPORT 2014‐15 165

Figure 9.2: Applications for military redress of grievance received and finalised, 2012‐13 to 2014‐15

0

50

100

150

200

250

300

350

400

450

500

320 327

406

425

395 392

Received Finalised

2012 13 2013 14 2014 15

No. of applications

Training related to military justice

Over the reporting period, the Office of the IGADF provided inquiry officer and other military justice‐related training to 2,902 ADF members, either through face-to-face courses and seminars or through e-learning modules. Twenty-five members attended an advanced inquiry officer course, 1,694 undertook inquiry officer training, 616 completed the complaints handling instruction course and a further 415 completed the quick assessment instruction course. The remaining 152 members undertook the administrative sanctions instruction course.

CHAPTER TEN

10 External accountability

EXTERNAL ACCOUNTABILITY

10 CH

DEFENCE ANNUAL REPORT 2014‐15 167

Parliamentary business

In 2014‐15, Defence provided 10 written submissions to various Senate, House of Representatives and joint committee inquiries. Defence witnesses appeared at 25 hearings, providing evidence on a range of issues; took 134 follow-on questions on notice (18 had not yet been tabled as at 30 June 2015); and either tabled or contributed to seven government responses to parliamentary committee reports throughout the year.

To assist parliamentary committee members to gain a better understanding of Defence issues, Defence also provided private briefings on a range of subjects, including matters related to the 2015 Defence White Paper, national security and capability.

Table 10.1: Defence’s parliamentary contribution, 2012‐13 to 2014‐15

Parliamentary contribution 2012‐13 2013‐14 2014‐15

Written submissions 24 8 10

Whole-of-government submissions ‐ 1 ‐

Government responses 2 8 7

Public hearings 16 12 25

Private briefings 4 25 12

Total 46 54 54

Parliamentary committees

Joint committees

Table 10.2 provides information on Defence’s activities in relation to its involvement in joint committees from 1 July 2014 to 30 June 2015.

Table 10.2: Defence’s involvement with joint committees, 2014‐15

Joint committees

Joint Standing Committee on Foreign Affairs, Defence and Trade

Inquiry into government support for Australian Defence industry exports

Progress report for the inquiry into the care of ADF personnel wounded and injured on operations

Inquiry into the human rights issues facing women and girls in the Indian Ocean and Asia‐Pacific region

Review of the Defence Annual Report 2011‐12

Review of the Defence Annual Report 2012‐13

Review of the Defence Annual Report 2013‐14

168 DEFENCE ANNUAL REPORT 2014‐15

Joint committees

Joint Parliamentary Committee on Intelligence and Security

Review of Administration and Expenditure No. 13 (2013‐2014)

Joint Committee of Public Accounts and Audit

Report 447: EPBC Act, Cyber Security, Mail Screening, ABR and Helicopter Program: Review of Auditor-General’s Reports Numbers 32‐54 (2013‐14)

Report 448: Review of the 2013‐14 Defence Materiel Organisation Major Projects Report

Report 443: Review of Auditor-General’s Reports Nos 23 and 25 (2012‐13) and 32 (2012‐13) to 9 (2013‐14)

Report 442: Review of the 2012‐13 Major Projects Report

Review of ANAO Report No. 50 (2013‐14) Cyber Attacks: Securing Agencies’ ICT Systems

Review of ANAO Report No. 52 (2013‐14) Multi-Role Helicopter Program

Review of ANAO Report No. 19 (2014‐15) Management of the Disposal of Specialist Military Equipment

Joint Standing Committee on Public Works

Multi-User Barge Ramp Facility, East Arm, Darwin, Northern Territory

Project AIR 9000 Phase 7—Helicopter Aircrew Training System Facilities Project

Project AIR 7000 Phase 2B—Maritime Patrol Aircraft Replacement

Joint Project 154 Phase 1—Counter Improvised Explosive Device Capability Facilities and Infrastructure Project

Project JP3029 Phase 2—Defence Space Surveillance Telescope Facilities Project

Air 6000 Phase 2A/B—New Air Combat Capability Facilities

Development and construction of housing for Defence at RAAF Base Tindal, Northern Territory

17th Construction Squadron Relocation Infrastructure Project

Joint Standing Committee on Treaties

Report 145: Treaties tabled on 26 August and 2 September 2014

Table 10.2 (continued)

EXTERNAL ACCOUNTABILITY

10 CH

DEFENCE ANNUAL REPORT 2014‐15 169

Senate committees

Table 10.3 provides information on Defence’s activities in relation to its involvement in Senate committees from 1 July 2014 to 30 June 2015.

Table 10.3: Defence’s involvement with Senate committees, 2014‐15

Senate committee

Senate Standing Committee on Foreign Affairs, Defence and Trade

Inquiry into the mental health of ADF serving personnel

The potential use by the Australian Defence Force of unmanned air, maritime and land platforms

Australia’s future activities and responsibilities in the Southern Ocean and Antarctic waters

Processes to support victims of abuse in Defence

Inquiry into the Defence Legislation Amendment (Military Justice Enhancements—Inspector-General ADF) Bill 2014

Senate Standing Committee on Rural and Regional Affairs and Transport

Inquiry into Australia’s transport energy resilience and sustainability

Senate Economics Legislation Committee

Inquiry into the Tax and Superannuation Laws Amendment (2014 Measures No. 6) Bill 2014

Senate Economics References Committee

Inquiry into Australia’s innovation system

Inquiry into the future of Australia’s naval shipbuilding industry

Senate Estimates and questions on notice

Defence attended three Senate Estimates hearings before the Senate Standing Committee on Foreign Affairs, Defence and Trade, in October 2014, February 2015 and June 2015. Defence was asked a total of 359 questions on notice from the three hearings.

In relation to questions taken on notice from the Senate and House of Representatives notice papers during 2014‐15, Defence was asked a total of 134 questions. One response had not been tabled by 30 June 2015.

Table 10.4 provides information on Defence’s activities in relation to the Senate Estimates process from 1 July 2014 to 30 June 2015, and Table 10.5 presents a comparative picture of the number of Defence’s responses to parliamentary questions on notice for the last three years.

170 DEFENCE ANNUAL REPORT 2014‐15

Table 10.4: Defence’s involvement with Senate Estimates, 2014‐15

Senate Standing Committee on Foreign Affairs, Defence and Trade

Supplementary Budget Estimates 2014‐15 Defence witnesses appeared at a hearing on 22 October 2014. There were 180 questions, consisting of 1,302 parts, taken on notice during the hearing.

Additional Estimates 2014‐15 Defence witnesses appeared at a hearing on 25 February 2015. There were 67 questions, consisting of 275 parts, taken on notice during the hearing.

Budget Estimates 2015‐16 Defence witnesses appeared at hearings on 1 and 2 June 2015. There were 112 questions, consisting of 321 parts, taken on notice during the hearing.

Table 10.5 Defence’s questions on notice, 2012‐13 to 2014‐15

Source of questions on notice 2012‐13 2013‐14 2014‐15

House of Representatives/Senate notice paper 167 18 134

Senate Estimates (October, February, June) 440 450 359

Parliamentary inquiries 97 35 134

Total 704 503 627

Judicial decisions and decisions of administrative tribunals On 22 September 2014, following a decision on 28 May 2014 of the Federal Court in Danthanarayana and Another v Commonwealth of Australia and Ors [2014] FCA 552, the first applicant served a further proposed amended statement of claim against the Commonwealth alleging negligence and contraventions of the Fair Work Act 2009. In accordance with the orders of the court on 28 May 2014, the applicant submitted the amended claim to the court and to the Commonwealth for consideration prior to leave being granted to file it. The Commonwealth has opposed leave being granted and is currently awaiting the court’s decision on whether the applicant will be allowed to file the further amended statement of claim.

Defence is currently the respondent in six applications to the Administrative Appeals Tribunal where the applicants seek review of decisions by Defence to reject their claims for compensation under regulation 57 of the Defence Force Regulations 1952 in relation to Defence activities at the Salt Ash Weapons Range. The applicants are the lead group of 102 claimants whose claims for compensation under regulation 57 have been rejected by Defence. The hearing of these applications is listed to commence on 26 October 2015.

On 9 December 2014, the Federal Court heard the matter of Comcare v Commonwealth of Australia ACD88 of 2013. Comcare commenced the civil breach proceeding against Defence on 30 August 2013, seeking a declaration that Defence had breached its duty of care under the Occupational Health and Safety Act 1991 by failing to take all reasonably practicable steps to protect the health and safety at work of its employees; and the imposition of a pecuniary penalty and costs. The proceeding arose out of the death of Lance Corporal Mason Edwards and the wounding of another soldier during a training exercise at Cultana, South Australia, in 2009. The court has reserved its decision.

EXTERNAL ACCOUNTABILITY

10 CH

DEFENCE ANNUAL REPORT 2014‐15 171

On 19 March 2014, in Stack v Chief of Army Department of Defence [2014] FCCA 520, the Federal Circuit Court granted the applicant an extension of time in which to bring an application for judicial review of a decision by the delegate of the Chief of Army in respect of the applicant’s retirement from the Army in December 1971. The delegate had determined that grounds did not exist to support the applicant’s claim that he could have been retired under the Defence Forces Retirement Benefits Act 1948 due to invalidity or physical or mental incapacity. The substantive application under the Administrative Appeals (Judicial Review) Act 1977 alleges that the delegate, in making his decision, was not free from bias, failed to take into account relevant considerations, and took into account irrelevant considerations. Defence opposed the application. The application was heard on 3 November 2014 and the court reserved its decision.

Auditor-General’s reports In 2014‐15, the Auditor-General tabled six performance audit reports relating directly to Defence and the Defence Materiel Organisation, which are listed in Table 10.6, and one report on a cross-portfolio audit involving Defence (Table 10.7).

Table 10.6: Auditor-General’s reports on Defence, 2014‐15

Report Objective

Audit Report No. 17: Retention and Recruitment of Specialist Skills for Navy, tabled 18 December 2014

The audit objective was to examine the effectiveness of the Navy’s strategy for recruiting and retaining personnel with specialist skills. In particular, the Australian National Audit Office (ANAO) assessed whether:

• this strategy supported the Navy in maintaining and building military capability and carrying out its mission

• the plans and activities underpinning this strategy were effectively administered and implemented.

Audit Report No. 19: Management of the Disposal of Specialist Military Equipment, tabled 5 February 2015

The audit objective was to assess the effectiveness of Defence’s management of the disposal of specialist military equipment. The audit considered (i) whether Defence has conducted disposals in accordance with applicable Commonwealth legislative and policy requirements and Defence policies, guidelines and instructions; and (ii) where relevant rules have been departed from, the main reasons and consequences. The audit examined Defence records of selected disposals that have occurred over the last 15 years, especially the period from 2005 to 2013, including actions in response to disposals that did not proceed as intended.

Audit Report No. 27: Electronic Health Records for Defence Personnel, tabled 10 March 2015

The objective of the audit was to examine the effectiveness of Defence’s planning, budgeting and implementation of an electronic health records solution for Defence personnel. The scope of this audit covered the development and implementation phases of the Defence eHealth System, from project inception in 2009 through to the end of 2014, and included a focus on the quality of Defence’s advice to government.

Audit Report No. 30: Materiel Sustainment Agreements, tabled 21 April 2015

The audit objective was to examine Defence’s administration of materiel sustainment agreements and the contribution made by these agreements to the effective sustainment of specialist military equipment.

Audit Report No. 45: Central Administration of Security Vetting, tabled 9 June 2015

The audit objective was to examine whether Defence provides an efficient and effective security vetting service for Australian Government entities through the Australian Government Security Vetting Agency.

Audit Report No. 52: Australian Defence Force’s Medium and Heavy Vehicle Fleet Replacement (LAND 121 Phase 3B), tabled 25 June 2015

The audit objective was to assess the effectiveness of Defence’s management of the acquisition of medium and heavy vehicles, associated modules and trailers for the Australian Defence Force. The audit focused on the acquisition of the medium and heavy vehicle fleet from first pass approval in 2004 through to early 2015.

172 DEFENCE ANNUAL REPORT 2014‐15

Table 10.7: Auditor-General’s cross-portfolio report involving Defence, 2014‐15

Report Objective

Audit Report No. 50: Administration of the Defence Home Ownership Assistance Scheme, tabled 10 June 2015

The objective of the audit was to assess the effectiveness of the administration of the Defence Home Ownership Assistance Scheme by Defence and the Department of Veterans’ Affairs.

Ombudsman’s reports There were no reports by either the Commonwealth or Defence Force Ombudsman under the provisions of section 15 of the Ombudsman Act 1976.

Information Publication Scheme statement 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 on the Information Publication Scheme website at www.defence.gov.au/ips.

Freedom of information Table 10.8 shows the number of requests for information managed under section 15 of the FOI Act in 2014‐15. An additional 14 requests, for amendment or annotation of records of personal information, were managed under section 48 of the FOI Act. Defence managed 27 internal reviews of FOI decisions and provided assistance to the Office of the Australian Information Commissioner in relation to 11 external reviews. Defence was also involved in four matters before the Administrative Appeals Tribunal. Defence remained 100 per cent compliant with the legislative deadlines in 2014‐15.

The FOI Directorate managed an additional 1,052 requests for information outside the FOI Act. Of these, 454 were requests for access to personnel records. These were processed in accordance with section 15A of the FOI Act, which provides for access to be given in such cases through established administrative channels. Defence received 67 courtesy consultations from other government agencies in 2014‐15.

Table 10.8: Requests for access to documents received and completed or otherwise dealt with under section 15 of the FOI Act, 2012‐13 to 2014‐15

2012‐13 2013‐14 2014‐15

Number of requests received 414 433 409

Number of requests finalised (including withdrawn and transferred to another agency) 422 420 414

Number of requests withdrawn 121 125 146

Number of requests transferred to another agency 1 13 7

Total requests finalised under section 15 300 282 261

Number of requests outstanding 32 45 40

EXTERNAL ACCOUNTABILITY

10 CH

DEFENCE ANNUAL REPORT 2014‐15 173

PROFILE: Caroline Chalker Bradford

A varied and rewarding career When Caroline Chalker Bradford started her career in Defence in 1999, she could not have imagined the challenging and rewarding opportunities she would experience in the years to follow. From an entry-level job in the Australian Public Service, she has graduated to senior roles that have given her a deep appreciation of this department.

In 2004, Caroline was appointed Strategic Communication Adviser to the then Chief of Air Force, Angus Houston. It was in that role that her appreciation for the military really began. Caroline took the time to learn more about her forebears: those who had fought and died during World War I at Pozières and Villers-Bretonneux; her great-uncle, who was killed when HMAS Perth was torpedoed by the Japanese in 1942 and posthumously awarded a Distinguished Service Medal; and both her grandfathers, World War II veterans—one who served on HMAS Swan, and the other with RAF Bomber Command.

Among many other experiences, Caroline’s time in Air Force headquarters exposed her to the critical and complex role that the Australian Defence Force (ADF) plays in responding to humanitarian crises; to give just one example, she took part in the initial planning in the days following the 2005 Sumatra earthquake and tsunami.

In 2007, Caroline was selected to attend the Australian Command and Staff College. There, she built on her understanding of the ADF through syndicate participation and studies that related directly to Defence strategy, operational planning, management and leadership.

Caroline then took on the role of Director Strategic Communication for the 2009 Defence White Paper. This brought her into contact with

strategy development at the highest levels and offered tremendous insight into the formulation of whole-of-Defence, and indeed whole-of-government, policy as it relates to the ADF.

Seizing the opportunity to broaden her skills and experience, Caroline then moved away from her comfort zone and took up a role within Strategic Policy Division in counter-terrorism and domestic security. This proved to be very rewarding and she learned a great deal from the experience before returning to the public affairs domain as Director Media Operations from 2010 to 2012.

Today, Caroline is back in Strategic Policy Division in a part-time role as Director Woomera Prohibited Area Coordination Office, where she has the chance to once again work with some of her former Air Force colleagues. Caroline continues to enjoy the new and varied experiences that come from a job in Defence.

Caroline’s husband also works in Defence and they have a two-year-old daughter.

CHAPTER ELEVEN

11 Asset management, procurement and capital investment

ASSET MANAGEMENT, PROCUREMENT AND CAPITAL INVESTMENT

11 CH

DEFENCE ANNUAL REPORT 2014‐15 175

Defence asset management

Defence manages $78.4 billion of total assets. This includes:

• approximately $42.7 billion of specialist military equipment

• $25.0 billion of plant, land, buildings and infrastructure

• $6.5 billion of inventory

• $1.0 billion of heritage and cultural assets

• $3.2 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.

The Chief Finance Officer Group undertakes accounting processes to enable the accurate and timely reporting of asset balances and ensure that they are consistent with requirements for financial statement reporting defined in the Australian Accounting Standards.

During 2014‐15, Defence worked to secure and advance the improvements in financial and asset management achieved in previous years. This was achieved by:

• evolving the shared service delivery model for asset accounting to further enhance financial reporting of assets and deliver standardised policies and processes to support the management of assets

• using a maturing data assurance framework and controls environment to swiftly identify and resolve asset management issues as they occur.

Defence Materiel Organisation asset management The DMO manages its assets in accordance with relevant Accountable Authority Instructions, accounting standards and internal DMO guidelines.

The DMO’s property, plant and equipment assets, which were valued at $5 million at 30 June 2015, are subject to an annual stocktake to ensure that records are accurate. Impairment reviews were also undertaken during the year. Valuations are conducted as outlined in note 1.19 of the DMO financial statements in Volume Two of this report.

Defence procurement Defence undertakes procurement in accordance with the core purchasing policies and principles as articulated in the 2014 Commonwealth Procurement Rules (CPRs) and Defence policies.

Under non-materiel shared procurement services, high-level procurement advice and support is provided to staff who exercise delegations under the Public Governance, Performance and Accountability Act 2013 to ensure compliance with the CPRs.

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.

176 DEFENCE ANNUAL REPORT 2014‐15

Defence was a major member of the Department of the Prime Minister and Cabinet’s cross-agency working group for Indigenous engagement and is also developing Defence’s strategy in response to the new Commonwealth Government Indigenous Procurement Policy. The policy, which applies to all Australian government agencies, has two key objectives:

• to stimulate Indigenous entrepreneurship and business development

• to stimulate Indigenous employment.

Procurement initiatives to support small business

Defence supports small business participation in the Commonwealth Government procurement market. Small and medium enterprise (SME) and small enterprise participation statistics are available on the Department of Finance’s website.

Defence also recognises the importance of ensuring that small businesses are paid on time. The results of the survey of Australian Government payments to small business are available on the Treasury’s website.

Low-risk procurements valued under $200,000

The Defence Procurement Policy Manual and the Contract Template Selection and Tailoring Guide incorporate and encourage procurement officers to use the Commonwealth Contracting Suite for those procurements determined suitable under the Department of Finance Defence-specific decision tree.

The Chief Finance Officer Group provides finance shared services to Defence, including centralised payment of accounts. In addition, Defence promotes the use of credit cards to facilitate prompt payment.

Australian industry participation

Under Defence’s Australian industry participation policy, Defence requires prime contractors for materiel systems to provide Australian industry with opportunities to compete on merit in major procurements, and requires contractual commitments from suppliers to provide nominated domestic industry through an agreed plan. Under the policy, prime contractors are required to release a public version of the plan to provide industry with enhanced visibility and transparency of local industry commitments and business opportunities in relation to specific Defence procurements.

Small business engagement principles

Defence is committed to and has established a range of initiatives designed to promote industry engagement (particularly for SMEs) and reduced costs of tendering making Defence business opportunities more transparent and accessible.

• During the reporting period, SMEs were able to access strategic insights and tailored information on opportunities in the national Defence market through the Defence Business Access Office network. Through tailored guidance, visits and briefings, the Business Access Office aids companies’ understanding of Defence’s capabilities, requirements and procurement processes. In addition, the revised approach (including discounted registration fees) to the Defence + Industry conference (held 29‐30 July 2014 in Adelaide) made this keystone event more affordable and accessible to the broader Australian defence industry, particularly for SMEs. The conference provided an opportunity to hear from government and Defence leaders and to connect with other businesses in Defence and related sectors of industry.

• In measures designed to improve the quality and integrity of AusTender data, AusTender provides industry with a single, easy-to-use information portal to new business opportunities with Defence. AusTender also provides companies with ready access to tender documentation and provides a cost-effective and simple electronic tender lodgment process that reduces the time and cost burden on companies when submitting tenders.

ASSET MANAGEMENT, PROCUREMENT AND CAPITAL INVESTMENT

11 CH

DEFENCE ANNUAL REPORT 2014‐15 177

Electronic systems and other processes used to facilitate on-time payment performance

Defence has implemented a mandatory procurement policy on the use of the Defence Purchasing Card as the method of payment for purchases of less than $10,000 and for certain procurements categorised as low value and low risk over $10,000. To ensure compliance with the Department of Finance Resource Management Guide 417—Supplier Pay on Time or Pay Interest Policy, Defence contracting templates include provisions that require the Commonwealth to make a self-generated interest payment for any late payment (and without the need for any further invoice) for all contracts valued up to $1 million (GST inclusive).

Defence Materiel Organisation procurement The Contracting and Legal Division, Commercial Group, DMO is responsible for providing strategic commercial law advice and contracting services directly to the DMO project and system project offices, and for maintaining and improving Defence’s procurement policy, guidance tools and Defence’s suite of contracting templates—known as the ASDEFCON templates. The Division also has responsibility for whole-of-Defence procurement training and the professionalisation of the Defence Procurement and Contracting (P&C) Job Family.

Key achievements in 2014‐15 included:

• Launch of the Defence P&C Job Family Professionalisation programme, which represents a significant commitment by Defence to provide the P&C Job Family workforce with career development and skilling opportunities consistent with the 70:20:10 learning framework, which comprises 70 per cent on-the-job experience; 20 per cent supervision, coaching and mentoring; and 10 per cent formal education and training. The programme is the result of extensive research and the considered application of global best practice to Defence’s unique and challenging procurement and contracting environment.

• Significant progress on a range of major commercial reform initiatives aimed at improving the efficiency and effectiveness of Defence’s tendering practices and contracting outcomes. This work included significant updates to the ASDEFCON templates, including changes that reduce information demands on tenderers responding to major procurements, and the release of Defence’s third-generation performance-based contracting template—ASDEFCON Support (version 3)—in response to extensive internal and industry feedback.

• Establishment of the Evaluation and Negotiation Centre of Excellence for the purpose of enhancing Defence’s capability in activities relevant to the critical evaluation and negotiation phases of a procurement. In 2014 the centre established a standing offer panel that provides project teams with access to a broad range of specialist providers capable of leading, supporting or preparing Defence for complex contract negotiations.

Approved Major Capital Investment Programme The Approved Major Capital Investment Programme generally comprises those projects that cost more than $20 million and which, following approval, have been transferred from the Defence Capability Plan to acquisition areas 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.

178 DEFENCE ANNUAL REPORT 2014‐15

Projects costing between $20 million and $100 million are jointly approved 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.

2014‐15 achievements In 2014‐15, a total of 35 submissions with a combined value of more than $7 billion were approved. Significant approvals included:

• AIR 7403 Phase 3—Additional multi-role tanker transport aircraft • AIR 8000 Phase 4—Additional C-17A Globemaster III heavy lift aircraft • JP 9000 Phase 7—Helicopter aircrew training system • LAND 2072 Phase 2B.2—Acquisition of an integrated battlefield telecommunications network and the

upgrade of current radios and facilities • SEA 1448 Phase 4B—Anzac air search radar.

Capital Facilities Programme The Capital Facilities Programme comprises approved and unapproved major and medium projects.

Major capital facilities projects are defined as having expenditure of more than $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 of between $500,000 and $15 million (including GST). Projects of 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 Programme develops facilities and infrastructure to support the Approved Major Capital Investment Programme, 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 programme 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 announced by government, 2014‐15 • Approved capital facilities projects, by state and federal electorate • Performance of capital facilities projects, 2014‐15 • Status of programme of works foreshadowed for consideration and approval in 2014‐15 • Single Living Environment and Accommodation Precinct projects, by state and federal electorates • Major Defence establishments and bases.

ASSET MANAGEMENT, PROCUREMENT AND CAPITAL INVESTMENT

11 CH

DEFENCE ANNUAL REPORT 2014‐15 179

PROFILE: Kathryn Toohey

Championing future Defence capability Brigadier Kathryn Toohey began her Army career in 1987 when she was chosen to be in one of the first intakes of the Australian Defence Force Academy. She joined the Signals Corps and served in several communications and electronic warfare units. An early career highlight was serving as a Troop Commander on an operational deployment with the United Nations Transitional Authority in Cambodia. She has also served as an instructor at the Royal Military College, as aide-de-camp to the Governor-General and as Director of Defence’s Capability and Technology Management College.

Kathryn has enjoyed the diverse challenges in each of her postings, but says she feels especially privileged to be a Director General in the Capability Development Group. In charge of the Integrated Capability Development Branch, she leads an experienced team of people who are analysing and proposing to government the best options for Australia’s future defence capability. In particular, Kathryn’s team develops options for systems that will be used across all Services and Groups in Defence, such as those providing communications, simulation and operational information.

In addition to championing specific systems, Kathryn also oversees a specialised directorate responsible for guiding and evaluating integration between other projects and systems already in service.

‘Defence employs very complex and sophisticated systems in diverse circumstances, and often in conjunction with our allies. The best way we can ensure all these capabilities work together is to consider integration as early as possible in the process, at the point of project initiation and design’, Kathryn said.

In addition to normalising integration for all projects and driving an attitude of continuous improvement, Kathryn wants her branch to be a workplace of choice.

‘Fortunately, most people really want to be here anyway’, she said.

‘We have a diverse mix of military, public servants and contractors, all with considerable expertise and dedication. They know that the business cases they present to government have the potential to deliver capability that will remain in service and save Australian lives, long after they have retired from their own careers. It is complex work, but very rewarding.’

Kathryn admits to being highly committed to her work, so she is very grateful for the balance provided by her family—she has a husband and three school-age children. She is also a keen runner, basketball player and traveller.

CHAPTER TWELVE

12 Environmental performance

ENVIRONMENTAL PERFORMANCE

12 CH

DEFENCE ANNUAL REPORT 2014‐15 181

Defence environmental performance

Sound environmental policies and processes, particularly Defence environmental impact assessments, underpin the sustainable development of the Defence estate and conduct of all Defence activities, and are in accordance with the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

The environmental policies, procedures and support tools published on the Defence Estate Quality Management System, which meets the AS/NZS 9001:2008 international quality management standard, govern the environmental management of the Defence estate.

Measures taken to minimise the impact of activities on the environment Defence assessed and managed environmental risks and potential impacts through its ongoing programme of environmental impact assessments. Defence managed its low-risk activities using existing standard operating procedures and plans, and assessed and managed medium-level environmental risks using the Defence Environmental Clearance Certificate process and other mitigation strategies. For higher-risk activities that had a potential significant adverse impact on the environment, Defence completed comprehensive assessments, and referred these for further assessment and approval by the Commonwealth Minister for the Environment.

Referrals

The EPBC Act requires agencies to refer any action likely to have a significant impact on the environment. Defence referred one action for formal consideration under the EPBC Act, as shown in Table 12.1. Defence had two actions subject to ongoing assessment under the EPBC Act during 2014‐15, as shown in Table 12.2.

Table 12.1: Defence actions referred under the EPBC Act, 2014‐15

Defence action

EPBC referral number Date referred Status

Removal of heritage buildings from RAAF Williamtown, NSW 2014/7324 9 September 2014 Under assessment

Table 12.2: Defence actions subject to continuing assessment under the EPBC Act, 2014‐15

Defence action

EPBC referral number Status

Flying operations of the F-35 Joint Strike Fighter at RAAF Williamtown and Tindal and the Salt Ash Air Weapons Range 2010/5747 Under assessment

Removal of heritage buildings at RAAF Amberley, Ipswich, Qld 2014/7123 Approved, subject to conditions, on 9 June 2015

182 DEFENCE ANNUAL REPORT 2014‐15

Environmental improvement initiatives and reviews

Defence continued to meet environmental due diligence requirements at operational military bases in the Middle East region during 2014‐15. Defence participated in a combined Australia and United States Environmental Monitoring Group for the planning of Exercise Talisman Sabre 2015, to provide environmental advice and assistance to participants on the ground during the exercise.

During 2014‐15, Defence continued to develop and implement environmental initiatives and reviews in the following:

• ecologically sustainable development

• 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

• national environment protection measures

• ozone-depleting substances and synthetic gases

• Defence Environment and Heritage Panel.

DMO environmental performance Achievements in the DMO’s environmental management included the following:

• The DMO Environmental Management System was reviewed in 2014. The review identified gaps in the integration of environmental management processes between Defence Groups and Services and those internal to the DMO throughout the capability systems lifecycle. There were also concerns regarding compliance with applicable environmental legislation.

• A project management plan for the implementation of the DMO Environmental Management System was developed to capture all the work that will be involved.

• The DMO is assisting 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. The DMO advised the defence industry that the Government is in the process of ratification through a communiqué released by the CEO on 25 February 2015.

CONSULTANCIES AND CONTRACTS

A APP

DEFENCE ANNUAL REPORT 2014‐15 183

Appendix A: 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 2014‐15, Defence (including the Defence Materiel Organisation) entered into 465 new consultancy contracts (395 with a value greater than $10,000) involving total actual expenditure of $61 million (including GST). In addition, 206 consultancy contracts remained active, involving total actual expenditure of $20.6 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 A.1 records total expenditure for consulting contracts rather than the full value of the contract.

Table A.1: Total expenditure on consulting contracts, 2012‐13 to 2014‐15

2012‐13 $m

2013‐14 $m

2014‐15 $m

Defence 37.8 38.3 71.3

DMO 2.9 5.6 10.3

Table A.2 shows a summary sorted by Defence Group of consultancies let in 2014‐15 with a contract value greater than $10,000 (including GST).

Table A.2: Consultancies let greater than $10,000, by Group, 2014‐15

Group Number of contracts let Total contract value ($)

Office of the Secretary and CDF 0 0

Vice Chief of the Defence Force Group 14 1,807,976

Joint Operations Command 3 928,354

Navy 0 0

Army 3 275,298

Air Force 4 443,503

Capability Development Group 0 0

Chief Finance Officer Group 12 22,851,300

Chief Information Officer Group 17 3,368,718

Defence Science and Technology Organisation 5 387,552

Defence Support and Reform Group 272 33,364,814

Intelligence and Security Group 18 1,090,824

Defence People Group 14 1,458,476

Defence Materiel Organisation 33 24,849,875

Total 395 90,826,690

184 DEFENCE ANNUAL REPORT 2014‐15

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 are exempt from the requirement to provide Auditor-General access.

Table A.3: Contracts that do not include the ANAO access clause, 2014‐15

Group and company ($) Purpose

Navy

DMS Maritime Pty Ltd 87,000,000 Acquisition of multi-role aviation training vessel

Total for the Navy 87,000,000

Army

BAE Systems National Security Solution 400,406 Information technology acquisition

Indigenous Essential Services Pty Ltd 118,146 Electrical work

National Test Pilot School Inc 569,865 Specialist training

National Test Pilot School Inc 1,054,250 Specialist training

Boeing Information Space & Defense Services 460,167 Specialist training

Total for the Army 2,602,834

Intelligence and Security Group

Day Hodge Associates Pty Ltd 19,698 AGSVA communication and customer satisfaction

research

Total for Intelligence and Security Group 19,698

Chief Information Officer Group

Optus Networks Pty Ltd 1,713,357 Blue Force Tracker Off-Platform services

Total for Information Officer Group 1,713,357

Defence Materiel Organisation

Foreign Military Sale 103,851 Light weapons and ammunition

Foreign Military Sale 112,457 Explosive ordnance

Foreign Military Sale 145,307 Engineering training

Foreign Military Sale 169,725 Explosive ordnance

Foreign Military Sale 242,985 Explosive ordnance

Foreign Military Sale 350,541 Pharmaceuticals

Foreign Military Sale 402,024 Spare parts for 60 mm mortar capability

Foreign Military Sale 479,879 Explosive ordnance

Foreign Military Sale 497,220 Patrol HF radios

Foreign Military Sale 586,280 Light weapons and ammunition

Foreign Military Sale 604,327 Supply liaison office administration support

Foreign Military Sale 653,680 Equipment and support

Foreign Military Sale 678,478 Explosive ordnance

Foreign Military Sale 761,817 Aircraft spare and repair parts

CONSULTANCIES AND CONTRACTS

A APP

DEFENCE ANNUAL REPORT 2014‐15 185

Group and company ($) Purpose

Foreign Military Sale 1,084,697 Aircraft spare and repair parts

Foreign Military Sale 1,116,866 Software support

Foreign Military Sale 1,129,450 Explosive ordnance

Foreign Military Sale 1,283,040 Equipment and support

Foreign Military Sale 1,297,236 Explosive ordnance

Foreign Military Sale 1,422,831 Software support

Foreign Military Sale 1,967,137 Aircraft equipment and services

Foreign Military Sale 2,257,239 Light weapons and ammunition

Foreign Military Sale 2,401,646 Light weapons and ammunition

Foreign Military Sale 3,703,959 Military equipment

Foreign Military Sale 3,862,886 Aircraft equipment

Foreign Military Sale 4,345,494 Management advisory services

Foreign Military Sale 5,411,344 System follow-on engineering and support services

Foreign Military Sale 5,723,450 Aeronautical products

Foreign Military Sale 5,883,120 Equipment and support

Foreign Military Sale 7,038,874 Support acquisition for Triton

Foreign Military Sale 8,429,128 Electronic equipment

Foreign Military Sale 11,226,276 Technical refresh—war vehicles

Foreign Military Sale 13,531,176 Equipment and support

Foreign Military Sale 18,657,814 Explosive ordnance

Foreign Military Sale 19,909,766 Secure communication equipment

Foreign Military Sale 21,768,078 Aircraft components and equipment

Foreign Military Sale 24,354,117 Explosive ordnance

Foreign Military Sale 26,242,295 Acquisition of missiles

Foreign Military Sale 49,165,176 Aircraft maintenance and repair services

Foreign Military Sale 55,029,101 Services, specialist personnel, tooling and parts

Foreign Military Sale 59,431,757 Acquisition of AIM 9X-2 Sidewinder

Foreign Military Sale 103,366,053 Mobile training system

Foreign Military Sale 752,596,622 Acquisition of aircraft

Total for Defence Materiel Organisation 1,219,425,202

Contracts exempt from AusTender

In 2014‐15, Defence (excluding the DMO) reported a total of 248 contracts, standing offers or variations thereto, with a total value of $616.1 million which were subject to an exemption under the Freedom of Information Act 1982.

Table A.3 (continued)

186 DEFENCE ANNUAL REPORT 2014‐15

Advertising and market research Defence conducted recruitment, campaign and other advertising in 2014‐15 as detailed in Table A.6. 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.

Total expenditure relating to advertising and market research paid by, or on behalf of, Defence during 2014‐15.

Table A.4: Total advertising and market research expenditure by type of agency, 2012‐13 to 2014‐15

Type

2012‐13 ($)

2013‐14 ($)

2014‐15 ($)

Advertising 11,229,656 11,358,414 16,278,341

Market research 1,260,844 2,391,525 2,282,994

Polling ‐ ‐ ‐

Direct mail 11,754 22,633 ‐

Media advertising 21,907,228 51,542,841 43,386,073

Total 34,409,482 65,315,413[1] 61,947,408

Note

1. The figure of $61.578 million in the Defence Annual Report 2013‐14 was incorrect. It should have been $65.315 million GST inclusive. The error emerged as the total was not GST inclusive and resulted in a miscalculation of totals.

Table A.5: Total advertising and market research expenditure by Group, 2012‐13 to 2014‐15

Group

2012‐13 ($)

2013‐14 ($)

2014‐15 ($)

Office of the Secretary and Chief of the Defence Force 40,334 33,443 88,102

Navy 81,836 738,163 48,738

Army 40,969 70,044 44,337

Air Force 147,617 265,158 154,324

Intelligence and Security Group 92,640 39,185 31,716

Chief Operating Officer ‐ 108,806 8,480

Defence Support and Reform Group 458,333 128,467 235,201

Chief Information Officer Group 315,766 323,995 25,671

Defence People Group 32,933,303 63,343,289 60,967,930

Defence Science and Technology Organisation 25,985 23,068 14,927

Vice Chief of the Defence Force Group 25,985 204,036 131,414

Joint Operations Command ‐ ‐ ‐

Capability Development Group ‐ ‐ ‐

Chief Finance Officer Group 728 ‐ ‐

Defence Materiel Organisation 44,024 37,759 196,569

Total 34,207,520 65,315,413 61,947,408

CONSULTANCIES AND CONTRACTS

A APP

DEFENCE ANNUAL REPORT 2014‐15 187

Details of the persons or organisations paid are provided only for payments of more than $12,565 (including GST).

Table A.6: Total advertising and market expenditure by Group, type and company, 2014‐15

Group, type and company ($) Purpose

Office of the Secretary and CDF

Market research

Australian National University 38,500 Production of a report on extant opinion poll data on

Australian attitudes to defence and security issues

Media advertising

Mitchell and Partners Australia 18,218 Advertising for public submissions to the White Paper

Mitchell and Partners Australia 22,867 Advertising public submission process

Navy

Advertising

Spatchurst Design Associates 11,649 Advertising on panels—Naval Heritage Collection

Media advertising

Spatchurst Design Associates 2,517 Brochure design for museums

Army

Media advertising

APN News & Media Limted 28,419 To inform the community about military activities

Air Force

Advertising

Star News Mayalsia 20,451 Recruitment advertising

Star News Mayalsia 517 Vehicle disposal

Media advertising

Last Minute Media 46,509 Royal Australian Air Force Museum advertising

Intelligence and Security Group

Market research

Day Hodge Associates Pty Ltd 19,698 AGSVA communication and customer satisfaction research

Defence Support and Reform Group

Advertising

Mitchell Adcorp Alliance Pty Ltd 33,457 Newspaper advertising for NACC

Countrywide Australia Pty Ltd 69,212 Child Safety Handbook—UXO message

Mitchell Adcorp Alliance Pty Ltd 11,978 Public notices legal

Mitchell Adcorp Alliance Pty Ltd 83,028 Public notices (NSW, ACT, Tas.)

Defence People Group

Advertising

Havas Worldwide Australia Pty Ltd 14,191,879 ADF recruitment advertising

Mitchell Adcorp Alliance Pty Ltd 35,705 Online advertising and targetted e-mails for marketing of Defence civilian graduate programmes

188 DEFENCE ANNUAL REPORT 2014‐15

Group, type and company ($) Purpose

Market research

GFK Australia Pty Ltd 63,470 Qualitative and quantitative research to maximise

ADF recruitment targets

Hall and Partners Open Mind 1,749,336 Qualitative and quantitative research to maximise ADF recruitment targets

Horizon Research 291,774 Qualitative and quantitative research to maximise

ADF recruitment targets

Media advertising

Universal McCann Australia 29,113 Planning and placement of campaign advertising,

including dissemination and other fees

Adcorp Australia 83,243 Planning and placement of non-campaign advertising

Mitchell and Partners 39,855,612 Planning and placement of campaign advertising

including dissemination and other fees

Defence Science and Technology Organisation

Advertising

Mitchell and Partners Australia Pty Ltd 14,927 Advertising the Capability and Technology Demonstrator Programme

Vice Chief of the Defence Force Group

Advertising

Mitchell Adcorp Alliance Pty Ltd 13,651 Non-campaign advertising, including dissemination and other fees

Market research

Newspoll 114,285 Employer research to measure the level of awareness

among employers of Reserves and Reserve Service

Defence Materiel Organisation

Advertising

YAFFA 27,253 Promote conferences and courses

Media advertising

Adcorp Australia Pty Ltd 161,097 Promote conferences and courses

Table A.6 (continued)

CONSULTANCIES AND CONTRACTS

A APP

DEFENCE ANNUAL REPORT 2014‐15 189

Legal expenses

Defence

Expenditure on internal and external legal services in 2014‐15 is shown in tables A.7 to A.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.

Table A.7: Estimated expenditure on internal and external legal services, 2013‐14 and 2014‐15

Type of legal expenditure

2013‐14

(GST inclusive) $m

2014‐15

(GST inclusive) $m

2014‐15

(GST exclusive)[1] $m

Internal 41.8 42.3 42.0

External 21.3 23.6 21.5

Total 63.1 65.9 63.5

Note

1. As opposed to previous years, legal compliance reporting to the Attorney-General’s Department is now done on a GST exclusive basis.

Table A.8: Estimated cost breakdown of internal legal expenses, 2013‐14 and 2014‐15

Items

2013‐14

(GST inclusive) $m

2014‐15

(GST inclusive) $m

2014‐15

(GST exclusive) $m

Salaries for military lawyers 18.5 19.2 19.2

Salaries for civilian staff 13.3 12.8 12.8

ADF Reserve legal officers 6.8 6.3 6.3

Operating costs of the division 2.9 3.6 3.3

Military justice disbursements 0.3 0.4 0.4

Total 41.8 42.3 42.0

Table A.9: Estimated cost breakdown of external legal expenses, 2013‐14 and 2014‐15

Items

2013‐14

(GST inclusive) $m

2014‐15

(GST inclusive) $m

2014‐15

(GST exclusive) $m

Professional fees—Defence legal panel 19.7 19.6 17.8

Disbursements 1.6 2.8 2.6

Legal assistance at Commonwealth expense ‐ 1.2 1.1

Total 21.3 23.6 21.5

190 DEFENCE ANNUAL REPORT 2014‐15

Defence Materiel Organisation

DMO expenditure on internal and external legal services is shown in tables A.10 to A.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 A.10: Estimated expenditure on internal and external legal services, 2013‐14 and 2014‐15

Type of legal expenditure

2013‐14 $m

2014‐15 $m

Internal 3.1 2.99

External 11.0 12.16

Total 14.1 15.15

Table A.11: Estimated cost breakdown of internal legal expenses, 2013‐14 and 2014‐15

Items

2013‐14 $m

2014‐15 $m

Salaried legal staff costs 3.0 2.95

Operating costs attributable to legal services 0.2 0.04

Total 3.2 2.99

Table A.12: Expenditure on external legal services, 2013‐14 and 2014‐15

Items

2013‐14 $m

2014‐15 $m

Professional fees—Defence legal panel 11.0 11.87

Professional fees—Attorney-General’s Department ‐ 0.00

Legal expenditure—other ‐ 0.29

Total 11.0 12.16

B

APP

GRANTS AND PAYMENTS

DEFENCE ANNUAL REPORT 2014‐15 191

Appendix B: Grants and payments

List and description of grants

Defence

Table B.1: Approved grants, 2013‐14 and 2014‐15

2013‐14 actual $’000[1]

2014‐15 actual $’000[1]

Grants programme

Army History Research Grants Scheme 52 64

Family Support Funding Programme 1,304 1,443

Other grants

Afghan National Army Trust Fund Contribution 42,808 104,398

Australia‐Canada Security Cooperation Project 18 ‐

Australian Member Committee of the Council for Security Cooperation in the Asia‐Pacific multi-year grant) 55 59

Australian National University—Shedden Professor of Strategic Policy Studies position (multi-year grant) 238 270

Australian Strategic Policy Institute (multi-year grant) 3,196 3,276

Australian Strategic Policy Institute—Africa Dialogue, July 2013 18 ‐

Fisher House Foundation (multi-year grant) 25 25

International Institute for Strategic Studies 89 ‐

Kokoda Foundation 160 ‐

Multinational Force and Observers (multi-year grant) 558 626

Professor Peter Stanley of the University of New South Wales—Indians and ANZACs on Gallipoli project 18 ‐

Royal United Services Institute of Australia 97 ‐

Strategic and Defence Centre Post Doctoral Fellowship (multi-year grant) 64 143

Sir Richard Williams Foundation 50 50

United Nations—Peace Operations Training Institute e-Learning for African Peace Keepers 43 51

Yakannarra Community School 3 ‐

Australian Strategic Policy Institute—North East Asia Defence and Security 1.5 Track Forum ‐ 136

Australian War Memorial—Official History of Peacekeeping, Humanitarian and Post-Cold War Operations ‐ 800

Australian War Memorial—Anzac Centenary Travelling Exhibition ‐ 2,727

Defence Science and Technology Organisation Industry Placement Programme 2015 ‐ 142

United Nations—Department of Peacekeeping Operations review of technologies ‐ 102

United Nations research projects ‐ 239

GRANTS AND PAYMENTS

192 DEFENCE ANNUAL REPORT 2014‐15

2013‐14 actual $’000[1]

2014‐15 actual $’000[1]

Kokoda Foundation—Australia ‐ United States Trilogy Dialogue ‐ 130

Kokoda Foundation—Young Leaders Strategic Programme ‐ 30

Army and Air Force Canteen Service ‐ 400

The Australian Sailor Pty Ltd ‐ 150

Royal Melbourne Institute of Technology—PhD study ‐ 64

University of Melbourne—PhD study ‐ 38

Total grants paid 48,796[2] 115,363

Notes

1. Figures are GST exclusive.

2. 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 2014 to 30 June 2015 is available online for the Skilling Australia’s Defence Industry Programme, the Industry Skilling Enhancement package, the Priority Industry Capability Innovation Programme and the New Air Combat Capability—Industry Support Programme. In 2014‐15 more than 140 grants were awarded at a total value of around $14.3 million (GST inclusive).

Table B.2: DMO grants paid, 2013‐14 and 2014‐15

2013‐14 actual $’000

2014‐15 actual $’000

Skilling Australia’s Defence Industry 7,348 3,441

Priority Industry Capability Innovation Programme 3,545 2,083

Industry Skilling Enhancement 1,478 237

New Air Combat Capability—Industry Support Programme 629 1,169

Total 13,000 6,930

B

APP

GRANTS AND PAYMENTS

DEFENCE ANNUAL REPORT 2014‐15 193

Payment of accounts In 2014‐15, Defence paid 1,997,627 or 99.2 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 79 per cent (2013‐14, 80 per cent) of all payments, which continues to have a positive effect on the paid-by-due-date result.

Table B.3: Accounts paid by due date, 2012‐13 to 2014‐15

2012‐13 2013‐14 2014‐15

Number of accounts paid 1,694,617 1,748,114 2,013,583

Accounts paid by due date 1,675,847 1,736,673 1,997,627

Percentage of accounts paid by due date 98.9 99.4 99.2

Tactical payment scheme The tactical payment scheme was legislated on 1 July 2009, under sections 123H and J of the Defence Act. 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 is critical for maintaining local community support and thereby ensuring the safety of deployed forces.

In 2014‐15, six individual payments totalling $1,930 were made under the scheme. All six payments were a consequence of minor damage to property from motor vehicles. Further information is outlined in Note 31 in the Defence financial statements in Volume Two of this report.

194 DEFENCE ANNUAL REPORT 2014‐15

Appendix C: Corrections

2013‐14 Annual Report

Page 158, paragraph 1 (Parliamentary business)

Defence provided eight written submissions.

Defence witnesses appeared at 12 public hearings.

Page 158, Table 10.1 (Defence’s parliamentary contribution, 2011‐12 to 2013‐14)

Written submissions for 2013‐14 amended to 8.

Public hearings for 2013‐14 amended to 12.

Private briefings for 2012‐13 amended to 4.

Total for 2013‐14 amended to 54.

Page 158 and 159 Table 10.2 (Defence’s involvement with joint committees, 2013‐14)

The following inquiries did not have Defence involvement in the reporting period:

SEA 4000 Air Warfare Destroyer Inquiry into Australia’s Relationship with Timor-Leste Inquiry into the Review of the Defence Annual Report 2011‐12 Inquiry into Government Support for Australian Defence Industry Exports Report 443—Review of Auditor-General’s Report Numbers 23 and 25 (2012‐13) and 32 (2012‐13) to 9 (2013‐14).

Page 158, Table 10.2 (Defence’s involvement with joint committees, 2013‐14)

Defence involvement with joint committees omitted in error:

Inquiry into the Development of Northern Australia Report 436—Review of the 2011‐12 Major Projects Report Auditor-General’s Report No. 6—Capability Development Reform Auditor-General’s Report No. 25—Defence’s Implementation of Audit Recommendations.

Page 159, Table 10.3 (Defence’s involvement with Senate committees, 2013‐14)

Defence involvement with Senate committees omitted in error:

Public Interest Immunity Inquiry.

2011‐12 Annual Report Page 328, paragraph 2 (The tactical payments scheme)

In 2011‐12, 1,041 individual payments totalling $44,733 were made under the tactical payments scheme.

D

APP

LIST OF REQUIREMENTS

DEFENCE ANNUAL REPORT 2014‐15 195

Appendix D: List of requirements Part of report Description Requirement Page

Letter of transmittal Mandatory iii

Table of contents Mandatory iv‐v

Index Mandatory 199

Glossary [acronyms and abbreviations] Mandatory 198

Contact officer(s) Mandatory 208

Internet home page address and internet address for report Mandatory 208

Defence overview

Review by Secretary

Review by departmental secretary Mandatory 1‐3

Summary of significant issues and developments Suggested 1‐5

Overview of department’s performance and financial results Suggested 12‐14

Outlook for following year Suggested 1‐5, 11

Significant issues and developments—portfolio Portfolio departments— suggested

1‐5

Departmental overview

Role and functions Mandatory 7

Organisational structure Mandatory 8‐9

Outcome and programme structure Mandatory inside front

cover

Where outcome and programme structure differs from Portfolio Budget Statements, Portfolio Additional Estimates Statements or other portfolio statements accompanying any other additional appropriation bills, details of variation and reasons for change

Mandatory N/A

Portfolio structure Portfolio

departments— mandatory

8

Performance

Review of performance during the year in relation to programmes and contribution to outcomes Mandatory 23‐114

Actual performance in relation to deliverables and key performance indicators set out in Portfolio Budget Statements, Portfolio Additional Estimates Statements or other portfolio statements

Mandatory 23‐114

Where performance targets differ from the Portfolio Budget Statements, Portfolio Additional Estimates Statements, details of both former and new targets, and reasons for the change

Mandatory N/A

Narrative discussion and analysis of performance Mandatory 23‐114

Trend information Mandatory 23‐114

Significant changes in nature of principal functions/services Suggested N/A

Performance of purchaser/provider arrangements If applicable, suggested 175‐177

196 DEFENCE ANNUAL REPORT 2014‐15

Part of report Description Requirement Page

Factors, events or trends influencing departmental performance Suggested 23‐114

Contribution of risk management in achieving objectives Suggested 23‐114

Performance against service charter customer service standards, complaints data, and the department’s response to complaints

If applicable, mandatory

163‐164

Discussion and analysis of the department’s financial performance Mandatory 12, 23‐114

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 12, 23‐114

Agency resource statement and summary resource tables by outcomes Mandatory 12‐14, 24‐26,

77‐79, 87, 93‐94

Management and accountability

Corporate governance

Agency heads are required to certify their agency’s actions in dealing with fraud Mandatory iii

Statement of the main corporate governance practices in place Mandatory 113‐114,

160‐161

Names of the senior executive and their responsibilities Suggested 23‐114

Senior management committees and their roles Suggested 113‐114,

160‐161

Corporate and operational plans and associated performance reporting and review Suggested 11, 27,

121‐122

Internal audit arrangements including approach adopted to identifying areas of significant financial or operational risk and arrangements to manage those risks

Suggested 160, 162

Policy and practices on the establishment and maintenance of appropriate ethical standards Suggested 161‐162

How nature and amount of remuneration for SES officers is determined Suggested 52, 133‐136

External scrutiny

Significant developments in external scrutiny Mandatory 167‐172

Judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner Mandatory 170‐171

Reports by the Auditor-General, a parliamentary committee, the Commonwealth Ombudsman or an agency capability review

Mandatory 171‐172

Management of human resources

Assessment of effectiveness in managing and developing human resources to achieve departmental objectives Mandatory 137

Workforce planning, staff retention and turnover Suggested 128‐132

Impact and features of enterprise or collective agreements, individual flexibility arrangements, determinations, common law contracts and Australian workplace agreements

Suggested 134‐135, 150

Training and development undertaken and its impact Suggested 137

Work health and safety performance Suggested 139‐142

D

APP

LIST OF REQUIREMENTS

DEFENCE ANNUAL REPORT 2014‐15 197

Part of report Description Requirement Page

Productivity gains Suggested 136

Statistics on staffing Mandatory 15‐16

Statistics on employees who identify as Indigenous Mandatory 153‐154

Enterprise or collective agreements, individual flexibility arrangements, determinations, common law contracts and Australian workplace agreements

Mandatory 134‐135

Performance pay Mandatory 136

Assets management

Assessment of effectiveness of assets management If applicable, mandatory 175

Purchasing Assessment of purchasing against core policies and principles Mandatory 175‐177

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 183, 189‐190

Australian National Audit Office Access Clauses

Absence of provisions in contracts allowing access by the Auditor-General Mandatory 184‐185

Exempt contracts Contracts exempted from publication in AusTender Mandatory 177

Small business Procurement initiatives to support small business Mandatory 176‐177

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 139‐142

Advertising and market research (section 311A of the Commonwealth Electoral Act 1918) and statement on advertising campaigns

Mandatory 186‐188

Ecologically sustainable development and environmental performance (section 516A of the Environment Protection and Biodiversity Conservation Act 1999)

Mandatory 181‐182

Compliance with the agency’s obligations under the Carer Recognition Act 2010 If applicable, mandatory

N/A

Grant programmes Mandatory 191‐192

Disability reporting—explicit and transparent reference to agency-level information available through other reporting mechanisms

Mandatory 155‐156

Information Publication Scheme statement Mandatory 172

Correction of material errors in previous annual report If applicable, mandatory 194

Agency resource statements and resources for outcomes Mandatory 12‐14, 24‐26, 77‐79, 87, 93‐94

List of requirements Mandatory 195‐197

198 DEFENCE ANNUAL REPORT 2014‐15

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

AGSVA Australian Government Security Vetting Agency

ANAO Australian National Audit Office

ANDSF Afghan National Defense and Security Forces

APS Australian Public Service

ASD Australian Signals Directorate

CDF Chief of the Defence Force

CEO Chief Executive Officer

DMO Defence Materiel Organisation

DSTO Defence Science and Technology Organisation

FOI freedom of information

FTE full-time equivalent

GST goods and services tax

HMAS Her Majesty’s Australian Ship

ICT information and communication technology

IGADF Inspector-General of the Australian Defence Force

LGBTI lesbian, gay, bisexual, transgender and intersex

LHD landing helicopter dock

MRH multi-role helicopter

NAIDOC National Aborigines and Islanders Day Observance Committee

NATO North Atlantic Treaty Organization

PGPA Act Public Governance, Performance and Accountability Act 2013

RAAF Royal Australian Air Force

RAN Royal Australian Navy

SeMPRO Sexual Misconduct Prevention and Response Office

SES Senior Executive Service

VCDF Vice Chief of the Defence Force

WHS work health and safety

DEFENCE ANNUAL REPORT 2014‐15 199

Index A Aboriginal and Torres Strait Islander people, 56, 153‐4 Accountable Authority Instructions, 175 ADF Cover, 46, 134 ADF Super, 52, 134 Administrative Appeals (Judicial Review) Act 1977, 171 Administrative Appeals Tribunal (AAT), 170, 172 advertising expenditure, 186‐7 Afghan National Army, 74

Officer Academy, 4, 82 Afghan National Defense and Security Forces, 4, 10, 57, 74, 112 Afghan Special Forces, 82 Afghanistan

ADF’s role, 4 death, inquiry, 164 Operation Highroad, 82, 83 Operation Slipper, 74 technology, 10, 57 Train-Advise-Assist mission of Resolute Support, 4‐5 Air Force

achievements, 31 average funded strength, 142 capability, future, 39, 40‐1 ceremonial activities, 39 Chief of Air Force, responsibilities, 39 Cyclone Pam response, 39, 80, 81, 84 deliverables, 40‐1 flying hours, 40‐1 gender restrictions, 153 humanitarian support, 31, 39, 80, 81, 84 key performance indicators, 41 member numbers, 15, 128, 129 Mount Sinjar airdrop, Iraq, 31 Operation Bring Them Home, 39, 42 women, 148, 152 Air Force Act 1923, 8 Air-to-Air Refuelling Capability (AIR 5402), 91, 114 Airbus Group Australia Pacific, 57, 107 Airservices Australia, 39 annual report corrections, 194 Anzac, HMAS, 32 Anzac Day 2015, 17, 55, 63, 78, 101, 115 AP-3C Orion aircraft, 81 Approved Major Capital Investment Programme, 177‐8 APS Job Families Project, 137 APS Statistical Bulletin, 155 Army

achievements, 36 average funded strength, 142 Capability Realisation Plan, 36 Chief of Army, responsibilities, 36 Cyclone Pam response, 36, 80, 81, 84 deliverables, 37‐8 equipment delivery, 36 G20 Leaders’ Summit, 36, 88 gender restrictions, 153 key performance indicators, 38

members, numbers, 15, 128, 129 objectives, 36 Operation Render Safe, Bougainville, 36, 81 Project LAND, 36, 96 rate of effort (flying hours), 38 Reserves, 88, 130 women, 148 AS/NZS 9001:2008 international quality management standard,

181

ASDEFCON templates, 177 asset management, 175 Associate Secretary and Chief Operating Officer, 45 Associated Electronic Services, 112 Association of Southeast Asian Nations (ASEAN), 30 Audit Branch, 162 audit work programme, 162 Auditor-General, reports, 171‐2 audits

ANAO, 162 military justice unit, 163 performance audit, 163 AusTender, 175 Australia and United States Environmental Monitoring Group,

182

Australian Accounting Standards, 175 Australian Army Nursing Service (AANS), 116 Australian Civil‐Military Centre, 60 Australian Cyber Security Centre, 43, 44 Australian Defence Credit Union, 72 Australian Defence Force (ADF). see also Reserves

actual funded strength, 15, 127 Cadet Scheme, 60 ceremonial activities, 17 complaint handling and resolution, 137‐9 conditions of service, 133, 136, 164 cultural change (Pathway to Change), 52, 53, 54, 60, 124,

137, 151, 155, 163 death and invalidity scheme, 46, 134 deaths, inquiries, 164 emergency assistance, 87, 88, 89 enlistment, 55, 128 Federation Guard, 17, 60 First Principles Review see First Principles Review Gap Year programme, 128, 149 gender

adviser, 152 restrictions, removal, 151, 153 leadership, 11 members housing assistance response, 72 on operations overseas, 17 military justice unit audits, 163 mission, 7 operations 2014‐15 (see also under individual names of

operations) border protection, 88 emergency assistance, 84‐5, 87, 88, 89 overseas, 80‐3 personnel deployed, 17 Parliamentary Programme, 60 remuneration, 133‐4, 136

200 DEFENCE ANNUAL REPORT 2014‐15

salary ranges (permanent members), 133‐4 Satellite Communications Terrestrial Enhancements project, 114 senior officers remuneration, 136 separations, 129 sexual misconduct reporting, 138 star-ranked officers, 145 superannuation, 134 Total Workforce Model, 130 United Nations missions, 5, 30, 82, 83 women

combat role employment categories, 151 and cultural reform, 151 workforce actual funded strength, 15, 128

average funded strength, 128 enlistments, 128 gender, 147‐8 growth, 15, 128 headcount, 15, 128 location, 144 participation rate

Indigenous people, 153 women, 151 permanent strength, 128, 142 Project Suakin, 130 reserves, 128, 130, 142 separations, 129 staffing figures, 127 star-ranked officers, 145 total, 142 Total Workforce Model, 130 Workplace Remuneration Arrangement 2014‐17, 133, 136 Australian Geospatial-Intelligence Organisation, 1, 43 Australian Government Security Vetting Agency (AGSVA), 43 Australian Human Rights Commission (AHRC), 52, 53, 54, 124 Australian Indigenous Leadership Centre Certificate IV, 153 Australian industry participation policy, 176 Australian Military Sales Office, 10, 112 Australian National Action Plan on Women, Peace and Security

2012‐2018, 27, 152 Australian National Audit Office (ANAO) access clauses, 184 Central Administration of Security Vetting (review), 43

contract governance, 123 performance audits, 171‐2 Australian Public Service (APS) Code of Conduct, 7

complaint handling and resolution, 137‐9 disability initiatives, 155 Indigenous Pathways programme, 153 Job Families Project, 137 managing and developing staff, 137 performance pay, 136 productivity gains, 136 remuneration, 2, 134‐5, 136 salary ranges, 135 Senior Executive Service (SES)

numbers, 146 performance management, 2 performance pay, 136

remuneration, 136 360-degree feedback scheme, 2 separations, 132 State of the Service Report, 155 Values, 7 voluntary redundancy programme, 2 women employment pathways, 150 representation, 150 work value review programme, 137 workforce actual FTE, 15, 131 education and training, 137 gender, 2, 146, 148 headcount, 132 location, 144 non-SES numbers, 137 overview, 15 participation rate, Indigenous people, 2, 153 people with disability, 2, 155, 156 recruitment, 132 reduction, 2, 15, 131, 132 separations, 132 SES, 2, 132 staffing figures, 15, 127, 131, 142 Australian Public Service Commission, 137, 153, 155 Australian Regular Army. see Army Australian Signals Directorate, 43, 58 Australian Strategic Policy Institute, 8 Australian Workplace Equality Index (AWEI), 156 Australia‐Nepal Friendship Society, 35

B base services contractual reform, 46, 123 Beyond the Defence Cooperation Programme, 30 Border Protection Command programme, 64 Build Partner Capacity mission, 82 Bundaberg, HMAS, 57 Business Access Office network, 176 Business Enterprise Committee, 2

C C-17A Globemaster aircraft, 4, 35, 39, 42, 66, 84, 88, 89, 96 C-130J Hercules aircraft, 4, 39, 84 Cadet Scheme, 60 CALD Action Plan, 155 Canberra, HMAS, 32, 91, 102 Canberra class vessels, 100, 110 Capability Acquisition and Sustainment Group, 2, 66, 91 Capability Development Group

deliverables, 67‐8 key performance indicators, 68 responsibilities, 66 work value review programme, 137 Capital Facilities Programme, 178 cases

Comcare v Commonwealth of Australia ACD88 of 2013, 170 Danthanarayana and Another v Commonwealth of Australia & Ors [2014] FCA 552, 170 Stack v Chief of Army Department of Defence [2014]

FCCA 520, 171

DEFENCE ANNUAL REPORT 2014‐15 201

CEA Technologies, 91 Centenary of Anzac commemorations, 17‐19, 26, 55, 63, 70 personal links, 18‐19

Central Administration of Security Vetting (ANAO review), 43 Centralised Processing Project, 50, 51 ceremonial activities (ADF), 17, 32, 39, 60 Chief Capability Development, 66 Chief Defence Scientist, 57 Chief Executive Officer (DMO). see Defence Materiel

Organisation (DMO) Chief Finance Officer, 69 Chief Finance Officer Group activities, 161, 175, 176

Defence Finance Shared Services Programme, 69 deliverables, 70 key performance indicators, 70 responsibilities, 69 Chief Information Officer Group (Programme 1.7)

achievements, 50 Defence Single Information Environment, 50 deliverables, 51 funding from Approved Major Capital Investment

Programme, 177

ICT consolidation, 50 key performance indicators, 51‐2 Chief of Air Force, 39, 74 Chief of Army, 36, 74 Chief of Joint Operations, 64 Chief of Navy, 32, 74 Chief of the Defence Force (CDF) appointment, 27 commissions of inquiry, 164 remuneration, 136 responsibilities, 27 review, 4‐5 Chief Operating Officer (COO) organisation. see also Chief

Information Officer; Defence Chief Information Officer; Defence People; Defence Support and Reform Associate Secretary and Chief Operating Officer, 45 deliverables, 48 Enterprise Management System, 45 First Principles Review, 8, 11, 45, 52, 53, 91, 92, 113,

121‐5

key performance indicators, 49 overview, 45 programmes, 46‐56 Chiefs of Service Committee, 160 civilian (APS and contractor) average full-time equivalent, 131 coastline security, 88 Coastwatch civil surveillance programme, 64 Code of Conduct (APS), 7 Coles review, 111 Collins submarines, 111 Combined Inter-Agency Task Force (MH17), 82 Combined Maritime Force (Middle East Area of Operations),

5, 82

Combined Task Force 150 (maritime counter terrorism), 82 Comcare, 140, 141‐2, 170 commemorations Anzac Centenary, 17‐19, 26, 55, 63, 70, 82 commissions of inquiry, 164

Commissions of Inquiry Cell, 164 Commonwealth Authorities and Companies Act 1997, 161 Commonwealth Disability Strategy, 155 Commonwealth Fraud Control Framework 2014, 161 Commonwealth Government Indigenous Procurement Policy,

176

Commonwealth Ombudsman, 162, 172 Commonwealth Procurement Rules (CPRs), 2, 161, 175, 183 Commonwealth Resource Management Framework, 161 complaint handling and resolution, 137

sexual misconduct, 138‐9 unacceptable behaviour, 138‐9 Computer Network Defence (CND) Project, 50 ComSuper, 71 ComTrack. see Defence Complaints Management, Tracking

and Reporting System consultancies, 183 Contract Template Selection and Tailoring Guide, 176 contracts

exempt, 185 governance, 123 no ANAO access clause, 184‐5 Counter Improvised Explosive Device Task Force, 10, 60, 112 Creating One Defence report, 121 cultural reform (Pathway to Change), 52, 53, 54, 60, 124, 137,

151, 155, 163

Culturally and Linguistically Diverse Action Plan, 52 culturally and linguistically diverse (CALD) communities, 155 Cyber and Cryptomathematics Research (CMR) Group, 58 cyber security, 43, 44, 137 Cyclone Lam, 5, 39, 88, 89 Cyclone Marcia, 5, 39, 88, 89 Cyclone Pam, 1, 30, 32, 36, 39, 80, 81, 84

D Danthanarayana and Another v Commonwealth of Australia & Ors [2014] FCA 552, 170 Defence. see also Australian Defence Force (ADF); Australian

Public Service (APS); Defence Housing Australia; Defence Materiel Organisation (DMO); Department of Veterans’ Affairs advertising and market research, 186‐7 Annual Procurement Plan, 175 asset management, 175 capital investment, 160, 177‐8 Chiefs of Service Committee, 160 consultancies and contracts, 183 cultural change, 124 cyber capability, 43 Defence Audit and Risk Committee, 160, 162 Defence Capability and Investment Committee, 160 Defence Civilian Committee, 159 Defence Committee, 2, 159, 162 disability, employees, 156 disability initiatives, 125, 155 diversity of personnel CALD backgrounds, 155 Indigenous Australians, 153‐4 LGBTI people, 156 people with disability, 125, 155‐6, 157 women, 150‐3

202 DEFENCE ANNUAL REPORT 2014‐15

environmental performance, 181‐2 external scrutiny, 171‐2 First Principles Review see First Principles Review fraud control, 161‐2 Gender Equality Advisory Board, 150, 161 grants, 191‐2 ICT capability, 50 Indigenous participation and engagement, 153‐4 leadership, 11 legal expenses, 189 LGBTI members and employees, 156 materiel acquisition agreements, 95, 177 materiel sustainment agreements, 111 mission, 7 net cash spend, 12 organisational structure, 8‐9 parliamentary business, 167‐8 payment of accounts, 193 people with disability, 125, 155‐6, 157 personnel

complaint handling and resolution, 137‐9 unacceptable behaviour, 138‐9 portfolio structure, 8 principal civilian adviser, 27 procurement, 175‐6 programmes (see programmes) remuneration, 133 resource statement, 14 resource summary, 12‐14 role, 7 Secretary and Chief of the Defence Force Advisory

Committee, 50, 159 senior committees, 159‐61 senior leadership changes, 11

remuneration, 136 sexual misconduct reporting, 138‐9 statutory offices, 8 Strategic Command Group, 160 strategic direction, 11 values, 7 women, initiatives for, 150‐1 work health and safety (see work health and safety) Work Health and Safety Committee, 139 workforce (see workforce) Defence Act 1903, 7, 133, 136, 163, 193 Defence Administration Assistance Programme (DAAP), 125 Defence Annual Procurement Plan, 175 Defence Audit and Risk Committee, 160, 162 Defence Bank, 72 Defence Capability and Investment Committee, 160 Defence Capability Plan (DCP), 57, 59, 66, 67, 68, 128, 160,

177

Defence Civilian Committee, 159 Defence Committee, 2, 159, 162 Defence Complaints Management, Tracking and Reporting System (ComTrack), 138

Defence Cooperation Programme, 29‐30 Defence Diversity and Inclusion Strategy 2012‐2017, 150, 155 Defence employment offer, 133 Defence Enterprise Collective Agreement, 134‐5, 136

Defence Environmental Clearance Certificate, 181 Defence Estate Quality Management System, 181 Defence Force Credit Union. see Defence Bank Defence Force Discipline Act 1982, 8 Defence Force Ombudsman, 172 Defence Force Regulations 1952, 137, 170 Defence Force Remuneration Tribunal, 133, 136 Defence Force Retirement and Death Benefits (DFRDB)

Scheme, 71

Defence Forces Retirement Benefits Act 1948, 171 Defence Force Superannuation Benefits, 71 Defence Force Superannuation Nominal Interest, 71 Defence Fraud Control Plan No. 11, 161 Defence Home Owner Assistance Scheme, 72 Defence Home Owner Scheme, 72 Defence Housing Australia, 73 Defence Imagery and Geospatial Organisation. see Australian

Geospatial-Intelligence Organisation Defence Indigenous Employment Strategy 2012‐2017, 153 Defence (Inquiry) Regulations 1985, 164 Defence Intelligence Organisation, 43 Defence Legislation (Enhancement of Military Justice) Act 2015, 46 Defence Materiel Organisation (DMO)

accountability, 113 achievements, 91 appropriations, 94 approvals (major), 178 Approved Major Capital Investment Programme, 177‐8 APS employee numbers, 142 assets management, 175 Australian Military Sales Office, 10, 112 budgeted expenses and resources, 94 Chief Executive Officer

accountability to minister, 113 review, 91 Commercial Group, 91, 177 committee structure, 113‐14 Council of Chairs’ Forum, 113 delisting as entity, 91 Environmental Management System, 182 Executive Committee, 113 financial performance, 92‐4 First Principles Review, 8, 91, 92, 113 functions, 92 governance, 113 grants, 192 Industry Skilling Enhancement package, 192 industry support programmes budget, 192 legal expenses, 190 Management of Capability Acquisition (Programme 1.1) deliverables, 95‐101 expenses, 94 key performance indicators, 101 overview, 95 Management of Capability Sustainment (Programme 1.2) deliverables, 103‐11 expenses, 94 key performance indicators, 111 objective, 103 product support, 103 materiel acquisition agreements, 95, 177

DEFENCE ANNUAL REPORT 2014‐15 203

Materiel Audit and Risk Committee, 113 materiel sustainment agreements, 111 New Air Combat Capability—Industry Support Programme, 192

‘One Quality Management System’ reform programme, 92 outcome and programme structure, 95 performance, 92 performance audits, 171‐2 Priority Industry Capability Innovation Programme, 192 programme funding, 94 projects of concern, 91, 114 Provision of Policy Advice and Management Services

(Programme 1.3) deliverables, 112 expenses, 94 objective, 112 reform, 92 removal as listed entity, 8 role, 92 senior committees, 113‐14 Skilling Australia’s Defence Industry Programme, 192 Strategic Commercial Legal Panel, 190 strategic priorities, 92 Defence P&C Job Family Professionalisation Programme, 177 Defence People Group (Programme 1.8). see also workforce

achievements, 52‐3 cultural reform, 52 deliverables, 53‐4 Deputy Secretary Defence People, 52 human resources shared services reform, 53 key performance indicators, 55 objectives, 52 work value review programme, 137 Defence Procurement Policy Manual, 176 Defence Reconciliation Action Plan 2015‐17, 153 Defence Religious Advisory Committee to the Services, 155 Defence Science and Technology Organisation (DSTO)

awards to staff, 58 Chief Defence Scientist, 57 counter-IED systems, 10 Cyber and Cryptomathematics Research (CMR) Group, 58 Cyber and Electronic Warfare Division, 10 deliverables, 59 highlights, 57 key performance indicators, 59 MH17 disaster, 57 MH370 search, 57 Partnerships Week, 57 priorities, 57 Scientific Engineering Services, 10 soldier protection technology, 10, 57 strategic research investment programme, 57 Sydney siege, 57 Defence Secret and Restricted networks, 50, 51 Defence Security Authority, 43 Defence Signals Directorate. see Australian Signals Directorate Defence Single Information Environment, 50 Defence Support and Reform Group

asset management (whole-of-life), 46 base services contracts, 46, 123 communication and media, 46, 47

deliverables, 48 funding from Approved Major Capital Investment Programme, 177 key performance indicators, 49 legal services, 46 ministerial team, 46 responsibilities, 46 Defence Whistleblower Scheme, 162 Defence White Paper

2009, 128, 173 2015, 1, 11, 27, 52, 69, 167 Defence Work Health and Safety (WHS) Strategy 2012‐2017, 139, 140

Department of Defence. see Defence Department of Finance, 177 Department of Foreign Affairs and Trade, 80, 84 Department of Human Services

Indigenous Apprenticeship (traineeship) programme, 153 Department of Veterans’ Affairs housing scheme MOU, 72 Deputy Secretary Defence People, 52 Deputy Secretary Intelligence and Security, 43 Deputy Secretary Strategy, 1, 27 diarchy, 8 Digital Video Guard, 57 Directorate of Select Incident Review, 164 disability reporting mechanisms, 155‐6 Diversity and Inclusion Strategy 2012‐2017, 52, 150, 155

E E-7A Wedgetail aircraft, 39, 91, 96 Edinburgh, RAAF, 88, 89 11th Brigade Army Reserves, 89 emergency assistance, 87, 88, 89 Emergency Management Australia, 87 Emergency Management Queensland, 88 Engineering Support Group, 89 English Language Programme, Timor-Leste, 30 Enterprise Management System, 45 environmental performance, 181‐2 Environment Protection and Biodiversity Conservation Act 1999, 181 ethics and fraud awareness programme, 161 Evaluation and Negotiation Centre of Excellence, 177 Exercise Kowari (United States and China), 36 Exercise Southern Jackaroo (United States and Japan), 36 Exercise Talisman Sabre 2015, 56, 60, 152, 182

F F-35A Lightning II Joint Strike Fighter, 39 F/A-18F Super Hornet aircraft, 57 Fair Work Act 2009, 134, 170 Federation Guard (ADF), 60 Financial Management and Accountability Act 1997, 161 First Principles Review, 1, 2, 8, 11, 45, 52, 53, 91, 92, 113, 121‐5

base services contractual reform, 46, 123 Creating One Defence report, 121 Enablers work stream, 122 first principles, 121 implementation plan, 1 objective, 121 One Defence approach, 1, 121‐2

204 DEFENCE ANNUAL REPORT 2014‐15

review team, 1, 121 service delivery reform programme, 122 First Time Manager programme, 137 First Time Supervisor programme, 137 First World War Anzac commemorations, 17‐19, 55, 63, 78, 101, 115 Australian Army Nursing Service (AANS), 116 Five Eyes partners, 57 Five Power Defence Arrangements, 30 flight MH17, 1, 57 flight MH370, 4, 39, 42, 43, 46, 57, 60, 82 Force Structure Review, 1 Forgacs, 30 Forum Fisheries Agency, Honiara, 81 fraud control programme, 161 investigations, 161 loss and recoveries, 162 Freedom of Information Act 1982, 172 freedom of information (FOI), 172 Future Submarine Programme, 2, 101

G G20 Leaders’ Summit, Brisbane, 32, 36, 88 Gender Equality Advisory Board, 150, 161 Government’s strategic direction. see Defence White Paper grants, 191‐2 grievance, 164‐5

H hazardous chemicals reduction programme, 140 Headquarters Joint Operations Command (HQJOC) Domestic and Regional Operations Branch, 80

heavy landing craft, decommissioning, 32 Helicopter Aircrew Training System, 66, 178 Help Enterprises, 125 Hobart, NUSHIP, 32 housing. see Defence Home Owner Assistance Scheme Housing Assistance (Programme 1.16), 72‐3 humanitarian assistance, 4, 5, 29, 31, 32, 39, 64, 80, 81, 82,

84, 102

summary statistics, 85

I ICT. see Chief Information Officer Group (Programme 1.7) Indigenous community engagement, 56 Indigenous Employment Strategy 2012‐2017, 153 Indigenous-owned enterprise, 176 Indigenous Performance Group, 17 Indigenous pre-recruitment courses, 154 Indigenous University Support Programme, 153 Indonesia, 29, 31 Industry Skilling Enhancement package, 192 Information Publication Scheme, 172 Inspector-General of Intelligence and Security, 43 Inspector-General of the Australian Defence Force (IGADF)

activities, 163 Directorate of Select Incident Review, 164 functions, 163 military justice-related training, 165 military justice unit audits, 163

public interest disclosures, 162 integrated investment plan, 1 Intellectual Disability Employment Initiative, 155 Intelligence and Security Group

cyber security, 43, 44 deliverables, 44 Deputy Secretary Intelligence and Security, 43 highlights, 43 key performance indicators, 45 MH17 disaster, 43 Intelligence Services Act 2001, 43 internal audit services, 163 International Mission for Protection of Investigation (MH17), 82 Investment Committee, 2 Invictus Games, London 2014, 157 Iraq

air strikes against Daesh, 4, 39 Building Partner Capacity mission, 4, 82 Mount Sinjar airdrop, 31

J Job Families Project, 137 Joint Committee of Public Accounts and Audit, 168 Joint Logistics Command, 182 Joint Operations Command Group

Border Protection Command programme, 64 deliverables, 64‐5 key performance indicators, 65 responsibilities, 64 Joint Parliamentary Committee on Intelligence and Security,

168

Joint Standing Committee on Foreign Affairs, Defence and Trade, 167 Joint Standing Committee on Public Works, 168 Joint Standing Committee on Treaties, 168 Joint Strike Fighter F-35A, 39 Joint Task Force 633, 5 JP 2048 Phase 4A/4B Amphibious Deployment and

Sustainment project, 91, 100 judicial decisions, 170‐1

L LAND 2072 Phase 2B Battlespace Communications Systems, 91, 178 leadership changes, 11 legal expenses, 189 LGBTI members and employees, 156 LGBTI people, 156 Lintek, 112 Lockheed Martin Australia, 50, 51

M Malaysia Airlines flights MH370, 4, 57 MH17 disaster, 1, 4, 39, 42, 43, 46, 57, 60, 82

maritime surveillance projects, 5, 81 Maritime Systems and Technologies Asia conference, 2015, 57 market research expenditure, 186‐8 materiel acquisition agreements, 95, 177 materiel sustainment agreements, 111 memorandum of understanding

DEFENCE ANNUAL REPORT 2014‐15 205

Department of Veterans’ Affairs, 72 MH-60 Romeo Seahawks, 32, 98, 106, 107 MH17 disaster (Operation Bring Them Home), 4, 39, 42, 43, 46, 57, 60, 82 Micreo, 112 Middle East Area of Operations, 31, 32, 57, 83, 105 military redress of grievance, 164‐5 Military Superannuation and Benefits Scheme (MSBS), 71, 134 Minister for Defence, 10, 11, 27, 46, 113, 121, 133, 136, 162,

163, 164, 178

Minister for Finance, 178 ministerial directive, 2 ministerial responsibilities, 11 Mount Sinjar airdrop, Iraq, 31 MSBS Retention Benefit, 71 multi-role helicopter (MRH-90), 84, 88, 89, 98, 102, 114 Multi Role Tanker Transport aircraft, 39, 66, 96, 178 multicultural diversity, 155

N National Armaments Director, 113 National Australia Bank, 72 National Disability Strategy 2010‐2020, 155‐6 National Security Committee of Cabinet, 43, 46, 178 national support tasks, 88

total resourcing, 87 NATO-led Resolute Support mission, 4‐5, 74, 82 Naval Defence Act 2010, 8 Navy

achievements, 32 activities, 32 Armidale class vessels, 33, 34, 109 average funded strength, 142 aviation, 32 Canberra class vessels, 100, 110 ceremonial activities, 32, 82 Chief of Navy, responsibilities, 32 Cyclone Pam response, 32, 80, 81, 84 deliverables, 33‐4 gender restrictions, 153 key performance indicators, 34 member numbers, 15, 128, 129 Middle East Area of Operations, 32 narcotics seizures, 5 Nepal earthquake, 35 Operation Manitou, 32, 82, 110 Reserves, 130 role, 32 women, 148 Nepal earthquake, 5, 35, 39, 80, 81, 84 New Air Combat Capability—Industry Support Programme, 192 New Starters programme, 137 Next Generation Desktop Project, 50, 51 nurses serving, First World War, 116

tributes, 117

O Occupational Health and Safety Act 1991, 170 Office of the Inspector-General of Intelligence and Security, 43 Office of the Secretary and CDF (Programme 1.1)

Defence Cooperation Programme, 29‐30

deliverables, 27‐9 key performance indicators, 29 role, 27 Official Public Account, 73 Ombudsman Act 1976, 172 One Defence approach, 121‐2 Operation Aslan, 5, 82, 83 Operation Bring Them Home (MH17 disaster), 4, 39, 42, 43,

46, 57, 60, 82

Operation Gateway (maritime surveillance patrols), 5, 81 Operation Hawick (ADF MH17 response), 43, 82 Operation Highroad (Afghanistan), 82 Operation Manitou (maritime operations), 32, 82 Operation Mazurka (Middle East), 5, 82 Operation Nepal Assist, 81 Operation Ocean Shield (counter-piracy operation), 5, 82 Operation Okra (Iraq), 4, 39, 46, 82, 104, 106 Operation Pacific Assist (Solomon Islands and Vanuatu), 80,

81, 84

Operation Paladin, 5, 82, 83 Operation Palate II, 82, 83 Operation Parapet (G20 Leaders’ Summit), 32, 36, 88 Operation Render Safe (Pacific island nations), 36, 81 Operation Resolute (border protection), 5, 32, 88 Operation Slipper (Afghanistan and Middle East), 39, 82

welcome home parades, 74‐5 Operation Solania (maritime surveillance patrols), 5, 81 operations, immediate neighbourhood. see also Papua New Guinea; Solomon Islands; Timor-Leste

deliverables, 81 key performance indicators, 82 overview, 81 operations, supporting wider interests, 82 Other Administered (Programme 1.17), 73 Outcome 1: Protection and advancement of Australia’s national

interests

deliverables, 23 key performance indicators, 23 programmes (see programmes) summary, 23 total cost, 24‐6 Outcome 2: Advancement of Australia’s strategic interests

through the conduct of military operations net additional cost of operations, 78‐9 programmes (see programmes) summary, 77 total cost, 77 Outcome 3: Support for the Australian community and civilian

authorities programme 3.1, 88 summary, 87 total cost, 87 Outcome DMO: Contributing to the preparedness of the

Australian Defence organisation through acquisition and through-life support of military equipment and supplies, 95 budgeted expenses and resources, 94 programmes (see Defence Materiel Organisation (DMO))

P P-8A Poseidon, 39 Pacific Maritime Security Programme, 30

206 DEFENCE ANNUAL REPORT 2014‐15

Pacific Patrol Boat Programme, 30 Pakistan, 29 Papua New Guinea (PNG), Defence Cooperation Programme, 29, 30

Parliamentary Joint Committee on Intelligence and Security, 43 parliamentary joint committees, 167‐8 Parliamentary Programme (ADF), 60 Parliamentary Standing Committee on Public Works, 178 Pathway to Change: Evolving Defence Culture, 2, 52, 53, 54,

60, 124, 137, 151, 155, 163 P&C Job Family Professionalisation Programme, 177 people with disability, 2, 125, 155‐7 Plan Beersheba, 36 Plan Jericho, 39 Portfolio Additional Estimates Statements 2014‐15, 69 Portfolio Budget Statements

2014‐15, 69 2015‐16, 12 Pride in Diversity Australia, 156 Prime Minister, 74 Priority Industry Capability Innovation Programme, 192 procurement, 175‐7 programmes Outcome 1. Programme 1.1: Office of the Secretary and CDF, 27‐31 Programme 1.2: Navy Capabilities, 32‐5 Programme 1.3: Army Capabilities, 36‐8 Programme 1.4: Air Force Capabilities, 39‐42 Programme 1.5: Intelligence Capabilities, 43‐5 Programme 1.6: Chief Operating Officer—Defence

Support and Reform, 46‐9 Programme 1.7: Chief Operating Officer—Chief Information Officer, 50‐2 Programme 1.8: Chief Operating Officer—Defence People,

52‐6

Programme 1.9: Defence Science and Technology, 57‐9 Programme 1.10: Vice Chief of the Defence Force, 60‐2 Programme 1.11: Joint Operations Command, 64‐5 Programme 1.12: Capability Development, 66‐8 Programme 1.13: Chief Finance Officer, 69‐70 Programme 1.14: Defence Force Superannuation Benefits,

71

Programme 1.15: Defence Force Superannuation Nominal Interest, 71 Programme 1.16: Housing Assistance, 72‐3 Programme 1.17: Other Administered, 73 programmes Outcome 2.

Programme 2.1: Operations Contributing to Security of Immediate Neighbourhood, 81‐2 Programme 2.2: Operations Supporting Wider Interests, 82‐5 programmes Outcome 3.

Programme 3.1: Defence Contribution to National Support Tasks, 88‐9 programmes DMO Outcome Programme 1.1: Management of Capability Acquisition,

95‐101

key performance indicators, 101 Programme 1.2: Management of Capability Sustainment, 103‐111 key performance indicators, 111 Programme 1.3: Provision of Policy Advice and

Management Services, 112

Project LAND, 36, 96 Project Suakin, 130 Public Governance, Performance and Accountability Act 2013, 45, 69, 113, 137, 160, 161, 175

Public Governance, Performance and Accountability Rule 2014, 69, 161 Public Interest Disclosure Act 2013, 162 Public Interest Disclosure (PID) Scheme, 162 Public Sector Workplace Bargaining Policy, 136 Public Service Act 1999, 7, 134, 137

Q questions on notice, 169

R radio-controlled improvised explosive devices, 10, 112 Rapid Prototyping, Development and Evaluation Programme, 66

Re-Thinking Systems Review, 46 Reconciliation Action Plan 2015‐17, 153 Redwing programme, 10, 57 regional security and stability, 81 Religious Advisory Committee to the Services, 155 Remuneration Tribunal, 133, 136 Remuneration Tribunal Act 1973, 136 Reserves

number of Reservists, 128, 130, 142 paid strength, 130 Project Suakin, 130 Resource Management Guide 417—Supplier Pay on Time or

Pay Interest Policy, 177 Review into the treatment of women in the Australian Defence Force, Phase 2 report, 151 Review of employment pathways for APS women in the

Department of Defence, 150 Romeo Seahawks, MH-60, 32, 98, 106, 107 Royal Australian Air Force. see Air Force Royal Australian Navy. see Navy Russian task group (Coral Sea), 88

S Samoa, 30 Seahawk helicopters, 103 Secretary and Chief of the Defence Force Advisory Committee,

50, 159

Secretary and Chief of the Defence Force Gender Equality Advisory Board, 150, 161 Secretary of the Department of Defence functions, 27

remuneration, 136 review, 1‐3 select incident review, 164 SeMPRO. see Sexual Misconduct Prevention and Response

Office

Senate committees, 168 Senate Estimates, 168 Senate Standing Committee on Foreign Affairs, Defence and Trade, 169, 170

Senior Executive Service (SES) APS salary ranges, 135

DEFENCE ANNUAL REPORT 2014‐15 207

conditions, 136 performance management, 2 performance pay, 136 360-degree feedback scheme, 2 Senior Leadership Group, remuneration, 136 Sentinel, 53, 140 service delivery reform programme, 122 725 Squadron (Naval Air), 32, 98, 107 Sex Discrimination Commissioner, 151 Sexual Misconduct Prevention and Response Office (SeMPRO),

138

sexual orientation diversity, 156 Skilling Australia’s Defence Industry Programme, 192 small business, procurement initiatives, 176 Smart Sustainment Reform Programme, 91 Solomon Islands, 30, 81, 84 South Australian Country Fire Service, 88, 89 Special Operations, 4, 36, 66 Stack v Chief of Army Department of Defence [2014] FCCA

520, 171

Standalone Network Remediation Programme, 50 Strategic Command Group, 160 Strategic Communications Modernisation-Land Project, 50 strategic direction, 11 Strategic Policy and Intelligence Group, 2 strategic research investment programme, 57 Success, HMAS, 5, 82, 110 superannuation, 52, 71, 134 Superannuation Nominal Interest, 71 Sydney, HMAS, 32

T tactical payment scheme, 193 Technical Cooperation Programme, 57 Terrestrial Communications Project, 50, 51 3rd Australian General Hospital, 116 13th Brigade Army Reserves, 17, 88, 89 Timor-Leste, Defence Cooperation Programme, 29, 30 Tobruk, HMAS, 32, 84 Tonga, 30 Top 4 Strategies to Mitigate Targeted Cyber Intrusions, 43 Tuvalu, 30

U Ukraine, 4, 36, 43, 60, 82 Ultra Electronics Australia, 112 Unapproved Major Capital Investment Programme, 66 United Nations

missions, 5, 30, 82, 83 Security Council Resolution 1325 on Women, Peace and Security, 152 United States, Force Posture Agreement, 46

V Values (APS), 7 Vanuatu, 30, 32, 36, 39, 80, 81, 84 vetting practices, 43 Vice Chief of the Defence Force, 2, 60 Vice Chief of the Defence Force Group

achievements, 60 deliverables, 61 key performance indicators, 62 mission, 60 responsibilities, 60

W Whistleblower Scheme, 162 WHS Management System, 139 Wideband Global SATCOM, 50 women, 150‐3 ‘Women in the ADF’ report, 151 work health and safety

Comcare on interventions and inspections, 141 hazardous chemicals reduction programme, 140 performance, 139 policy development, 140 safety awareness surveys, 142 Sentinel, 53, 140 statistics, 141‐2 Work Health and Safety Act 2011, 49 work health and safety management system (Sentinel), 53, 140 Work Health and Safety (WHS) Strategy 2012‐2017, 139, 140 workforce. see also Australian Defence Force (ADF); Australian

Public Service (APS); Defence People Group (Programme 1.8) diversity, 150‐7 gender, 2, 146‐8 headcount, 143 Indigenous participation, 2, 153‐4 location, 144 people with disability, 2, 125, 155‐6 permanent employees, 142 planning, 127, 128‐32 summary, 16, 127 Workplace Remuneration Arrangement 2014‐17, 52, 133, 136

Y Young Endeavour, 32

© Commonwealth of Australia 2015

ISSN 1323-5036 (print)

ISSN 2203-0050 (online)

Volume One: Performance, governance and accountability

ISBN 978-0-9941680-8-5 (print)

ISBN 978-0-9941680-9-2 (online)

ISBN 978-0-9944235-0-4 (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.

The terms under which the Coat of Arms can be used are detailed on the It’s an Honour website.

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 2014‐15.

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:

First Assistant Secretary Ministerial and Executive Coordination and Communication Division Department of Defence Russell Offices R1-5-A030 Canberra ACT 2600

Telephone: (02) 6265 7912

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 and the Australian Defence Force.

Editorial consultant: Wilton Hanford Hanover

Concept and design: Defence Publishing Service (DPS: APR018-15)

Photographs: Unless otherwise attributed, all photographs are from the Australian Defence Image Library http://images.defence.gov.au/fotoweb.

Printing: Elect Printing