The Challenge of Military Service: Defence Personnel Conditions in a Changing Social Context


Index

Background Paper 6 1997-98

David Anderson
Foreign Affairs, Defence and Trade Group
10 November 1997

Contents

Acknowledgments

Glossary

An Outline for Readers

Chapter 1: Introduction

Endnotes

Chapter 2: Trends in the Defence Budget and their Implications for Conditions of Service

Endnotes

Chapter 3: Regulation of Service Conditions

Policy Development
Regulation of Financial Conditions
1. Previous Pay-Fixing System
Kerr/Woodward
The Committee of Reference for Defence Force Pay
2. Existing Pay-Fixing System: The DFRT
Principal Features
Defence Force Advocate
Advantages of the DFRT
Present Membership of the DFRT
Determinations Made
3. Some Current Issues
1. Is the Tribunal appropriate for workplace bargaining?
2. The problem of who is the employer and who represents ADF members
3. Role of the Department of Workplace Relations and Small Business (DWR&SB)
4. Adversarial procedure and the Defence Force Advocate
5. The independence of the DFRT

Endnotes

Chapter 4: Financial Conditions: Pay

Endnotes

Chapter 5: Financial Conditions: Allowances

Endnotes

Chapter 6: The Service Family

The Impact of Changes in Society
The Development of a Tri-Service Support System
The Hamilton Report
Australian Defence Families Information and Liaison Staff (ADFILS)
The Organisational Problem
The Pratt Report
Defence Community Organisation
Family Information Network for Defence (FIND)
The Defence Family Support Funding Program
Major Issues
1. Education
The problem
The Review of Education Assistance for ADF Children
2. Employment of Spouses
Some rejected projects
The current policy
3. Child Care
The problem
The current program
The Review of the Defence Child Care Program
4. Defence Special Needs Support Group (DSNSG)
The National Consultative Group of Service Families (NCGSF)
Background
Organisation
Activities
Problems
The Future

Endnotes

Chapter 7: Members Without Families

Endnotes

Chapter 8: Housing

Introduction
The Nature of Housing Assistance Currently Provided
Why Does Defence Need to Provide Housing Assistance for ADF Members?
Principal Tenant Concept
How Should Defence Provide Housing Assistance?
What kind of assistance do members need?
Why not provide cash and let members find their own accommodation?
Should Defence provide the entire stock of housing?
Should Members With Family (MWF) and Members Without Family
(MWOF) Receive Different Housing Assistance?
Early Housing Problems
The Defence Housing Authority (DHA)
Background
Achievements of the DHA
1. Fall in sub-standard stock.
Table 3: Quality of Houses Under Management
2. Repair and maintenance.
3. Tenant Satisfaction
Recent Trends
Leasing
Joint Ventures
DHA Finances
Criticisms
Defence HomeOwner
Deficiencies in Current Housing Assistance
Home Ownership
Defence Service Homes Scheme
Background
The $25 000 maximum
Recent developments
ADF Home Loan Assistance Scheme (ADFHLAS)

Endnotes

Chapter 9: Medical Care, Leave and Leave Travel

Endnotes

Chapter 10: Compensation and Repatriation

Endnotes

Chapter 11: Defence Force Members and the Law

Endnotes

Chapter 12: Women in the Defence Force

Endnotes

Chapter 13: Conditions Relating to Overseas Service

Endnotes

Chapter 14: Return to Civilian Life

Defence Force Retirement and Death Benefits Scheme
Background
Principal Features:
Contributions
Retirement Pay
Commutation
Major Defect
Invalidity and Spouses Benefit
DFRDB and CSS: a Comparison
Recent Changes
Military Superannuation and Benefits Scheme
Background
Principal Features
Contributions
Benefits
Death Cover
Invalidity Benefit
Transfer Option
Retention Benefit
Changes
Comments
Resettlement

Endnotes

Chapter 15: Conclusion

Bibliography

Appendix A: Equivalent Ranks
Appendix B: History of Service Allowance
Appendix C: Ministers for Defence since 1945
Appendix D: Glenn Report-Summary of Recommendations
Appendix E: Burton Report-Recommendations

Acknowledgments

The scope and detail of this paper have been made possible by the generous cooperation of the Australian Defence Force, the Department of Defence, and to many individuals consulted for their specialised knowledge. In particular I wish to thank:

Air Vice Marshal F.D. Cox, former Assistant Chief of the Defence Force (Personnel)
Major General P.J. Dunn, AM, Head, Defence Personnel Executive
Air Commodore N.J. Ford, Director General, Financial Conditions
Brigadier W. Traynor, Director General, Personnel Planning and Policy
Colonel I.S. Gibbons, Director General, Defence Community Organisation

Special thanks to Lew Rayner, Director, Service Conditions, for coordinating the supply of information and providing much useful advice.

Sincere thanks also to the following people for patient consideration of extracts from the paper. Many gave up valuable time to discuss matters with me:

Colonel Bob Brown, Director, Salary and Allowances
Bronwen Grey, Director, Defence Equity Organisation
Group Captain Chris Stunden, Director, Defence Housing
Phil Charley, Director, Military Superannuation Schemes
Ian Hueston, Secretary, Defence Force Remuneration Tribunal
Glen Tye, Assistant Director, Compensation and Rehabilitation
Brian Bell, Assistant Director, Defence Housing Policy
John Rosser, General Manager, Systems and Administration, Defence Housing Authority
Paul Cain, Finance Manager, Defence Housing Authority
Mike Frawley, Australian Government Employment Group, Department of Workplace Relations and Small Business
Di Biggs, National Convener, National Consultative Group of Service Families
Margaret Fisk, National Coordinator, Defence Special Needs Support Group
John Radford, Returned and Services League of Australia
Lieutenant Commander David Letts, Defence Legal Office
Kerry Jeans, Defence Community Organisation
Julie Graham, Defence Community Organisation
Tracy Bassett, Defence Pay and Allowances
Squadron Leader Graham Giles, Defence Pay and Allowances

A number of others gave much appreciated assistance, and I apologise to those not listed.

The responsibility for the contents of the paper remains mine.

Glossary

ACPERS

Assistant Chief of Defence Force (Personnel)

ACPOL

Assistant Chief of Defence Force (Policy)

ADF

Australian Defence Force

ADFILS

Australian Defence Families Information and Liaison Staff

APS

Australian Public Service

ADFHLAS

Australian Defence Force Home Loan Assistance Scheme

ARA

Australian Regular Army

ArFFA

Armed Forces Federation of Australia

AWE

Average Weekly Earnings

AWOTE

Average Weekly Ordinary Time Earnings

CDF

Chief of the Defence Force

CES

Commonwealth Employment Service

COI

Kerr/Woodward Committee of Inquiry

COR

Committee of Reference for Defence Force Pay

COSC

Chiefs of Staff Committee

CPI

Consumer Price Index

CSHA(S)

Commonwealth State Housing Agreement - Service Personnel

CSS

Commonwealth Superannuation Scheme

DCO

Defence Community Organisation

DER

Defence Efficiency Review

DFA

Defence Force Advocate

DFDA

Defence Force Discipline Act

DFPCC

Defence Force Pay and Conditions Committee

DFPPC

Defence Force Personnel Policy Committee

DFRDB

Defence Force Retirement and Death Benefits Scheme

DFRT

Defence Force Remuneration Tribunal

DGSC

Director General Service Conditions

DGSPP

Director General Service Personnel Policy

DHA

Defence Housing Authority

DIR

Department of Industrial Relations

DIY

Do-It-Yourself

DRT

Discharge Resettlement Training

DSH

Defence Service Homes

DSNSG

Defence Special Needs Support Group

DVA

Department of Veterans' Affairs

DWR & SB

Department of Workplace Relations and Small Business

EA

Education Allowance

EANL

Education Assistance in the New Locality

EAOL

Education Assistance in Other Localities

ETA

Education Tuition Allowance

FIND

Family Information Network for Defence

FLO

Family Liaison Officer

FSFP

Family Support Funding Program

FSR

Force Structure Review

FWSN

Families with Special Needs

HMCs

Housing Management Centres

HQADF

Headquarters Australian Defence Force

INDMAN

Manual of Salaries and Conditions of Service for the Permanent Forces

LOA

Living Out Allowance

LOAFHA

Living Out Away From Home Allowance

LWOP

Leave Without Pay

MSBS

Military Superannuation and Benefits Scheme

MWF

Members with Family

MWOF

Members without Family

NAB

National Australia Bank

NCGSS

National Consultative Group of Service Spouses

NCO

Non-Commissioned Officer

OSS

Occupational Superannuation Standards

PSS

Public Sector Superannuation Scheme

PTC

Principal Tenant Concept

RDFWA

Regular Defence Force Welfare Association

REDLO

Regional Education Liaison Officer

SDA

Sex Discrimination Act

SRCA

Safety Rehabilitation and Compensation Act 1988

SVETS

Services Vocational and Educational Training Scheme

TAA

Temporary Accommodation Allowance

TAASA

Temporary Accommodation Allowance in Serviced Apartments

TRA

Temporary Rental Allowance

VEA

Veterans' Entitlements Act

An Outline for Readers

This paper, a full revision and update of a Background Paper written in November 1990, provides a survey of conditions of service in the Regular component of the Australian Defence Force. It is essentially a reference paper, giving a general outline of the background to policy, the existing policy, and some of the problem issues that remain. Generally the aim is not to analyse issues and policies but to provide basic information on a variety of personnel matters which are often complex, hopefully equipping the reader with a context for issues that may arise.

In twelve chapters information is provided on:

  • pay and allowances (chapters 3, 4 and 5);
  • the Service family (chapter 6);
  • single members of the Forces (chapter 7);
  • housing (chapter 8);
  • leave and travel entitlements (chapter 9);
  • compensation provision (chapter 10);
  • some legal aspects (chapter 11);
  • women in the Forces (chapter 12);
  • conditions for personnel deployed overseas (chapter 13), and
  • superannuation and resettlement provision (chapter 14).

There are issues to be debated in each of the above topics. But some areas, such as housing and regulation of ADF pay, are particularly subject to debate at present, and these chapters contain more analysis of issues. Other chapters, such as those dealing with allowances and leave provision, are very largely descriptive.

Many readers will be interested in only one or two subjects and will want to confine their reading to the relevant chapters. Hopefully the Contents Table has been given sufficient detail to facilitate the finding of most subjects. Chapter 1, the Introduction, gives some background information and discusses issues which are relevant to most, if not all, of the following chapters. One example is the posting requirement, the compulsory rotation of personnel from location to location.

Chapter 2, written by Derek Woolner, tries to put the conditions of service area in its economic context. It is essentially an economic introduction to the paper.

Throughout this paper the term 'Defence' refers (in context) to either the Department of..., the Defence Force, or both as the whole Defence organisation. Where 'defence' is used with no capital it refers to the subject or field, not the Defence organisation.

Chapter 1: Introduction

Members of the regular Defence Force constitute a microcosm of society. The Services employ people with skills and professions extending across the entire civilian work-force spectrum. Many tasks they perform, and circumstances of employment, however, have no civilian equivalent.

In looking at conditions of service this paper will cover some benefits and drawbacks of service life; financial rewards of pay, allowances, gratuities and bounties; compensation and reimbursement; and the machinery for regulating service conditions. Each chapter warrants a paper in its own right; this paper can, at most, provide for each area a general outline of the background to policy, the existing policy, and some of the problem issues that remain.

The costly, and often lengthy, initial and continuation training makes retention of trained personnel a major objective of any conditions of service consideration. Although a sense of patriotism, service and adventure still play a part, the constant demand to attract adequate numbers of suitable recruits from an increasingly sophisticated population requires the frequent review of realistic incentives. Standards in the Armed Forces are high (81.8 per cent of applicants were rejected in 1996-97)(1) and despite continuing high unemployment levels the labour market remains in many areas highly competitive.

In some ways the title of this paper is a misnomer in that it deals not only with 'conditions of service'. Conditions of Service are the entitlements which members of the Armed Forces can draw upon from time to time, such as pay, allowances, accommodation and compensation, whereas the paper also covers such things as child care and education assistance which are more accurately termed 'conditions of employment'. The ADF, as a responsible employer, provides assistance in these areas for two reasons: first, because its main concern is operational efficiency, and Service personnel will be more effective soldiers if these areas of their lives are secure. Secondly, to attract and retain the more capable young people in society it must keep up with changing lifestyles and social requirements. People will only take on the burden of Service life if certain needs are met. Indeed, such are the expectations that young people bring to their jobs that the grey area between conditions of service and these 'conditions of employment' is becoming even more blurred, with assistance in an increasing number of areas necessary if the ADF is to attract and retain happy, efficient personnel.

------------------------

The genderless term 'member' will be used throughout to describe regular servicemen and servicewomen of all ranks and Services. With a few exceptions only Army ranks will be used in this paper. These also refer to equivalent ranks in the Navy and Air Force; use Appendix A as a guide if needed.

Conditions for the Reserves are not covered in this paper. In general terms, however, Reserve remuneration is a fixed proportion of the regular Defence Force rate, and where Reserve members serve under the same conditions as Regulars, regular provisions generally prevail. The paper also says nothing about the civilians who make up the Department of Defence and whose experience and expertise is essential to a well-run Defence Force.

Some Demographic Details

There are currently about 57 200 members in the Australian Defence Force (ADF), of whom 12 600 are officers, including 1660 officer trainees. About 7700 are women. Approximate numbers in individual services are as follows:

Navy 14 700 (2850 officers; 240 officer trainees)
Army 25 880 (4460 officers; 740 officer trainees)
Air Force 16 630 (3620 officers; 580 officer trainees)

The average age of members is 30 with more than 30 600 under this age. 26 743 members, or slightly less than half the force, are married. At present the average length of service is 11.6 years for officers and 9.6 years for other ranks. Retention of the longer serving, experienced and fully trained member, who is usually married, is seen as vital for the continuity of Defence Force expertise.

Essential Components of Conditions of Service

The single most important item is salary. A salary structure which recognises the nature of employment in the 'defence industry' must be able to attract and retain suitable young Australians. Essential components of a salary structure include compensation for arduous and dangerous situations, for long working hours, and for disabilities to families caused by Service life. Expenditure necessarily incurred as a result of Service requirements should be met in the first instance, or reimbursed. Facilities such as accommodation of acceptable standard must be provided. Assistance must be given to the member's family to meet legitimate needs, in acknowledgment of difficulties experienced. Provisions for transition to civilian life, recognising the member's disadvantage compared with those who have always pursued civilian careers, should be made. A retirement scheme tailored to the unique nature of Service careers is the final ingredient.

A Unique Institution

The question of the unique nature of the military is an important one, and was well expressed in the 'Cross Report', the Joint Committee report in 1988:

'Defence Force members are required to serve when, where and as required, often in the most hazardous circumstances. They must follow without question the directions of government, while at the same time demonstrating initiative and originality of thought in the execution of their duties. Hours can be long and irregular. There is no recourse to industrial action, and compensation for overtime is limited to a small, fixed-sum 'disability' allowance. Family moves are regular, sometimes seemingly random and frequently stressful. Demands made on members of the ADF are not limited to the contribution the Force makes to regional stability, the law and order of the nation and the maintenance of national prosperity and trade. During emergencies such as bushfires, cyclones and similar national disasters, it is the ADF to whom the community turns for a vital proportion of the support effort. The ethos of service remains paramount'.(2)

Graham Glenn, in his 1995 report Serving Australia, emphasised other unique aspects:

Those who join the Services make a professional commitment quite unlike any other. They undertake to maintain the security, values and standards of the nation against external threat. They train for the application of extreme violence in a controlled and humane fashion, whilst accepting the risk of serious injury or death in achievement of the mission....In short they undertake to train for and, if required, undertake duty beyond the bounds of normal human behaviour(3).

This uniqueness tends to lose its sharpness, at least in society's mind, during a long spell of peace, and some would claim that the major threat to Service life is the steady move towards conditions which fail to reflect and properly compensate this uniqueness, and tend to place military personnel gradually closer to the public servant. Certainly there have been examples of this, but it must also be recognised that the Defence Force is not totally unique, to be treated in isolation. It is ironic that some of the worst discontent in the 1980s was due not to the Defence Force moving closer to the public service and the rest of society, but to the failure of Defence facilities and institutions to keep up with prevailing standards in society. Housing and barracks disrepair, and the wage freeze from 1982-83 are two examples. The danger has been that, in being treated differently, Defence personnel may be treated worse. Fortunately there appears to be increasing recognition by both political and military leaders that, assuming an effective Defence Force is essential to Australia's future (i) an important element of this effectiveness is a well-trained and generally contented membership (ii) this general contentment, which leads to retention of experienced personnel, can only be achieved if the ADF meets key community expectations.

The unique aspects create special needs, and it is important that these needs be defined and that appropriate institutions and rewards are in place to deal with them. Where Defence circumstances and roles parallel the civilian sector, members can expect to receive similar treatment. Superannuation was an example of an area of Service conditions where change was overdue and a move towards civilian standards unavoidable, but where the new scheme, the proposed Military Superannuation and Benefits Scheme (MSBS), both omitted the major defects of the old scheme and offered features unique to the ADF.

Some studies have expressed apprehension that the vision of a unique institution may be lost within the military itself. In their 1990 report 'Facing up to the Future',(4) Dr N. Jans and J. Frazer-Jans discussed the tendency for a greater emphasis on personal goals and values to clash with what have been traditional values of loyalty to the military institution and one's military career. They concluded that to counter the trend to regard the military as being like any other occupation, caused by over-emphasis on such things as the 'remuneration package', an extra effort is required to reinforce institutional values. In particular they recommended a revitalisation of leadership practices in the ADF, mainly by better training and longer spells by leaders in specific units.

Other Aspects of Service Life

Although very high professional standards are generally required, involving intensive training and dedication, for the majority of members the Defence Force is not a long term career. Although recently extended, statutory retiring ages are still lower than the civilian norm.(5) Other Rank servicemen and women in Army and Navy are required to serve for a minimum initial term of four years (for a non-technical specialisation) or six years (for a technical specialisation). The RAAF's initial minimum terms are three years and six years. After the initial term, there is 'open ended engagement', with the member free to continue service if he or she chooses.

Unlike public servants, members have had little or no protection in employment, and a career can depend on the international situation or government decisions, as illustrated by the May 1983 decision to disband the fixed-wing elements of the Fleet Air Arm, which made some 900 Naval postings redundant. Similarly the 1991 Force Structure Review reduced the ADF by around 11 000 members in five years; although the Review saw over 4000 civilian positions also disappear, and certainly public servants have lost some security of tenure recently. The intention with the 1997 Defence Efficiency Review (DER) recommendations is that military positions will be generally reallocated from support to combat and combat-related functions but it is certain that many ADF personnel will become redundant. In addition to this insecurity, employer-employee relations in the ADF can extend into most aspects of a member's life.

To balance some of the drawbacks, there are aspects of Service life which are attractive to many people. The ideal of worthwhile patriotic duty appeals to some; others seek adventure, comradeship, travel or a sense of belonging; operation of complex and deadly machines and weapons in scenes of legitimised violence is a common recruitment theme.

Longer term benefits include the opportunity to exercise real leadership and responsibility early in life; a large variety of job openings, some providing technical training and experience valued in civilian life; and avenues for personal development in a kind of uniformed welfare state.

The Posting Dilemma

The ADF is a numerically small military organisation by world standards but its units are dispersed throughout a large country. It is acknowledged that the process of posting personnel at regular intervals to a wide variety of locations across the country is a basic part of Service life, for such reasons as replacing people who leave, assisting career development, and providing specialised training to meet Service requirements. All of these posting reasons are necessary to establish and maintain the operational effectiveness of the ADF. As the RAAF Personnel Information Handbook states: 'The rotation of personnel through operational units and staff and training appointments is an essential requirement in the peacetime Defence Force'.(6)

The mobility of ADF members poses a number of problems, particularly for married members for whom economic considerations, and the importance of such things as spouse employment and dependants' education, produce an increasing need for geographic stability. As Graham Glenn states: 'Without doubt, the mobile life style of ADF families is the primary source of service related stress on families.'(7) Many of the matters discussed in this paper stem from the posting requirement.

The ADF has accepted the need to minimise posting turbulence. Following a review of posting policy in 1986-87, the Chief of the Defence Force (CDF) directed the Services to aim for a normal posting period of three years, and instructed that back-to-back postings be achieved where possible, with personnel staying in the one geographical location for two or more successive postings. In June 1993, CDF issued a posting Directive with the aim of reducing posting turbulence in the ADF. Major features of this policy again included a standard posting period of three years where possible; in addition, the retention of members in one geographic location for a minimum of four years was specified. Available figures indicate that, despite the CDF Directive, mobility remains high in the ADF. In financial year 1995-96, the ADF issued 30 222 postings amongst an average force strength of 57 965 i.e. 52 per cent of total strength, which is practically identical with the 1991-92 percentage, and similar to percentages in the interim years. In 1995-96, the majority of postings for each Service were two years or less.(8) The emphasis in the ADF towards sharp-end capabilities through such measures as the reduction in administration and base support, and the general shift to remote locations, suggests a move away from urban areas and more pressure on the Service family.

In their 1990 report Facing up to the Future, Dr N. Jans and J. Frazer-Jans borrowed from the Scandinavian example in recommending that a tax-free bonus of up to three months salary be offered to married members to encourage relocation by Service families to remote localities or unpopular areas(9). In 1995, Glenn proposed a 'Mobility Allowance', which he claimed would provide an incentive to relocate, assist with the turbulence experienced, such as disruption to schooling and spouse employment, and compensate for certain costs incurred. This concept is currently being developed within the Defence Personnel Executive.

Recent Trends

When the previous edition of this paper was written in December 1990, the ADF had spent several years fighting a losing battle to retain personnel. Separation figures had remained high since 1986, and prompted a report on personnel wastage by the Australian Parliament's Joint Committee on Foreign Affairs, Defence and Trade. Ironically the solution to the separation problem emerged some years later when the recession and high unemployment effectively slowed the exit from the Forces. The Joint Committee saw erosion of Service conditions as one of the significant factors in the increased separation rate, a conclusion which the ADF seems to have taken seriously. Whereas the 1980s saw several institutions e.g. the Defence Force Remuneration Tribunal and the Defence Housing Authority, set up to meet long-standing needs, the 1990s have seen detailed studies take place on specific aspects of Service life-housing, personnel without families, women in the Forces, child care etc. This has been an encouraging trend. As a generalisation, whereas traditional defence policy was rather to throw money at a problem, the present procedure is to hire an expert to examine the issues involved. One reason for this seems to have been the strategic decision that the ADF deploy to the north and west, and the realisation that the success of this deployment depended on proper support from personnel and their families.

Nevertheless it does seem that comparatively high wastage figures, at least among skilled personnel, will continue to be a problem. This need not necessarily indicate discontent with the Forces so much as a conforming to the changing standards of Australian society; for example, the tendency for young people to change jobs much more frequently than in the past. Also the ADF's posting requirements conflict sharply with some current values, e.g. the demands for geographical stability in one's home, educational opportunities for dependants, and careers for spouses. As Dr Jans wrote in 1990, such factors 'decrease the probability of the selfless, long term service which the military has come to expect and plan for'.(10)

Among the many recommendations in the Jans Report, one particularly relevant to a paper on conditions of service is the proposal to extend to members 'committal bonuses' i.e. payments made in return for a commitment to serve for at least a further period. Thus it is advocated that for 'other ranks' in select categories, two committal bonuses be paid, one at five years and one at 10 years, the amount being equivalent to four months pay, or six months pay for the most valued categories, both tax free. All officers should be offered a similar bonus after 10 years. The Jans Report argues that, in the long term, such investment would prove economical in training and in administrative posting costs.(11)

The Glenn Report

The previous edition of this paper, in 1990, made extensive use of the Cross Report. This present edition draws on the Glenn Report, the report Serving Australia: the Australian Defence Force in the Twenty First Century by Graham Glenn, released in December 1995. Glenn's summary list of his 120 recommendations are included at Appendix D. A good summary of his findings is perhaps contained in the following seven 'consistently recurring themes' which emerged from his contacts with members:(12)

  • there is a very strong desire for increased locational stability to reduce the impact upon spouse careers and employment, children's education, and access to services, particularly child minding
  • members want far more predictability in their careers so that they can make reasonable plans
  • there is a strong desire to have far more choice, equity and discretion in personnel policy
  • many members want more flexible work practices to cater for their changing life styles
  • members want to be able to compete on merit and equal opportunity, and be fairly rewarded in accordance with the value of their contribution
  • members at all levels want to see a professional approach to personnel management with some tangible demonstrations that people are the ADF's most valuable asset; and
  • as evidence of the importance of people in the ADF, members (and indeed many interest groups) wish to see personnel staff receive better preparation and training for their duties.

Following this list, Glenn provides balance and focus with this reminder:

...it needs to be understood that the ADF exists solely to perform its mission. The ADF does not exist to meet the needs of its members. In holding to the view that the interests of people are central to organisational outcomes, we are not being altogether altruistic; we are simply pointing out that it is in the ADF's interests to achieve its objectives (in part) through looking to the interests of its people.(13)

In making his proposals, Glenn, of course, was not burdened with the responsibility for providing the resources to implement them. Nevertheless, the Glenn Report is a stimulating study, and it would be unfortunate if political considerations consigned it to a shelf. It is encouraging that later reviews seem to be picking up and promoting many of his themes.

The Defence Efficiency Review

The Defence Efficiency Review (DER) was established in October 1996 with an overall aim of making recommendations for reform of Defence management and financial processes, and the report was published in March 1997. Its main effect on personnel issues was in personnel administration. The creation of a single Defence Personnel Executive from 1 July 1997 will generate savings by coordinating a number of personnel management functions previously distributed between the three Services and ADF Headquarters (HQADF). For example, a Defence Health Service has been formed from the existing health and related staffs of current Service and civilian Programs and this Health Service has become part of the Defence Personnel Executive Program. Savings from this health initiative should lead to reductions in personnel, compensation, facilities and materiel costs and are estimated to be $23 million per annum.(14)

In April 1997, the Defence Minister, Ian McLachlan, announced the Defence Reform Program (DRP), a plan to put the 70 findings and recommendations of the DER into effect. And in September 1997, he made a further statement to Parliament outlining DRP progress and anticipated outcomes.

Specific DER recommendations will be mentioned at relevant points in the paper, but another result of the DER for personnel generally is a possible move away from the traditional paternalistic relationship between the organisation and the member, which has seen the ADF take the responsibility for career development and the provision of virtually all needs e.g. housing, education, health.(15) In future, greater choice and responsibility could be given to members in meeting their housing needs and maintaining health standards. However, it is likely change here will be subtle rather than radical. While Service families do not expect a paternalistic meeting of every need, they will continue to want intelligently directed support in many areas.

The DER Report was published in two volumes: first, the Report proper, consisting of views accepted by the Review Panel. Throughout this paper, this volume will be referred to as the DER Report. The second volume was the Secretariat Papers, an addendum to the Report, consisting of advisory material only. This volume will be referred to as the DER Secretariat Papers.

Endnotes

  1. For 1996-97, inquiries were 92 599; applications 24 254; enlistments 4412.
  2. Australia Parliament. Joint Committee on Foreign Affairs, Defence and Trade. Personnel wastage in the Australian Defence Force-Report and Recommendations. November, 1988, p. 5. Throughout this paper, this report will be referred to as the Cross Report, after the chairman of the Defence Sub-Committee responsible, Manfred D. Cross
  3. Glenn, G. Serving Australia: the Australian Defence Force in the Twenty First Century. Canberra, 1995, p. 61. Throughout this paper, this report will be referred to as the Glenn Report.
  4. JANS, N.A. & Fraser-Jans, J. Facing up to the Future, Department of Defence, 1990. Throughout this paper, this report will be referred to as the Jans Report.
  5. See Chapter 14.
  6. RAAF Personnel Information Handbook, June 1990, p. 16.
  7. Glenn Report, p. 143.
  8. Australian Senate. Foreign Affairs, Defence and Trade Legislation Committee. Examination of Budget Estimates 1997-98. Defence Portfolio. Additional Information Received, Volume 1, September 1997, p. 186.
  9. Jans Report, p. 74.
  10. ibid. p.47.
  11. ibid. p. 63.
  12. Glenn Report, p. 201.
  13. ibid, p. 202.
  14. Future Directions for the Management of Australia's Defence. Addendum to the Report of the Defence Efficiency Review. Secretariat Papers. Canberra, 1997, p. 278.
  15. Future Directions for the Management of Australia's Defence. Report of the Defence Efficiency Review. Canberra, 1997, p. 48.

Chapter 2: Trends in the Defence Budget and their Implications for Conditions of Service

This chapter is intended to provide a background to the discussion of specific issues of Service pay and conditions. Obviously, the extent to which these issues can be addressed, when responses to them have financial implications, is determined by the amount the Government is prepared to devote to defence and by the priorities for expenditure within that amount.

A summary is given of the restriction of defence spending over the last ten years and the efforts of the Department of Defence to identify management efficiencies which would release funds to allow initiatives identified in various White Papers to proceed. The characteristics of these efficiencies have been the sale or corporatisation of Defence shipyards and factories, a number of tasks previously performed by the Services or Defence civilians being contracted-out, and reductions in the numbers of ADF and civilian personnel. Between 1984 and the early years of the 21st Century, Defence will have reduced staffing by more than 39 000 Service and civilian positions and gained savings perhaps approaching $1.5 billion.

To date, the majority of funds freed by management efficiencies have gone to improving pay and allowances. For instance, 75 per cent of the $450 million released by the Force Structure Review, between 1991 and June 1996, has been used to improve Service and civilian salaries and allowances. However, this was a trend running against policy, which was to use the majority of the savings for equipment and to improve Service capabilities. The cost of introducing currently planned additions to ADF equipment, the pending retirement of significant numbers of expensive equipments from about 2007 and the need to improve identified deficiencies in ADF capabilities, indicates that there may not be as much capacity to improve Service pay and conditions in future Defence Budgets as there has been in the past seven years.

A History of Restrictions on the Size of the Defence Budget

In promoting the 1987 Defence White Paper The Defence of Australia (DoA87), the (then) Defence Minister, Kim Beazley, argued that the traditional basis of the politics of defence was, henceforth, dead. This had been the cry that government should spend more on defence in response to any perceived shortcoming, and particularly, the claim that the Party which promised to spend more on defence had the better policy. Now, Beazley argued, the development of defence policy had been given a logical structure in DoA87, which would transform the argument from one of how much was being appropriated into that of how well defence funds were being managed to achieve objectives.(1)

The view of the then Minister was to prove a correct interpretation politically, in that the major parties did not thereafter contest defence policies on the basis of which would spend the most, but it proved to be incomplete. Although Minister Beazley hinted that defence objectives could now be obtained without substantial increases in expenditure, DoA87 predicated that the developments it foreshadowed were based on the defence function being funded at a rate 'generally within the order of 2.6 per cent to 3.0 per cent of GDP'.(2) In reality, however, the defence budget was one of those areas which was required to contribute to the tightening of Commonwealth fiscal policy in the aftermath of (then) Treasurer Keating's warning that the circumstances of Australia's balance of payments placed the country at risk of becoming a 'banana republic'. As can be seen from Table 1, in the financial year immediately following the release of DoA87 the proportion of GDP allocated to defence was reduced from the 2.5 to 2.6 per cent which had prevailed since the beginning of the decade, to 2.3 per cent and (in general) has thereafter been reduced further.

Indeed, only four years later, the Force Structure Review 1991 (FSR) reported that there had been no real growth, on average, in the defence budget since the release of DoA87 and concluded that continuing the defence budget at this level of allocation would mean that only three-quarters of the planning in DoA87 could be implemented over the next decade. If, instead, defence funding was cut by an average of one per cent, only half of the plans could be implemented.(3) The significant financial management problem cited was that the commitment to pay for equipment which had already been approved was the highest ever incurred by the Department of Defence and that, at current levels of funding, this left little capacity to handle competing priorities, such as military salaries, in coming years. The response embodied in the FSR was to implement a series of management efficiencies, staff reductions and the commercialisation of some functions, to allow Defence to broadly achieve its planning objectives with stable (no real increase) funding.

The current difficulty for defence management is that, instead of staying stable, funding has instead fallen in real terms. From 1989-90 the Defence Budget has been held constant or reduced in real terms with the effect that the 1996-97 budget was 2.23 per cent less, in real terms, than that of 1988-89.(4) By 1994, the White Paper Defending Australia (DA94) was saying that continuing management efficiencies could support the development of military capabilities only until the last few years of the decade. After that, and throughout the first decade of the 21st Century, real growth in defence funding, sufficient to hold Defence Outlay at a level of about 2 per cent of GDP, would be required.(5) The demand for additional funds would be driven initially by conflict between the costs of new equipment programs and those of improvements in personnel remuneration (with the latter expected to absorb most of the gains of management efficiencies). However, from around 2007, most of the funding pressures would be generated by the impending retirement of large sections of the Australian Defence Force's most expensive types of equipment at about the same time, a circumstance referred to as 'bloc obsolescence'.

Any increase in defence funding is not yet in prospect. The Government came to power promising to retain defence spending at the levels planned by its predecessor. This was for real reductions of 0.5 per cent in 1995-96 and 1996-97 and for the real level of funding then to be held constant until the turn of the century. Although he personally supported funding real increases in Defence Outlay, the incoming Minister, Ian McLachlan, was quick to emphasise that, nonetheless, there would be no possibility of any increase in defence spending during the forthcoming three years.(6) The Government's approach has been to further pursue management efficiencies within Defence, funding the development of ADF capabilities into the beginning of the next century, but also to provide an exemplar to support the argument for an increased defence budget early in the 2000s.

The Government's Program of Management Efficiencies

After the early implementation of an election policy to transfer $125 million from administration to the development of ADF capabilities, the Minister proceeded to a full scale overhaul of defence management with the DER. As noted above, the DER proposed many changes in the organisation and work of ADF and Defence staff most of which are now being implemented under the title of the Defence Reform Program (DRP). The objective of the DRP is, once again, to improve the efficiency of defence function management so that further funds can be released to allow the improvement of capabilities in the ADF's combat forces. In this regard the DER reported that its recommendations could result in one-off savings, expected to reach $500 million (mostly through the sale of Defence properties), and further recurrent savings, currently estimated to release $900 million and, perhaps, more than $1 billion.(7) These economies are in addition to the estimates that a range of associated efficiency programs, set in place by the FSR process,(8) had generated recurrent annual savings of $450 million by June 1996,(9) which would reach $530 million by 1999-2000.(10)

The salient characteristic of these attempts to reallocate funds within the Defence portfolio has been the significant reduction of personnel numbers. Under the FSR process, 16 210 ADF and civilian positions were removed between June 1991 and June 1996.(11) The DER estimated that its recommendations would lead to the reduction of a further 7800 ADF and civilian positions, although the Government will relocate 'at least' 2000 Service personnel to positions in the combat force.(12) Significant reductions in Defence staffing are not just a product of 1990s style searches for management efficiency, however. In the previous six year period, between June 1984 and June 1990, Defence personnel numbers fell by over 17 900, most of them (over 14 600) being civilians.(13) This movement was due to (mostly) a change of function, as dockyards, munitions factories and other Defence production facilities were privatised or corporatised and the responsibility for funding their staff was removed from the defence budget.

The principle effect of this history of management efficiencies and cost cutting is that the ADF is becoming a comparatively small force. The Chief of the Defence Force, General John Baker, has predicted that by the turn of the century the ADF will number 'about 50 000'.(14) At the end of 1980-81 there were 72 520 in the ADF and the latest figure is 57 423, as at 31 March 1997. This significant reduction in numbers represents a refocussing of ADF activities on combat and essential technical support areas, with reductions of uniformed members employed in non-combat related support areas such as administration.

The lesser numbers of ADF personnel is also a reflection of developments in military technology, where the increased capability of systems tends to reduce the requirements for military personnel in important areas of capability. For example, the Collins Class submarine requires half the crew of its predecessor. However, as a consequence, the levels of skill required to operate these systems have increased and defence management has recognised that this factor would be 'reflected in expectations for remuneration and other things in personnel costs in the future'.(15) It could also be expected that, as these changes take effect, a higher proportion of Service personnel will be entitled to combat-related allowances, in addition to any change in their base rate of pay.

Limited Prospects for Improved Salaries and Conditions

Indeed, the Minister has said that a proportion of the DRP savings would go to improving the remuneration of those personnel who were retained in the restructured organisation. This would not be a new process for Defence. In fact, the majority of the savings made under the FSR process have been utilised in improving wages and conditions of Defence civilian and Service personnel. A move towards productivity based pay increases in the Australian Public Service in the 1990s, with government agencies largely being expected to fund pay rises from within existing budget appropriations, was also applied to Defence and has meant that over recent years the Department has allocated $340 million per annum from within its Budget to pay for increases in salaries and allowances.(16) This is an amount equal to 75 per cent of the savings generated by the FSR process at the end of 1995-96.

The current projected loss of ADF positions as a result of the DRP is about 2700, which would reduce the Services to a total of some 54 700 positions. (General Baker's figure of around 50 000 may be an estimate of the impact of the proposal to further test which defence functions can be performed under contract by the commercial sector of the Australian economy.) A simple mathematical calculation indicates that a reduction of ADF personnel of 2700 will save over $153 million at the level of allocation proposed in the 1997-98 Estimates, which would represent a transfer of an additional 4.9 per cent to the remuneration costs of remaining Service personnel. This is not the same as a 4.9 per cent pay increase, as total personnel costs include charges which do not pass to individuals in fortnightly payments, such as superannuation, intermittent allowances, notional loadings for staff absences and so on. Defence has calculated that each one per cent rise in base salaries and wages for the ADF and for Defence civilians as the result of any productivity bargain will cost the Defence Budget $40 million,(17) which indicates that an ADF salary increase of about 3.8 per cent is the maximum which could be funded on the basis of currently known DRP proposals.

So, despite the large size of the projected DRP savings, it is not likely that these will presage a significant increase in ADF pay and allowances. The justification for the DRP was the need to identify significant amounts within the budget that could be diverted to ADF combat elements, paying for equipment programs in response to the looming bloc obsolescence problem. A need to fund forthcoming equipment programs has been the central objective of defence planning and reform programs since the publication of the 1976 white paper,(18) but none of the plans have made the objective any easier to obtain. Despite the savings of the FSR process and the continuous reduction of employment within Defence throughout the 1980s and 1990s, the Minister has said that 'the Defence Organisation was potentially facing a severe budget crisis ... after the turn of the century ... (and) drifting toward a point where the only choice was to cut capability.'(19)

Defence already expects to pay an additional $135 million from within its budget as an outcome of a current review of ADF personnel and housing and accommodation policies. The need to restrain any untoward expansion of Defence personnel costs has been further emphasised by differences in the dynamics of capital and labour price movements. Defence claims that analysis of its own experience has shown that the cost of the major capital equipment it purchases has increased at a rate of 4 per cent per annum in real terms.(20) Since 1985 there have been few years when the cost of labour, as measured by Average Weekly Ordinary Time Earnings (AWOTE), has exceeded inflation (measured by the Consumer Price Index) by more than a few percentage points.(21). The implication is that, for most of the past decade, it has been more difficult to keep abreast of capital funding requirements than those for remunerating personnel. Yet, to date, comparatively little of the funding released by management efficiencies has gone to other than personnel costs.

However, during 1996-97 AWOTE increased by 3.5 per cent, while the CPI increased by only 0.4 percentage points. It is difficult to know for how long wages growth will continue to run ahead of inflation and the comparability of income data is becoming more difficult as awards and conditions are simplified, leading to variations in the nature of labour cost data. The occurrence of a negative CPI for the year to September 1997 can only confuse the prospects for predicting prospective wages growth. Continuing low expectations of inflation may lead to negligible demands for salary increases from the ADF, whereas significant claims for catch-up increases could lead to Defence outlaying more for personnel costs than is generally being granted by other large organisations.

Although stating its commitment to improved wages and conditions for its personnel, the most pressing current financial priority of Defence is to fund the operating costs of high priority equipment programs currently under development and for which no allocation has been provided, as of now, in forward financial planning. These programs, which include Airborne Early Warning and Control aircraft and helicopters for the ANZAC Class frigates and Offshore Patrol Combatants, may cost an additional $360 million per annum when fully operational.(22) Such ongoing operational costs (that is, independent of the cost of acquiring the equipment) are in addition to the funding needed to overcome pressures effecting the logistics support and training required by the Services. Further, Defence must find the budgetary means to bring these capabilities into service before, in about ten years time, it looks for finance to address the bloc obsolescence problem (a general rule of thumb in military procurement is that it takes about ten years to introduce a new capability into service).

Analysis of Table 1 indicates that the current proportion of total Defence Expenditure allocated to Service and civilian personnel costs is well above the median point for the last 17 years, although in most cases the variations are small. This conclusion is not apparent from the table itself, which presents the official data. However, as explained in the box following Table 1, on page 18, there is a disjuncture in the series of annual proportions of total Expenditure, and therefore percentages for wages and salaries in financial years before 1992-93 are not comparable with current figures. After adjusting the proportions for earlier years by the percentage point variations as described on page 18, it appears likely that one would have to go back to 1983-84 to find a higher proportion of expenditure spent on personnel costs than the expected outcome for 1996-97 and the estimate for 1997-98.

Similarly, the current proportion of Expenditure allocated to new capital equipment is slightly below the median point. Although variations are mostly small, the 23.3 per cent of Outlay estimated to be spent on equipment in 1997-98 is well below the almost 30 per cent which was the proportion allocated in 1986-87 (allowing for revision of the data). Given the clear objective of the DRP to provide funding to overcome capability shortfalls and to address the bloc obsolescence problem, the proportion of Expenditure allocated to equipment must rise significantly in coming years. Correspondingly, this will see a fall in the proportion, of a fixed budget, which can be allocated to Service personnel costs. For reasons such as these, it is unlikely that the shape of future Defence Budgets will support a significant increase in the salaries and conditions of ADF personnel.

Table 1: Defence Expenditure 1981-1998

Financial Year

Defence Function Outlay $million

Defence Outlay As % of GDP

Total Personnel Costs $million

Total Personnel Costs As % of Defence Expenditure

ADF Salary and Allowances As % of Defence Expenditure

New Capital Equipment Costs As % of Defence Expenditure

1980-81

3492

2.5

1816

49.6

32.5

16.0

1981-82

3886

2.6

2311

54.2

36.7

12.5

1982-83

4501

2.6

2466

49.9

33.0

17.4

1983-84

5056

2.6

2576

46.5

30.1

22.1

1984-85

5657

2.6

2721

43.7

28.0

25.9

1985-86

6333

2.6

3025

43.4

27.9

26.4

1986-87

6823

2.6

3091

40.8

26.5

25.7

1987-88

6967

2.6

3333

40.9

27.6

27.1

1988-89

7295

2.3

3534

43.3

27.7

21.8

1989-90

9913

2.1

3697

41.5

26.5

21.4

1990-91

8480

2.2

3877

40.8

25.8

22.6

1991-92

8731

2.4

4080

41.5

25.9

22.6

1992-93

9158

2.4

3456

34.3

26.1

23.4

1993-94*

9746

2.3

3917

38.0

29.2

22.8

1994-95

9731

2.1

3810

36.9

28.4

23.1

1995-96

10 011

2.1

4007

37.8

29.1

22.5

1996-97

10 003

2.0

4156

39.1

30.2

22.3

1997-98

10 405

1.9

4239

38.7

29.0

23.3

Notes:

  1. Sources: Defence Report, various years from 1982-83.
  2. Most of the columns in the table are based on defence expenditure. The first column shows defence outlay, which is expenditure minus revenue.
  3. Portfolio Budget Statements 1997-98, Defence Portfolio Section 33 'Details of Major Appropriation Groupings', pp. 158-159. 1996-97 data is for forecast outcomes, that for 1997-98 is the budget estimate.
  4. Figures for 1996-97 and 1997-98 are estimates based on calculated figures for GDP derived from 1997-98 Budget Paper No. 1, Table E1, p. 2-63.
*Figures for 'Defence Outlay' and 'Defence Outlays as % of GDP' for the years 1981-82 to 1993-94 are from Table L.1, Defence Report 1993-94, p. 322. This table substantially revised the figures previously given for the Financial Years 1981-82 to 1992-93, to reflect the decision taken in the 1993-94 Budget to remove superannuation contributions and refunds from the Defence Function Outlay. This makes the earlier figures consistent with those for Outlays post 1993. Adjustments for 1981-82 and for Personnel, ADF Salaries and Equipment expenditures as a proportion of Total Defence Expenditure for the years 1982-83 to 1991-92, are not available. In general, the adjustment appears to have resulted in 'Total Personnel Expenditure' declining as a proportion of 'Total Expenditure' by about 5 percentage points (39.4 per cent down to 34.3 per cent in the adjustment of 1992-93 Budget Outcome), reflecting the removal of the superannuation component from this appropriation grouping. Conversely, expenditure on 'ADF Salaries and Allowances' and 'New Capital Equipment Costs' increases as a proportion of total Expenditure (24 per cent up to 26.1 per cent and 21.6 per cent up to 23.4 per cent, respectively, in the adjustment), reflecting the decline in the size of Total Defence Expenditure as a result of removing superannuation.

Endnotes

  1. The Hon Kim C Beazley, MP, Minister for Defence, 'After the White Paper-The Challenge of Management', Address to the National Press Club, Canberra, 25 March 1987, p.6ff.
  2. Department of Defence, The Defence of Australia 1987, AGPS, Canberra, 1987, p.112.
  3. Department of Defence, Force Structure Review 1991, AGPS, Canberra, 1991, p.3.
  4. DER Secretariat Papers, p.17.
  5. Department of Defence, Defending Australia, AGPS, Canberra, 1994, p.146ff.
  6. The Hon Ian McLachlan, AO, MP, Minister for Defence, 'Australian Defence Policy After the Year 2000', address to conference The New Security Agenda in the Asia-Pacific Region, Canberra, 3 May 1966, in Defender, Winter 1996, p.7.
  7. The Hon Ian McLachlan, AO, MP, Minister for Defence, Ministerial Statement, 'The Defence Reform Program', 30 September 1997, pp. 4-5.
  8. As part of the FSR, a number of initiatives to improve the management of defence activities were established. These included the Commercial Support Program, the Defence Regional Support Review, the Defence Logistics Redevelopment Project , the Supply Systems Redevelopment Project and the Financial Systems Redevelopment Project which included concepts subsequently approved by the DER, such as nationally organised systems, expanded single Service management for common ADF functions and devolved authority for categories of purchasing.
  9. Department of Defence, 'Defence submission to the Joint Standing Committee on Foreign Affairs, Defence and Trade, Inquiry into the level of funding required for the defence of Australia', in JSCFADT, Defence Sub-Committee, Submissions, Volume 1, Canberra, July 1997, p. 286.
  10. DER Secretariat Papers, p.18.
  11. JSCFADT, Defence Sub-Committee, Submissions, Volume 1, loc.cit.
  12. The Hon Ian McLachlan, The Defence Reform Program, p.5.
  13. Defence Report 1983-84, 'Functional distribution of Defence manpower at 30 June 1984', p.112, and Defence Report 1989-90, Table C, p.8.
  14. John Baker, 'Rethink will spotlight future security', The Australian, 20 June 1997.
  15. JSCFADT, Defence Sub-Committee, Transcript, 4 August 1997, p.9.
  16. JSCFADT, Defence Sub-Committee, Submissions, Volume 1, p.285.
  17. ibid., p.288.
  18. Department of Defence, Australian Defence, AGPS, 1976, p.59.
  19. The Hon Ian McLachlan, The Defence Reform Program, p.2.
  20. JSCFADT, Defence Sub-Committee, Submissions, Volume 1, p.287.
  21. Australian Industrial Relations Commission, Safety Net Review-Wages, April 1997, Table 9, p.51.
  22. JSCFADT, Defence Sub-Committee, Submissions, Volume 1, p.287.

Chapter 3: Regulation of Service Conditions

Policy Development

Most of this chapter will deal with the regulation of financial conditions of service, but it is important first to summarise the procedure by which policy on Service conditions is developed.

As a result of the Defence Reform Program, significant structural changes have recently taken place in the Defence Department's personnel activity. On 1 July 1997, an integrated organisation, the Defence Personnel Executive, was formed. This encompasses the former Headquarters ADF personnel area, the single Services personnel functions, the Department's civilian personnel area, together with some other activities such as Service and civilian health programs.

Proposals can originate from many points-internal committee reports, external reports such as Glenn's Serving Australia, or from sections within Defence. But traditionally the principal sources of initiatives, and the areas where proposals have been prepared for further consideration, have been the Service Conditions Sections of the individual Services offices and, more particularly, the Personnel Division within Defence Headquarters. Personnel Division is divided into the Pay and Conditions Branch, dealing with financial matters, and Personnel Policy and Plans Branch and the Defence Community Organisation, both dealing with non-financial matters. After initial development by the staff in these areas, traditionally a proposal would be presented to what was for years called the Defence Force Personnel Policy Committee (DFPPC), but which in June 1996, following a recommendation of the Glenn Committee, was renamed the Defence Personnel Committee. The Committee has traditionally comprised:


Chairman:    Assistant Chief of the Defence Force - Personnel

Members: Assistant Chief of the Naval Staff - Personnel Assistant Chief of the General Staff - Personnel Assistant Chief of the Air Staff - Personnel First Assistant Secretary Human Resources

The Director General Services Conditions (DGSC) and the Director General Service Personnel Policy (DGSPP) were permanently invited members.

With the introduction of the Defence Reform Program, the positions of several members of the Committee were abolished, and the Defence Personnel Executive has yet to finalise future arrangements for personnel policy.

The function of the Committee has been to consider and accord priority to major ADF pay and personnel policy matters for endorsement by the Minister, or for submission to the Defence Force Remuneration Tribunal (DFRT) and the Department of Industrial Relations (now Department of Workplace Relations and Small Business) as appropriate.

After endorsement by the DFPPC the policies were developed by DGSC and DGSPP. Part of the development process has involved negotiations with the then Department of Industrial Relations (DIR). DIR, in considering its position, might discuss the proposal with other areas such as Department of Finance, Department of Veterans' Affairs and the Taxation Office.

The final step is still the same. Pay and pay-related allowances covered by Section 58H of the Defence Act are then submitted to the DFRT, while non-pay related allowances and other matters covered by Section 58B of the Defence Act are submitted to the Department of Workplace Relations and Small Business, (DWR&SB).

Regulation of Financial Conditions

This subject will be dealt with in three parts; the system operating prior to 1985; the present system, centering on the DFRT; and current matters at issue within the system.

1. Previous Pay-Fixing System

Kerr/Woodward

From 1947 to 1985, Service pay and allowances were under the control of standing Departmental committees, with ad hoc external advisory committees established from time to time. The most important of these, the Kerr/Woodward Committee of Inquiry, which was appointed in 1970, produced seven reports on formal conditions of service during the period 1970 to 1973. These introduced much-needed principles to govern subsequent deliberations, as well as reforming the structure of Service pay. For example, the traditional complex daily rate of pay was replaced with a civilian-style salary structure, including a Service Allowance to compensate for the disabilities of Service life, with a major component being payment in lieu of overtime. The system of numerous trade skill margins was replaced by six broad-banded pay levels ranging from unskilled to technicians. This broad-banded wage structure was, in fact, far in advance of the prevailing civilian wages systems, with their untidy multiplicity of awards and relativities, and formed the basis for the broad-banded system in place today.

The Committee of Reference for Defence Force Pay

The Committee of Reference for Defence Force Pay (COR) was formed in 1973 following a recommendation of the Kerr/Woodward Committee to establish independent standing machinery to deal with conditions of service. The most significant work of the COR, headed by Justice Coldham, a Deputy President of the Conciliation and Arbitration Commission, were the four reports, 'Adequacy of Defence Force Remuneration', produced between October 1980 and August 1982.

The COR mechanism suffered from severe deficiencies:

  • The Committee had no authority to initiate investigations; the system operated only when the Government felt like bringing it into action. One unfortunate consequence of this lack of authority was seen in the early 1980s. In its fourth and final report, in August 1982, the COR noted that:
    'There is a need for ongoing review. We have discerned an expectation in the Services that future reviews should be carried out with dispatch. We believe that reviews should be held at periods of not more than 12 months and that a major review is required from time to time at somewhat longer periods'.(1)
    Mindful of the current consideration in the community of developments in wage restraint, the COR added this warning:
    'Before any centralised system of wage fixation re-emerges to influence salaries in the Defence Force, it is essential that those salaries be reviewed and be correctly set against proper community standards'.(2)
    As it happened, the wage pause legislation received assent on 23 December 1982, and the Defence Force received no general salary increase until October 1983, when the wage pause was lifted, and the National Wage decision for a 4.3 per cent pay rise was passed on to the Defence Force. Another review of ADF salaries was not made until September 1985, when the DFRT made a determination after considering the whole period 1981-1985.
  • The Government retained the power to determine the terms of reference of any inquiry which the COR might undertake.
  • If the Government did not like the result or found the recommendations of the Committee to be inconvenient, it could simply ignore the recommendations. It should be pointed out that generally the recommendations of the COR were accepted by Government and subsequently implemented.
  • There were also procedural deficiencies in that the decision-making processes of the Committee were essentially private. The system lacked the checks against inaccuracy or error which adversarial proceedings provide, in that submissions and counter-submissions in adversarial proceedings are public and there is an opportunity to criticise and correct. In addition, being a committee, COR procedures did not facilitate the free exchange of information in the same way that a conference can.

2. Existing Pay-Fixing System: The DFRT

The Defence Legislation Amendment Act of 1984, which was assented to on 25 October 1984, established the Defence Force Remuneration Tribunal and the office of the Defence Force Advocate, defining the powers of each. The relevant sections of the Defence Act 1903, as amended by the 1984 legislation, are 58F to 58Q, with the functions of the Tribunal set out in section 58H. As the 1987 Defence White Paper notes: 'The establishment of a special tribunal for the Defence Force both recognises the special aspects of military service and acknowledges the convergence that has occurred between military and civilian employment. These arrangements better integrate the Defence Force into the industrial framework applying to the community at large.'(3) For the first time a body could determine pay and conditions rather than make a recommendation to the Minister.

The following appointments to the Tribunal were made on 22 February 1985: Mr Justice L.H. Williams, a Deputy President of the Australian Conciliation and Arbitration Commission, was appointed Chairman of the Tribunal; the other members were Mr A.S. Paine, a commissioner of the Conciliation and Arbitration Commission, and Rear Admiral N.E. McDonald AO RAN (Retd). Mr. D.M. Quick, Q.C., a barrister in industrial law and an officer in the Naval Reserve, was appointed Defence Force Advocate (DFA).

Principal Features

The following summary of the principal features of the Tribunal and functions of the Defence Force Advocate is taken largely from a paper by the first DFA, David Quick:(4)

  • The Tribunal consists of three members who are required to have specific qualifications which are appropriate. They are appointed on a part-time basis. They have tenure for a period up to five years and may be removed during that period only by act of the Governor-General and then only on grounds of misbehaviour or physical or mental incapacity. They can be reappointed for a second term.
  • The Tribunal has jurisdiction to inquire into and determine salaries and allowances in the nature of pay which are to be paid to members of the Defence Force. It may exercise that power of inquiry and determination of its own motion and from time to time. The legislation prescribes a maximum time between general reviews of salary and allowances of two years.
  • The Tribunal has a secondary jurisdiction which it may not exercise of its own motion but only on reference from the Minister or the Secretary of the Department or the Chief of the Defence Force. This jurisdiction enables the Tribunal to inquire into and make determinations with respect to matters other than salary and pay-related allowances e.g. a leave question could be referred to them.
  • The Tribunal is empowered to inform itself in such manner as it sees fit and is not bound by the rules of evidence. The relevant statutory provisions do not remove the requirements of the rules of Natural Justice. This means that the Commonwealth or the DFA have access to every communication of relevance made to the Tribunal.
  • The Defence Force Advocate and a person representing the Commonwealth are entitled to be present and to make submissions to the Tribunal during any proceedings before the Tribunal.
  • The determinations of the Tribunal have the force of law and any regulations or ministerial directions inconsistent with the Tribunal's determination are-to the extent of that inconsistency-of no effect.
  • The Tribunal is required, in making a determination, to have regard to such principles or decisions of the Australian Industrial Relations Commission as the Tribunal considers relevant. This means that the Tribunal will look at and consider Commission decisions without being bound to follow them. In practice the Tribunal has based its decisions on community processes of industrial relations determination, making due allowance for differences between the ADF and employer-employee relations generally.
  • From a determination of the Tribunal there is no appeal, strictly so-called. The legislation does however enable the Minister, the Secretary of the Department and the Chief of the Defence Force to request a reconsideration of any determination made by the Tribunal. A reconsideration by the Tribunal is an inquiry into the original subject matter again by the Tribunal.

It will be observed that the machinery of investigation and determination of rights is in many respects not unlike that which obtains in the Australian Industrial Relations Commission.(5)

A key feature of the Tribunal's functioning, the question of who represents the employees and who acts as employer, will be discussed later.

Defence Force Advocate

The legislatively defined functions of the Defence Force Advocate are:

  • to prepare submissions on behalf of the Defence Force concerning matters before the Tribunal
  • to represent the Defence Force before the Tribunal, and
  • to advise the Chief of the Defence Force in relation to matters within the limited secondary jurisdiction of the Tribunal.

The Defence Force Advocate has tenure for a period of three years from appointment or re-appointment and may be removed from office only by the Minister and then only on grounds of misbehaviour or physical or mental incapacity.

Advantages of the DFRT

David Quick summed up the most important features of the DFRT as follows:

  • There is now a public examination of the facts upon which Defence Force pay and allowances in the nature of pay are determined.
  • That examination is made by a tribunal which is independent of government.
  • The determination made by that tribunal binds government.
  • The Defence Force has full and free access to all submissions made to the Tribunal and a perfectly adequate opportunity to make submissions to the Tribunal through the Defence Force Advocate.

Present Membership of the DFRT

The present membership of the DFRT is as follows. The President (formerly Chairman) is Hon. Justice A.J. Boulton. Rear Admiral K.A. Doolan AO (Retd) was appointed in March 1996 for a period of three years, and Commissioner Patricia Leary was appointed in February 1995 for a period of four years.

The present Defence Force Advocate is Richard Kenzie, Q.C., who was appointed in June 1996 for a period of three years after having served as Acting Defence Force Advocate from September 1995.

Determinations Made

In the approximately eleven years since it began its work in 1985 until June 1996, the Tribunal has made 199 determinations, ranging from National Wage Case Applications applying to all Regular Service personnel, to determinations relating to Allowances or to Reserve personnel. Of these determinations, 89 have been made in the last three years.

3. Some Current Issues

The creation of the DFRT has been a welcome step forward, but the system is still not without its problems, the most obvious being the challenge of adjusting to the new workplace relations environment. Some of these problems, as will be seen later, relate to the advocacy roles i.e. who is employer and who represents the employees i.e. the ADF members, when bargaining is to be done. Recommendations made in both the Glenn Report and the Secretariat Papers to the DER have given new emphasis to these and other issues. At present, the Chief of the Defence Force (CDF) represents the ADF members and is responsible (through his departmental staff) for initiating remuneration claims; the Department of Workplace Relations and Small Business (formerly Department of Industrial Relations) is responsible for the employer's i.e. the Commonwealth's, case. A number of suggestions for change have been made over the years, but it is virtually impossible to avoid the problem of conflict of interest in the system, especially concerning the CDF's role.

1. Is the Tribunal appropriate for workplace bargaining?

When the Tribunal was established in 1985, collective bargaining, or, more accurately, payment in accordance with the award system, was the prevailing industrial relations system. Wages decisions, often conforming to the Prices and Incomes Accord and driven by market forces such as inflation, applied across industries including the whole public service, and formed the basis of the agreed decision determined by the Tribunal. The cost of pay increases was then supplemented by the Government. However in October 1991, the Australian Industrial Relations Commission introduced provision for enterprise bargaining i.e. the direct negotiation between the employer and the employees at an enterprise concerning wages, work practices etc. In this more decentralised wages system, pay increases are usually internally funded and can be linked to productivity and efficiency improvements at workplace level. In 1996 the Coalition Government took this procedure a step further with its new industrial relations legislation, the Workplace Relations Act 1996, which reduced the role of the trade unions in the setting of wages and conditions.

How appropriate is the Tribunal for workplace bargaining and for pay rises that will be self-funded? At first glance, it does seem that enterprise bargaining for the ADF would remove the capacity of the DFRT to arbitrate, and leave ADF pay setting as a process of bargaining with the Government's representative as employer. To what extent, then, should the Tribunal's procedures, and possibly responsibilities and powers, be changed to accord with the new arrangements? Before a decision is made on this, some factors should be considered:

  • Increasingly during the 1990s the Tribunal has been reflecting the new system by encouraging the parties to resolve matters relating to salaries and allowances by agreement. To this end the Tribunal has sought to ensure that there are discussions between the parties about matters that are the subject of application to the Tribunal. The Tribunal has also convened conferences of the parties to consider cases before the Tribunal and to endeavour to reach an agreed resolution or, at least, to define clearly points of disagreement. In much of its business the Tribunal acts as a forum, giving the parties guidance on what is happening in the community, and otherwise assisting them to reach an agreed position. Prior agreement has been reached in approximately 95 per cent of the matters dealt with by the Tribunal during the last two financial years. And even in the few cases which required Tribunal arbitration, substantial areas of the matters had been decided by prior agreement. This seems to contradict the statement given in the DER Secretariat Papers that 'the current formalised adversarial approaches before the Tribunal is not conducive to the achievement of bargaining agreements'.(6)
    Section 58KD of the Defence Act provides for the Tribunal giving effect to agreements reached between the parties, and, in accordance with this, there have already been several workplace agreements arrived at between the ADF and the Department of Workplace Relations and Small Business and then taken to the Tribunal for acceptance and certification. In December 1992, the DFRT handed down its first decision on an ADF wage package based on productivity-based remuneration, and there have now been three such agreements, all embodying an agreed position reached between the parties. Admittedly the apparent success of the process is not completely convincing; the Tribunal has very much followed on behind the APS negotiations, virtually duplicating the APS agreement. However, in June 1997 the ADF applied to the DFRT to begin the process of determining a new workplace-bargaining agreement, and this initiative, preceding any APS decision, should give a better test of the Tribunal.
  • A more fundamental question can be asked: Is enterprise and workplace bargaining suitable for a military force which (a) has no power to withdraw labour, and (b) no union structure? Since April 1994 there is legal immunity for protected action in civilian industrial relations. And although the union's role in the employer-employee relationship has been weakened, the bargaining capacities which unions provide are still available to most workers, and, indeed, will very likely prove useful to both employers and employees on occasion.
    Another unique characteristic of the ADF which militates against enterprise bargaining is the chain of command As Captain McGuire pointed out in an article on the subject:
    The concept of bargaining is foreign to a military ethos which is based on command and the implementation of Government policy for the protection and promotion of Australian security.(7)

    In return for the forces' adherence to the code of discipline, the command structure has the responsibility of looking after the welfare of the members. It is difficult enough for consultation and the communication upwards of points of view to feature in this formal chain of command; the requirements of enterprise bargaining seem totally inconsistent with it.

    It does seem, therefore, that somewhat different procedures will be necessary in defence industrial relations matters to enable the presentation of both points of view and ensure an outcome which can be regarded by both sides as fair. But this is not to say that in industrial relations matters the ADF should be treated differently from the rest of the community. The ADF's differences do not exclude it, as part of the community, from the values which currently provide the basis for industrial progress. For example, if civilian enterprises receive a pay rise based on savings in efficiency, there can be no automatic transferral of this result to the ADF. The onus is on the Defence Force to produce its own efficiency savings and productivity issues as justification for its pay claim. The differences between the ADF and the civilian community will lie in the procedures by which the employer-employee negotiations are conducted, not in the underlying values which govern the negotiations.

  • The Tribunal's 1995-96 Annual Report lists inspections and visits to ADF establishments and facilities 'as an important part of the Tribunal's work'. Not only do these visits allow the Tribunal members to keep informed on relevant issues, they also 'provide an opportunity for ADF members at all ranks to make representations directly to members of the Tribunal about the matters under consideration'. These visits seem to be the only means available to the ordinary ADF member, lacking a union facility, to achieve direct input into Tribunal determinations.
    On occasion, case proceedings are formally opened during the visit. As is stated in the 1995-96 Annual Report:
    The opening of cases at establishments and units allows ADF members who may be affected by such reviews to gain a better understanding of the impact of the reviews and the processes involved in the consideration and implementation of the changes.(8)

    Not only does this transparency help to break down the ADF's undoubted communication problems, letting the lower ranks know what is happening at the decision-making levels, but, regardless of the determination eventually made, it contributes to morale by reassuring all involved of the processes which govern the whole area of remuneration. It must be said, however, that these visits, however beneficial, cannot in themselves overcome the average member's general lack of input into negotiations for remuneration

  • In conclusion it should be pointed out that problems with enterprise bargaining in the ADF have come, not from the performance of the DFRT, but from:
    • The difficulty of determining who should form the bargaining units. This will be discussed later.
    • The difficulty of applying the concept of productivity, which in the ADF has been defined as 'improved capability'.(9) Certainly initiatives such as the Commercial Support Program have provided both improved capability and reduced costs, but generally improvements in capability and major redeployments are expensive (e.g. the current project cost of the Collins Class Submarines is $4.988 billion, and the move of the Army to Darwin is a costly program). Too often recently, Command seems to have taken the easy way out in achieving savings i.e. by cutting personnel numbers, attempting to 'do more with less'. This leads to longer hours worked, and confusion and frustration with the system. In any case, this expedient has definite limits.

2. The problem of who is the employer and who represents ADF members

The Cross Sub-Committee in 1988 saw the role of the CDF as a significant weakness in the system. As the principal figure initiating remuneration claims and appeals, CDF holds the prime responsibility for the financial welfare of Defence Force members. But as the head of management of the ADF he is also intimately involved in force structure planning, and it is not difficult to imagine a conflict of interest if, for example, proposed remuneration increases were likely to impact on planned re-equipment programs. As the Cross Report says, the wage-fixing system makes the CDF 'the leading representative of both employees and management'.(10) The Cross Report's solution was to grant the Defence Force Advocate the right to appeal against DFRT determinations, but this was, perhaps understandably, rejected by the Government.

The ADF view is that the 'management advocacy' role of the CDF does not create a conflict of interest. It is a tenet of Defence Force philosophy that the commander is trained for and practices dual leadership roles involving operations and welfare. The ADF would claim that the responsibility of military commanders for morale and welfare has always been more demanding than for civilian managers. The decision-making process which balances the sometimes opposing requirements of operational and personnel demands has been tested over time and found to be effective.

In Serving Australia, Graham Glenn proposed a 'fundamental shift from the present system' by changing the role of CDF to that of the employer i.e. taking over this role from the then DIR. Glenn saw no conflict with CDF's responsibility 'to care for the troops', on the grounds that the responsible management of resources would be in the troops' interests. For the presentation of the ADF members' point of view, Glenn proposed the creation of a Defence Member Representative backed by a 'consultative mechanism' which would elicit members' views.(11)

The Secretariat Papers to the DER Report take a similar view to Glenn:

CDF is the most appropriate position to undertake the ADF employer role in the context of workplace bargaining. CDF should finalise proposals for major improvements in conditions of service and take the decisions to the Tribunal for ratification or, as appropriate, arrange for internal determination.(12)

Also like Glenn, it is recommended that a new position be created to represent ADF members:

A Defence Force Personnel Advocate should be established to ensure that there is an adequate knowledge and understanding of ADF members' views.

If CDF did take over the employer's role, the situation would be similar to that which existed from 1984 to 1987, when the Secretary of Defence represented the employer, before DIR took over. And similar complications would result. For example, who would brief and represent in negotiations the CDF as employer, and who, in the absence of a union, would brief the members' advocate or representative? Presumably all concerned would be Departmental employees, and even in these days of workplace bargaining there is potential for tension between two sections of the Department. At present the ADF members can work with and advise the CDF in his role as their representative, but taking over the employer's role would seem to jeopardise his impartiality.

In one sense the problem for the CDF would be more complex than it was for the Secretary in 1984-87. The CDF would be bargaining over resources, but it is the Secretary, not the CDF, who is responsible for resources. It may seem that the move of CDF to the employer's role is logical, but it must be recognised that, given the CDF's somewhat compromised position, the situation is not as clear-cut as Glenn and the DER seem to think.

If the CDF was given the role of employer, a dilemma would remain over who would represent the 'employees', the ADF. In an article in 1995, Major Michael Barry discussed two options for this role; the Armed Forces Federation of Australia (ArFFA) and a personnel organisation. The major problem for ArFFA is that it is not widely representative of the ADF. Also its existing position as a lobby group would make a representational role totally unacceptable to ADF Command, which is completely opposed to any hint of unionisation in the Forces. The other option, as Major Barry points out:

...would require a personnel organisation to be established which was part of the ADF but outside the chain of command to the CDF. This organisation would be staffed by military personnel under a normal posting cycle but would be constrained by budgetary considerations and fears of career repercussions.(13)

It would be hard for such an organisation not to appear on occasions to have a conflict of interest with the chain of command. Neither Glenn nor the DER Secretariat Papers give much information on how their proposed personnel representatives would fit into the system, but, in any case, there would seem to be problems involved. Glenn proposes a 'consultative mechanism', and it might be useful to have a small secretariat which could act as a more systematic mechanism for sounding out the views of members, particularly those in lower ranks, on conditions of service matters. Communication from the lower ranks upwards has always been a problem for the ADF, and such a body could supplement the existing means of obtaining feed-back on such matters. But this would be purely an advisory mechanism; it would leave unresolved the problem of employee representative.

For the last decade it has been convenient for DWR&SB (formally DIR) to be the employer in remuneration cases, providing an external opposition for the ADF without causing problems for a chain of command which requires personnel to perceive the CDF as concerned for their welfare. This paper will now consider the position of DWR&SB.

3. Role of the Department of Workplace Relations and Small Business (DWR&SB)

The main argument against DWR&SB in its present role of representing the Government as employer before the DFRT is that DWR&SB has little practical experience with defence and, unlike other employers, is not held responsible for productivity, efficiency, employee morale or manning levels. Normally when considering pay claims, an employer must balance the effect of increased production costs against possible adverse effects on staff morale, efficiency and retention. As DIR does not have to bear the consequences of the results, it may be suspected of lacking a close interest in reaching impartial positions on matters.

Under section 58H of the Defence Act, the Tribunal is responsible for considering pay and a number of allowances in the nature of remuneration. A number of other allowances such as Temporary Accommodation, Meal Allowance, Uniform Maintenance Allowance and Disturbance Allowance are routinely reviewed by the Minister for Industrial Relations under section 58B of the Defence Act and need go before the DFRT only if referred by CDF or the Minister for Workplace Relations and Small Business.

The Cross Sub-Committee in 1988 reported widespread dissatisfaction with the DIR's role in the salary and allowances machinery, although many of the problems, such as the backlog of conditions of service issues to be dealt with by the DIR, appear to have since been resolved. However, it can be asked whether authority for the determination of at least some of the allowances under section 58B should be handed to Defence. They would become part of the Defence Minister's jurisdiction, as such matters are in other Departments, with responsibility for decision and determination duly being delegated to the relevant internal organisations. A number of the section 58B allowances correspond with public service allowances, but the majority are unique to the ADF. In any case, the whole climate of industrial relations at present is to make such things as allowances part of the bargaining process within individual enterprises. The DER Secretariat Papers seem to agree that DWR&SB's role in this regard should be reduced.(14)

The case for the DWR&SB's position should be stated. Through its varied departmental roles ranging from employer to, in a national wage case, defender of economic policy, one of its major tasks is to preserve industrial relations principles. Criticism cannot be directed at this legitimate task, but only at the means employed on occasion in carrying it out. And in recent years its role has become less defensive and more advisory, drawing on its particular expertise.

It should also be pointed out that DWR&SB's power to make determinations on any of the more than 100 Defence related allowances is not secret or arbitrary. Section 58C of the Defence Act provides for disallowance of any determination, by requiring the tabling before Parliament of all determinations according to the Acts Interpretation Act. A motion of disallowance can be presented in either House after any determination has been tabled.

DWR&SB's role could be changed by administrative order i.e. legislation would not be needed. If the Minister for Defence did replace the Minister for Workplace Relations and Small Business as employer, DWR&SB could assume much the same role before the Tribunal as it does before the Industrial Relations Commission, presenting the Government's industrial and employment policy. It could become another intervener, turning up at conferences and hearings arranged by the Tribunal when DWR&SB considers it necessary. Its main function would be confirming that submissions to the DFRT conformed with government policy.

4. Adversarial procedure and the Defence Force Advocate

This is an issue which was important in 1990 when this paper was last updated, but has generally lost significance. In the article mentioned earlier, David Quick, the first Defence Force Advocate (DFA), defended the adversarial appearance which he claimed characterised much of the proceedings before the Tribunal, i.e. a dispute is created and then resolved by arbitration. Quick argued that such a process provided an excellent opportunity for the decision makers to assess and evaluate counter arguments.

However, as has been shown above, much of the Tribunal's business is now conducted on an 'agreed position' basis. And even when adversarial procedure has applied, it has lacked the more obvious confrontation typifying many industrial disputes. In fact early in the life of the DFRT, the criticism was made that the adversarial process demonstrated at the Tribunal was a pale imitation of that to be seen in, for example, the proceedings of the Industrial Relations Commission. Defence Department formulation of a case was seen then as lacking the negotiating proficiency, including the specialised adversarial skills, which are needed in the preparation of ADF submissions to the Tribunal. However, the capacity of the ADF to effectively manage the adversarial procedure was enhanced early by the increases in the number of ADF officers gaining industrial relations qualifications, and through the use of ADF legal officers to assist case preparation. This use of legal officers to assist in case preparation and advocacy resulted in a higher standard of case preparation and more effective instruction of the DFA.

The Secretariat Papers to the DER recommended the complete end to adversarial arrangements. This seems unnecessary in view of the Tribunal's general lack of those features which characterise the typical industrial community, and the procedural streamlining which has led to the general adoption of the 'agreed position' process. The fact that there are technically two sides at the negotiating table does not necessarily mean the situation is adversarial. Usually what is taking place is an open sharing of views.

It would be unfortunate if the position of DFA was removed in any attempt to end adversarial proceedings. Certainly the trend to agreed positions means there is less requirement for the DFA to adopt traditional advocacy and adversarial roles. But there is at least as much requirement for him to elucidate industrial principles and provide professional industrial advice. And there are considerable benefits to ADF morale in the members' perception that there is somebody with professional expertise at the DFRT articulating their case and protecting their interests.

5. The independence of the DFRT

Statements made in the DER Secretariat Papers(15) suggest an independent and arbitral Tribunal is anachronistic, and should have its role watered down considerably. However, from a general perspective of ADF personnel policy and morale it would be unfortunate if the DFRT was weakened to a position similar to that which obtained in the 1970s and early 1980s, as described earlier in this chapter. The Committee of Reference for Defence Force Pay was a conscientious research body, but it had no independent powers of determination. Although the Tribunal serves increasingly as a forum at which the parties negotiate an agreement, it is still necessary for a determination to be made at the end, to certify the agreement arrived at. And the Tribunal's determining power is crucial when the parties have been unable to reach a prior agreement.

The criticism has been made that, in a time of self-funding, there should not be an independent organisation committing Defence to inappropriate expense. But this assumes the Tribunal's only consideration is to protect the rights of ADF members. Certainly the Tribunal provides a safeguard for the members, but as an independent body concerned with equitable outcomes for all parties, it must balance the interests of members with those of the Department and taxpayers and with government policy. There is always provision during a case for a submission on costs to be made, and most decisions accompanying the determinations state the resulting cost or how the cost will be met. During its twelve years, the Tribunal's record in its determinations seems to have been responsible, a good example being the July 1992 decision to increase the Service Allowance by $800. The Tribunal gave consideration to a broad spectrum of views, and took into account the history of the allowance before coming up with a figure which was below the ADF's proposal and well below the more extreme proposals and, indeed, general expectations.

It is important that the DFRT's legislative requirement to review allowances in the nature of pay every two years should continue. This routine is reassuring to ADF members and good for morale. As the system has evolved, the Tribunal does not initiate review of a particular allowance; rather, it brings the matter to the notice of the ADF, inviting applications. If there is evidence of any need for review, an application will be lodged requesting an outline of the situation of all allowances. It is possible to foresee the DFRT being given a more proactive role in future, accepting submissions on relevant matters from interested bodies, and initiating reviews-for example, of disability allowances-where it felt these were required. In any case, it is essential it retains the safeguard of the periodic review mechanism. A reversion to the 1970s system, with the determining powers being moved to the Minister and the DFRT becoming merely an advisory body, would be most unfortunate.

Legislation would be required to alter the Tribunal's role. In view of the Coalition's policy at the 1993 federal election to expand the role of the DFRT, it would be ironic if weakening of the Tribunal's powers took place under the present government. In its October 1992 defence policy, the Coalition proposed the Tribunal take over from DIR the determination of the section 58B allowances (i.e those not pay-related), and recommended the positions of the DFA and the Chairman of the Tribunal be made full-time. And the Coalition's defence policy document for the 1996 election committed it to 'maintaining independence for the Tribunal'. In a sense, Defence Ministers have as much reason as anybody to regard the DFRT as a blessing. In the pre-Tribunal days, with ultimate power resting with the Minister, unpopular decisions were seen as the Minister's fault. Now pay fixing is at arms length from the Minister, and when there are unpopular decisions members can only glare at the Tribunal or perhaps criticise the inadequacy of those who represented them.

It is clear from the above that, while changes would seem desirable, the very complexity of the issues involved with ADF remuneration makes it essential that before decisions are made and roles changed, a thorough review of the system and examination of options is initiated. This would allow a rational transition to a new system.

Endnotes

  1. COR 4 i.e. Committee of Reference for Defence Force Pay, Fourth Report, 12 August 1982, p. 85.
  2. ibid: p. 88.
  3. Department of Defence, The Defence of Australia, 1987, p. 96.
  4. The following description is taken from: D. Quick. An independent arbitrator: the Defence Force Remuneration Tribunal in H. Smith (ed.). Rewarding the Defence Force. Australian Defence Studies Centre, University of NSW, 1987, pp. 21-22.
  5. The AIRC's investigative machinery is still intact under the Workplace Relations Act even though other options are available in day-to-day bargaining.
  6. DER . Secretariat Papers, p. 280.
  7. McGuire, Captain D. J. Collective Bargaining Principles in the ADF-can they work? Australian Defence Force Journal, September/October 1995, p. 45.
  8. Defence Force Remuneration Tribunal. Eleventh Report, 1995-96, p. 27.
  9. Barry, Major M.J. A study of the application of productivity based wage fixation to the Australian Defence Force. Unpublished thesis, Queensland University of Technology, 1994, pp. 22-23.
  10. Cross Report, p. 269.
  11. Glenn Report, p. 233.
  12. DER Secretariat Papers, p. 281.
  13. Barry, Major M.J. The application of productivity based wage fixing principles to the ADF. Australian Defence Force Journal, September/October 1995, p. 30.
  14. DER Secretariat Papers, p. 280.
  15. DER Secretariat Papers, pp. 280-281.

Chapter 4: Financial Conditions: Pay

This chapter will begin by investigating an issue which has been a long-term policy problem in the determination of ADF pay scales. This will be followed by a discussion of recent developments in pay reform.

Finally there will be a brief examination of how ADF pay scales have moved in the last decade in relation to Australian Public Service (APS) salaries and the CPI.

The Relationship Between ADF and APS Pay Scales

Central to pay-setting policy is the concept that Defence Force salaries should be maintained at a level which accords with civilian standards for equivalent qualifications, experience, capabilities, responsibilities etc. However, two generally conflicting views evolved in the 1970s and 1980s concerning the basis of defence remuneration. The first, developed in the Kerr/Woodward Committee of Inquiry (1970-73) and generally continued in the Committee of Reference for Defence Force Pay (COR) (1973-82), sees a significant degree of relationship between Defence Force and Australian Public Service salaries. While suggesting a number of principles which should apply to the determination of Service pay, Kerr/Woodward concluded that 'the process of establishing levels of salary within the services by making broad comparisons with rates in the Commonwealth Public Service is a fair and just method', providing that special features of Service life are taken into account.(2) As a result, salary points in the Defence Force were related to specific points in the APS: all non-commissioned salaries were related closely to the APS physical grades; movements in the salaries of officers from Second Lieutenant to Colonel generally followed the professional grades of the APS; and Brigadier and Major General moved with the APS Second Division, as it then was, all under the principle that both Defence and the Public Service have a 'common employer', the Commonwealth.

The second view of Defence remuneration was emphasised in the COR's Third Report (1981)[COR 3], in which it recognised the concept of a distinctive Defence Force industry, requiring an independent salary structure based on its own special conditions and needs:

In fact the tasks and needs of the two organisations are directed to the achievement of different goals by way of different procedures per medium of servants operating in entirely different environments. A consideration of entry standards, training proposals, promotion criteria, rank, contracts of service, discipline and uniforms are but a few manifestations of the differences to which we have referred.(3)

COR 3 also challenged the salary alignments between certain supposedly 'equivalent' ADF and APS 'rank' levels: 'The alignments chosen, although representative of significant areas of APS employment not dissimilar to some aspects of Service work, constricted the flexibility of the salary scales in the Defence Force.'(4) For example, insufficient adjustment was made for NCO responsibility or technical training. Also the assumption that certain ranks are interchangeable with specific APS classification levels did not take into account the fact that Service members are posted regularly from job to job, often comprising a number of completely different tasks relating to military skill.

The Defence Force salary structure resulting from COR 3 was thus a move away from the common employer principle, with the sensible hedge that where similar situations plainly exist, then similar conditions of service between the Defence Force and the APS should apply (this is obviously important, for example, in the situation of close proximity with civilian counterparts in the offices of the Department of Defence). As we shall see later, Defence is only now really embracing the COR 3 idea of an independent salary structure for the ADF.

However, to some extent COR in its final report in 1982 returned to the proposition that work relativity comparisons with the APS remained relevant, stating that:

Whilst also of the view that specific 'one for one' alignments with the Australian Public Service may not always constitute appropriate comparisons, we see rates in that Service as continuing to be of significant influence.(5)

The creation in 1984 of the DFRT as an independent pay fixing body generally reflected the view of the Defence Force as a unique industry. In practice, however, the earlier view, emphasising the equivalence between Service members and public servants, still operated.

The Cross Report, in 1988, emphasised the deficiencies in the COR mechanism as outlined above, and implied that a completely independent review of the defence wage structure had not at that point been carried out. Thus, while acknowledging the importance of wage restraint to Australia's current economic strategy, the Sub-committee concluded that:

... while we support the establishment of the DFRT, we believe that the wage base from which percentage increases awarded by the Tribunal apply may be wrong; at the least, the method by which that base has evolved is questionable. As long as that base remains unchallenged, therefore, doubts about the adequacy and correctness of ADF salaries will justifiably continue.(6)

In section 58H (6) of the Defence Act, the Tribunal appears to have been given not just the power to make an independent review of the salary structure, but, indeed, the requirement to do so. The Section directs that the Tribunal 'shall inquire into and make a further determination' on Defence Force salaries and allowances within two years of its last determination, or within a shorter period if directed by the Minister. When challenged about its possible failure to comply with this provision, officials argued that each decision to apply the National Wage Guidelines constituted a review of salary and allowances: 'when a national wage case decision is flowed on to the ADF, it can be said that in flowing on that decision the Tribunal had indeed reviewed the pay and allowances of the Defence Force'.(7)

Certainly there was confusion in the late 1980s as to whether the series of national wage case flow-ons met the requirements of section 58H (6). Even the Senate Estimates Committee admitted in November 1989 that 'it was uncertain as to whether the actions cited by the Department meet the requirements of section 58H (6)'.(8) The problem lay mainly in what constituted an independent inquiry of Defence Force pay. The closest thing to a complete and open assessment of the ADF salary structure took place under COR 3, in 1981, and many people wanted this sort of inquiry into the fundamentals and structure of the pay system. But section 58H (6) requires salary determinations by the DFRT at least every two years, and it is inconceivable that such basic reviews could take place so frequently.

A two-fold pattern has in fact developed. First, every two years the Tribunal submits all aspects of the system-salary, allowances, structure-to Defence and asks for advice as to which elements require review, where inequities are perceived and adjustments needed, and when the review is required. Defence's response will determine which areas will receive reviews. Secondly, Defence is free at any time to apply for review of a matter that has suddenly become a problem. That is, there is no inflexible interpretation of the two year clause, with an automatic inquiry into aspects of pay that do not require this. The determinant of Tribunal action is need, although it is ensured that all elements of the system are examined at least every two years to see if there is such a need.

Sometimes more fundamental inquiries are called for. For example, the Pay Structure Review between 1992 and 1996 carried out a comprehensive review of other ranks pay structure. The current review of officers' salary structure is also looking at basic issues, as indeed did the two inquiries into Service Allowance.

Recent Developments

During the 1990s, concern among the ADF appears to have shifted from traditional areas such as pay to other conditions of service and lifestyle factors. This is understandable; the creation of the DFRT has given the security of independent arbitration, the DHA has resolved probably the major traditional conditions of service problem, the housing issue, and the MSBS has largely repaired the deficiencies of a superannuation system confined to the DFRDB. In his report, Glenn makes the point that pay 'is not the sole determinant in attracting and retaining quality people - other factors include job satisfaction, location stability, career opportunities and the extent to which family needs are met.'(9) Also it is clear that some of the issues that appear, for example, in the later chapter on the service family have taken on increasing importance among service personnel. The importance of these issues is being acknowledged in remuneration reviews. For example, in its Decision on Service Allowance in July 1992, the Tribunal stated:

We consider that the disruptions caused as a result of the frequency of postings to ADF members with spouses and/or family responsibilities should be taken into account in the assessment of Service Allowance.(10)

ADF pay movements in the 1990s have continued to be closely aligned with those in the APS, with the ADF generally following the lead of the APS. On the question of whether the common employer principle should be preserved or whether the ADF should take an independent approach in its remuneration, Glenn generally argued for the latter and claims the emphasis on enterprise bargaining favours independent outcomes. This independence appears to be emerging at present, with the ADF taking the initiative, in advance of any APS decision, in beginning the process of determining a new workplace-bargaining agreement. Glenn was critical of the ADF pay system, arguing:

Broadly, the ADF reward, recognition and entitlements system lacks specific incentives for relocation or for service in remote localities, does not fully recognise work value, tends to use promotion to provide salary increases and does not always provide competitive remuneration packages.(11)

Some of these factors have since been introduced into the system. For example, recognition of work value was emphasised in the determination on other ranks pay structure in February 1995, and, as we shall see, is being given prime importance in the current review of officers' pay.

Glenn also speaks of deficiencies such as 'an inability to respond to market forces thereby failing to attract and retain skills critical to capability' and 'an inability to provide sufficient incentives for members to undertake more demanding jobs and in some instances to pursue promotion'. Glenn recommended a revised ADF pay system based broadly on paying people for the value of work performed i.e. work would be split up into classes or families of jobs which would receive similar remuneration. This would generally remove rank as the yardstick of pay, and Glenn was quite in agreement with salary overlaps at some rank levels. Similarly he did not think members should be paid on the basis of skills and qualifications attained; the important criterion is the nature of work performed.(12)

There seems to be acceptance of this criterion in the restructuring moves currently taking place, with remuneration being linked to the contribution members make to the ADF. In a recent newsletter, Defence Personnel Executive stated that the ADF's remuneration structure is 'showing signs of age and does not provide the combination of flexibility and reward needed in these changing times'.(13) A project team has been established to look at the allowance and salary structure, and comment on possible changes to allowances is given later in the paper in the chapter on allowances. In the area of salary, it seems different structures will be created for each of four groups: the Trades-Based group, covering Private to Sergeant (the salary structure for this group was overhauled in the Pay Structure Review of 1992-96); the Specialist group, consisting of doctors, dentist, lawyers etc; the Command and Management group, covering the ranks of Warrant Officer to Lieutenant Colonel; and the Higher Command and Management group, covering Colonel to Major General. In the case of the Command and Management group, which has the largest number of personnel apart from the Trades-Based group, there appears to be a move to broadbanding, with rank no longer the sole determinant of salary. The newsletter gives an assurance that no officer will lose money, and states:

The Command and Management group is intended to be paid using a graded system that has some similarities to the current other ranks system. In other words, the officers would be placed in a pay group depending on their occupational group....A major survey of work value is now under way across the ADF.(14)

It is clear increasing emphasis is being placed on work value, as recommended by Glenn; but it is still possible another determinant of salary will be qualifications, such as tertiary degrees, a step which neither Glenn nor the DER seemed to favour. It does seem that these reforms could make a decisive break with the APS pay structure, which itself is undergoing significant change.

A recent article in the private sector journal Defender recommended a streamlining of the rank structure, for example by cutting the number of officer ranks from ten to six. It argued this would help break down the rigidity of the rank-for-the-job structure.(15) Proposals such as this would introduce significant classification broadbanding to the ADF.

Comparative Movements of ADF and APS Salaries and the CP

Table 2gives the salaries of several ADF officers and of those APS administrative positions with which they have traditionally been linked. Their percentage movements are shown from 1975 to 1990, from 1983 to 1990 and from 1990 to 1996. Included also are movements in the Service Allowance and in the CPI and Average Weekly Earnings, and a Private's pay for 1990 and 1996. Engineering salaries were included in the 1990 edition of this paper, but these have since been correlated with administrative rates and their inclusion would be repetitive.

In listing the APS administration levels, the previous classification is shown in brackets. It is important to read the notes to the Table.

In making this comparison, we are open to the criticism that, in view of the discussion earlier in the chapter, we are not comparing like with like. But we would justify the examination on the grounds that it gives some idea of how ADF officers' pay has moved in relation to some other.

Several points emerge, looking mainly at the percentage columns:

  • For the six year period October 1990-October 1996, APS and ADF salaries have followed similar patterns, with the percentage increase for the ASO 3-6 levels almost identical with those of Private, Lieutenant and Major; and SOG C, SOG B and SES 2 generally similar to Lieut. Colonel, Colonel and Major General..
  • The reason for the high increase in SOG C and SOG B salaries during the period 1990-1996 compared with those of ASO 3-6 is that Performance Pay and the Senior Officers Allowance (which ASO 3-6 did not receive) have been rolled into the Public Service Senior Officer salaries.
  • As in both the earlier periods shown, Service Allowance recorded the largest percentage increase on the table during 1990-1996. This, of course, is because of the effect of the two DFRT determinations on the Service Allowance, in 1987 and 1994.
  • All figures for the period October 1990-October 1996 exceed the CPI increase, some quite significantly. This contrasts with the previous period, October 1983-October 1990, when the CPI percentage increase exceeded every increase except that of Service Allowance. Thus, the real value of the APS and ADF salaries shown has risen since 1990, reflecting the fact that inflation has been curbed in the 1990s.
  • Similarly, many of the APS and ADF percentage increases exceeded the increase in Average Weekly Earnings during 1990-1996. As with the point above, this trend contrasts with the earlier period, October 1983-October 1990, when Average Weekly Earnings kept close to the CPI and ahead of all APS and ADF increases.
  • For the 21 year period, September 1975-October 1996, Average Weekly Earnings and the CPI both increased more than any salary on the table. Only Service Allowance showed a larger percentage increase for the 1975-1996 period.

Table 2: Selected Salary Movements (a) (b) 1975-1996

 

Date of Effect as at

% Increase

 

19 Sep 75 $p.a.

6 Oct 83 $p.a.

4 Oct 90 $p.a.

17 Oct 96 $p.a.

Sep 75- Oct 96

Oct 83- Oct 90

Oct 90- Oct 96

AUSTRALIAN PUBLIC SERVICE

Administrative (c) Admin Service Officer, Class 3 (Clerk Class 4)

9905

20046

27780

33304

236.2

38.6

19.9

Admin Service Officer, Class 4 (Clerk Class 5)

11093

22341

31150

37341

236.6

39.4

19.9

Admin Service Officer, Class 5 (Clerk Class 6)

12189

24490

33930

40675

233.7

38.5

19.9

Admin Service Officer, Class 6 (Clerk Class 8)

14572

29048

39700

47591

226.6

36.7

19.9

Senior Officer, Grade C (Clerk Class 9)

15757

31384

43597

55170

250.1

38.9

26.6

Senior Officer, Grade B (Clerk Class 11)

18136

36641

50670

66175

264.9

38.3

30.6

Senior Executive Band 2 (2nd Division, Level 4)

27547

54601

79955

101217

267.4

46.4

26.6

DEFENCE FORCE

Private

7038

14915

22160

26655

278.7

48.6

20.3

Lieutenant

9962

20130

28966

34819

249.5

43.9

20.2

Major

15759

29517

41778

50119

218.0

41.5

20.0

Lieutenant Colonel

17415

35775

50845

66205

280.2

42.1

30.2

Colonel

19306

40156

56886

76442

296.0

41.7

34.4

Major General

27547

54236

80641

105513

283.0

48.7

30.8

Service Allowance (d)

950

2608

4373

6037

535.5

67.7

38.1

AVERAGE WEEKLY EARNINGS (e) (f)

146.5

357.1

574.1

715.8

388.6

60.8

24.7

CONSUMER PRICE INDEX (g)

28.5

64.0

103.3

120.1

321.4

61.4

16.3

Notes

(a) Because of lack of space, Other Rank Salaries were not used in this comparative table in the 1990 edition of this paper. However, a Private's salary has been included here.

(b) Salaries shown are exclusive of all allowances, and except for Private, are the highest in each classification. Salaries for Private (E) Pay Group 3 have been used, as this level was chosen as the anchor point in the DFRT's review of Other Ranks pay structure during 1992-95.

(c) Officer titles shown in brackets were those in use in 1975 and 1983.

(d) Prior to November 1981, all ranks below that of Brigadier received a Service Allowance. From November 1981, only ranks below that of Lieutenant Colonel were eligible to receive a Service Allowance.

(e) Average weekly ordinary time earnings (AWOTE) of full time adult males (ABS 6302.0). The Commonwealth Statisticians altered the basis on which AWOTE figures are calculated in September 1981. The old and new series are therefore not entirely compatible and should be used only as a guide to long term movements.

(f) AWOTE for full-time adult males has been used rather than AWOTE for full-time adult persons. The reasons for this are:

  • the first date on the table is September 1975, and the full-time adult persons series was not in use then;
  • during the last two decades, an increasing proportion of women have been coming into the work force. The fact that women tend to be in lower-paid employment has meant that some of the change in AWOTE for persons reflects changes in the proportion of males and females in the work force, rather than pure wage movements. This gender effect has been minimal in the ADF during this period, as the increase in the proportion of women has been comparatively small, with women at present constituting only about 13 per cent of ADF members. Also there is no marked difference between male and female income in the ADF; in fact a slightly higher proportion of women than men are officers.

(g) Consumer Price Index, all groups, weighted average eight capital cities (ABS 6401.0)

Endnotes

  1. Further discussion of some of these issues can be found in the Cross Report, p. 264-268.
  2. Kerr/Woodward Committee of Inquiry, Final Report, March 1973, para 50.
  3. COR 3, p. 14, para. 3.7.
  4. ibid., p. 15, para. 3.10.
  5. COR 4, 1982, p. 87.
  6. Cross Report, p. 267.
  7. Australia. Senate, Hansard, Estimates Committee D, 10 October 1989, p. D270.
  8. Australia. Senate, Estimates Committee D. Report to the Senate, November 1989, p. 6.
  9. Glenn Report, p. 114.
  10. Defence Force Remuneration Tribunal. Matter No 15 of 1993. Service Allowance, Decision, 20 July 1994, p. 22.
  11. Glenn Report, p. 114.
  12. ibid, p. 116, p. 124.
  13. The Key. Defence Personnel Executive Newsletter No 1. August 1997, p. 2.
  14. ibid.
  15. Defender. Summer 1995-96, p. 13.

Chapter 5: Financial Conditions: Allowances

Allowances (especially those in the nature of pay) are a recognition of the unique role of the ADF member and provide monetary recompense for hardship incurred in carrying out this role.

The Report of the Defence Efficiency Review, released in March 1997, foreshadowed a fundamental review of the allowance system. At first it seemed this would consist mainly of cutting down the number of allowances. However, it now appears the main thrust will be to split allowances into their elements of skill, disability and attraction/retention, with the skill element folded into salary and the disability element remaining as allowance. It seems elements intended for attraction/retention are to be 'better targeted', which presumably means a more flexible and practical use of these payments, focusing them on areas where, at a particular time, retention of personnel has become a concern.(1)

Ostensibly the inclusion of the skill element in salary will be beneficial, as this contributes to superannuation, but one can foresee anomalies arising. Under the existing system, for example, the whole allowance ceases once the qualifying conditions for its payment disappear. But presumably if the skill element is moved into salary, it will stay in a member's salary even though the member has been posted from the position requiring the skill to a position not requiring the skill. This means there could be officers of the same rank doing the same job but receiving different pay because one had acquired a skill component from his previous posting. It is potential problems like this which the project team set up to develop a new remuneration structure will be eager to resolve.

This chapter lists the more significant allowances with a brief explanation of their purpose. All allowances are paid in addition to basic salary.

Allowances in the Nature of Pay

Defence salaries are supplemented by a range of allowances in the nature of pay to compensate for various disabilities in exceptional circumstances. The following pay-related allowances are subject to regular review by the DFRT under section 58H of the Defence Act.

Service                                 Seagoing                            
Hard Lying                              Submarine Service                   
Flying                                  Flight Duties                       
Field                                   Separation                          
Submarine Escape Training Facility      Clearance Diving                    
Parachutist                             3RAR Parachutist                    
Unpredictable Explosives                Arduous Conditions                  
Adventurous Training Instructor         Trainee Leader's                    
Diving                                  Language Proficiency                
Trainee's Dependant                     Special Action Forces               

Higher Duties
Special Allowance for Medical Officers and Dental Officers
Resident Medical Officers - Additional Salary

There are also a number of allowances which are not directly pay-related but are more in the nature of reimbursement for expenses incurred in the course of duty. Under section 58B of the Defence Act, these allowances are referred to the Department of Workplace Relations and Small Business for determination. The most significant of these allowances will be dealt with in the next section.

Note that for any one situation, one of the pay-related allowances usually dominates, precluding 'double dipping'. Hard Lying Allowance, for example, is not paid to members receiving Seagoing Allowance. And members eligible for Special Action Forces Allowance are not paid most of the allowances for specific service.

The rates given for each allowance were correct as at 1 September 1997.

Service Allowance. An allowance at the rate of $6278 per year is paid to all members under the rank of Lieutenant Colonel or equivalent except for certain trainee categories. This Allowance is paid to compensate for the requirement to be on call at all times, to work long and irregular hours and to live and work in uncomfortable conditions, as well as for the loss of certain freedom available to civilians and for the turbulence brought about as a result of posting (to the extent that it is not compensated elsewhere). Approximately 49 290 members are in receipt of this allowance. The amount expended on this allowance during 1997-97 totalled $309.426 million. Appendix B lists the changes in Service Allowance since its introduction in 1973.

The Service Allowance is the most significant of the pay-related allowances. In 1987 the ADF sought an increase in Service Allowance to a minimum of $7715, primarily on the argument that members were, on average, working about 52.5 hours a week, and that the COR assessment of Service working hours in 1981 was incorrect and should not be taken as an accurate base. This argument was rejected by the DFRT and a $716 per annum increase resulted in a Service Allowance of $3848.

There had been high expectation of the case among Service personnel, and the result caused some questioning of the value and independence of the DFRT and of the competence of the senior officers who prepared the case.

Much debate took place around this time over the potential injustice of having a flat-rate Service Allowance available to all personnel below Lieutenant Colonel rank, regardless of hours worked or postings incurred.(2) The Government agreed to the recommendation of the Cross Report in 1988 that a determination be made of the average weekly hours worked within the ADF, with a view to initiating a review of the Service Allowance. The ADF Activities Survey showed an average of 47.9 hours worked per person per week (this did not include time spent by sailors at sea and soldiers in the field).

In 1994, the Service Allowance was again reviewed by the DFRT, with the ADF asking for an increase of at least 20 per cent (i.e. $940) on the existing $4800 Allowance. The DFRT's eventual grant of $800 generally fell well short of expectations, as in 1987.

One specific aspect of family turbulence taken into account by the DFRT in reaching its determination was the effect of postings on spouse employment. In his report in 1995, Glenn disagreed with this being a factor, and proposed that turbulence resulting from postings be removed as a consideration in determining the rate of Service Allowance. He suggested that the various aspects of turbulence such as spouse employment should receive compensation in other ways.(3)

Glenn also proposed that Service Allowance be incorporated into salary. A major argument against this is that Service Allowance is given as compensation for some of the unique characteristics of Service life, and that this compensation should receive separate review and determination. Also if included in salary, its significance as compensation could well be forgotten.

Seagoing Allowance. This is paid to all members, except for certain senior officers and their staff, who are posted for service in seagoing ships. It is given in compensation for uncomfortable conditions, restricted use of leisure time, long hours and cutting off of home contacts. Since December 1995, when Seagoing Allowance was restructured by the DFRT, it has been a tiered allowance, with rates varying according to the cumulative years of service at sea of members: $6467 per annum for a member who has completed less than four years service; $7868 if completed four but not more than eight years service; and $8946 if more than eight years service is completed. The total amount expended on this allowance during 1996-97 was $28.648 million.

Submarine Service Allowance.This is paid to submariners posted to or available for posting to a seagoing submarine, in recognition of the responsibilities, the working environment and stresses involved in such duties. There are three rates (i) the rate on shore, $3848 per annum (ii) the rate for trainee submariners during training at sea, $10 993 per annum (iii) the rate for qualified submariners posted to a seagoing submarine, $14 841 per annum. The approximate number in receipt of this allowance in 1990 was 760 members, and probably the number today would not exceed this figure. The total amount expended on the allowance during 1996-97 was $6.022 million.

Hard Lying Allowance.This is to provide some form of compensation for the discomfort experienced by members who are not entitled to Seagoing Allowance or Submarine Service allowance and are required to live in a seagoing ship, submarine or other defence force vessel for at least 48 hours. The rate for a seagoing submarine is $30.12 per day. The daily rate for a surface ship depends on the member's cumulative sea service: $17.72 for a member who has completed less than four years service; $21.56 if completed four but not more than eight years service; and $24.51 if more than eight years service is completed. The rate for a vessel undergoing refit is $4.25 per day. The rates for Hard Lying Allowance are simply 1/365th of the annual rate of Seagoing Allowance. The amount expended on this allowance during 1996-97 was $730 000.

Flying Allowance.This allowance, paid to qualified and fit aircrew, comprises two elements: a qualification and skill element, paid in recognition of the acquisition and maintenance of flying skills and the need to attract and retain aircrew, and a disability element, paid in recognition of stresses etc. inherent in military flying. Until recently, the amount paid for qualification and skill varied according to rank. However in a decision handed down on 4 September 1997, the DFRT substantially restructured the allowance, with the levels of qualification and skill payment now based on years of experience from wings graduation rather than on rank. For other ranks, the amount for qualification and skill varies from $1250 to $5750; for officers (below the rank of Brigadier), the amount varies from $2250 to $20 750. The highest rate in each case is for somebody with more than 11 years experience. A common disability rate of $4250 per year applies to all officer and other ranks aircrew. Another innovation in the September 1997 decision was to permit Brigadiers (E) to also qualify for Flying Allowance, although at a lower figure to reflect the lesser amount of flying done at this level. In Glenn's discussion of the need to rationalise Defence allowances, Flying Allowance was singled out as a prime example of an allowance that should be incorporated in salary. The approximate number in receipt of Flying Allowance is 1915 members. The amount expended on this allowance during 1996-97 was $20.217 million.

Flight Duties Allowance.This is paid on occurrence at rates up to $11.64 per day to non-aircrew members required to perform in-flight duties (for example, aerial photography, search and rescue observation) other than parachuting. The total amount expended on this allowance during 1996-97 was $342 000.

Parachutist Allowance.This allowance is paid in recognition of the stresses and skills involved. The rates are: $2321 per year for a Chute Jump Instructor; $2031 per year for a Jump Master; $1451 per year for a member conducting tactical jumps at certain units, including Parachute Training School; $750 per year for a member posted to other parachute units but not conducting tactical jumps; and $17.42 per jump for any other member required to perform a parachute descent. The total amount expended on this allowance during 1996-97 was $1.347 million.

Clearance Diving Allowance.This allowance, paid to qualified military clearance divers, comprises two elements: a qualification and skill element, which is paid in recognition of the acquisition and maintenance of military clearance diving skills; and a disability element, which is paid in recognition of stresses, high risk etc. inherent in clearance diving duties. The qualification and skill rate is $1307 per annum, and the disability rate is $4200 for those committed to render unpredictable explosives safe, and $3381 for those committed to search where unpredictable explosives can be found. Other members who may be called in to assist with this work receive a disability rate of $2939 per annum plus an 'on occurrence' rate. The approximate number of recipients is 239 members. The total amount expended on Clearance Diving Allowance plus Diving Allowance during 1996-97 was $1.24 million.

Diving Allowance.This is paid at the rate of either $29.39 per day or $2612 per year for diving duties performed by members whose normal employment does not include diving. The total amount expended on this allowance plus Clearance Diving Allowance during 1996-97 was $1.24 million.

Submarine Escape Training Facility Allowance.An instructor performing submarine escape training instructional duties is paid $5389 per year. Members posted for training at a submarine escape training facility are paid $3592 per year, while a member attending a course in submarine escape procedures receives $21.56 per day. The total amount expended on this allowance during 1996-97 was $92 000.

Arduous Conditions Allowance.This consists of three elements: a hot conditions element ($2.28 per day), a confined spaces element ($3.47 per day) and a hazardous chemicals element ($7.32 per day). The allowance is paid on occurrence to compensate for conditions encountered in the performance of duties by members whose duties are not normally carried out under such conditions. To qualify for any element, a member must endure the relevant disability for a total period of three or more hours in a 24 hour period. The total amount expended on this allowance during 1996-97 was $274 000.

Field Allowance.This is paid to compensate for the requirement to live and work in uncomfortable conditions, and possibly long and irregular hours, in the field, the consequent curtailment of home contacts and interference with leisure. In July 1995, the DFRT introduced a two tiered allowance to reflect the different levels of disability experienced. The tier one rate is $26.95 per day, the tier two rate is $15.82 per day. To qualify, a member must perform field duty for a period of at least 48 consecutive hours. The total amount expended on this allowance during 1996-97 was $17.52 million.

Special Action Forces Allowance. This allowance comprises two elements: qualification and skill, and disability (resulting from the hazard and stress involved). To qualify, members must have passed certain Special Forces courses, and be engaged full-time in a designated Special Forces position. The rate for a Qualified Special Forces member is $9335 per annum for qualification and skill, and $10 290 per annum for disability. The rate for a trainee Special Forces member is $4508 per annum for qualification and skill and $8752 per annum for disability. The total amount expended on this allowance during 1996-97 was $6.177 million.

Unpredictable Explosives Allowance. Unpredictable Explosives Allowance is paid to compensate for the hazards and stress involved in the examination, recovery, rendering safe or disposing of this ordnance. For a member whose full-time service requires him to render safe such explosives, the annual rate is $1764. For a member whose full-time service requires him to search in areas where unpredictable explosives are likely, the annual rate is $884. The total amount expended on this allowance during 1996-97 was $279 000.

Language Proficiency Allowance. This is paid to encourage and assist members to become proficient in certain approved foreign languages and for the performance of linguistic duties. Recipients are members who have qualified in specified language courses or whose proficiency in specified languages has been favourably assessed by the ADF School of Languages, and payment is subject to regular re-assessment of skills. The rates vary from $600 per annum to $6002 per annum (for advanced proficiency). The total amount expended on this allowance during 1996-97 was $401 000.

Trainee's Dependant Allowance. As the salary of trainees or trade training is less than that of normal entry recruits, this allowance affords trainees with dependants a salary not less than that of a Private Pay Level 1.

Trainee Leader's Allowance. This is paid to selected Cadets and Apprentices for additional duties performed and the higher responsibilities involved. The rate is $6.00 per week. The total amount expended on this allowance during 1996-97 was $392 000.

Adventurous Training Instructor Allowance. This is paid to Adventurous Training Instructors and Unit Adventurous Training Leaders in recognition of the special skills and qualifications required and the responsibilities and disabilities involved. The rate for an Instructor is $3713 per annum, and a Leader receives an on-occurrence rate of $26.52 per day. The total amount expended on this allowance during 1996-97 was $73 000.

Separation. An allowance of $4.91 per day is payable to members separated from their family for more than 14 days by Service duty, in recognition of intangible effects of separation and of additional expenses. A continuous rate of $497 per annum is payable to married personnel who are eligible for Seagoing Allowance, Submarine Service Allowance or Special Action Forces Allowance. The total amount expended on this allowance during 1996-97 was $2.456 million

Although their authority is section 58B rather than section 58H, the following retention bonuses can properly be included in this 'pay-related' category:

Pilot Retention Bonus. This was first introduced in April 1988 in response to large increases in pilot separations, from a long-term average of 47 a year to 110 in 1986-87 and 127 in 1987-88. A taxable bonus of $70 000 was payable to pilots meeting certain criteria who agreed to serve for a further six years. Intended to operate for a period of four years, it ceased on 14 August 1991. Most recipients under this scheme have now completed their six year full-time service obligation, and the bonus was reintroduced on 10 December 1996 to counter recent significant increases in pilot separations. This time the scheme was designed to more precisely target the ADF pilot population in order to minimise the impact of separations, and provides greater choice for recipients than the 1988 scheme. The following options are available:

  1. $50 000 (pre-tax) in return for a commitment to three years full-time service;
  2. $75 000 (pre-tax) in return for a commitment to four years full-time service; and
  3. $120 000 (pre-tax) in return for a commitment to five years full-time service.

Air Traffic Controller Retention Bonus. A taxable bonus of $70 000 was introduced in January 1996 to assist in the retention of qualified and experience air traffic controllers. The member must agree to give a further 5 years full-time service. As with the Pilot Retention Bonus, introduction of this bonus was in response to a sharp increase in air traffic controller separations around this time, largely due to heavy recruiting by Air Services Australia.

Other Allowances

As mentioned above, the following allowances are the more significant of those reviewed by the Department of Workplace Relations and Small Business (i.e. not by the DFRT) under section 58B of the Defence Act. Not all provisions have been listed, as many are common to the APS and are generally well known. The Defence Force considers for adoption all APS provisions which can be adapted to Service needs. Examples are: Travelling Allowance and Overseas Allowance, which have been adopted virtually unchanged; and Disturbance Allowance, which has been modified by providing a differential rate which increases with each removal.

Some APS provisions such as Driving Allowance, Supervising Money and Sick Leave are not used. The general principle is that under identical conditions, the same provisions should apply, unless they require variation to meet other Defence provisions, or are inconsistent with the military employment package. For example, the Defence Force provides different arrangements for medical care and disabilities, and different leave and leave-travel allowances.

Uniforms. Members receive an initial issue of uniforms at public expense. Women in all Services receive assistance with the purchase of personal clothing and necessities which are not issued.

Members serving in special appointments, such as Aide-de-Camp to the Governor-General, or Service Equerry to a visiting member of the Royal Family, are paid an outfit allowance to reimburse the cost of purchase of civilian clothing.

Uniform Maintenance Allowance. Uniform Maintenance Allowance is paid to assist members to maintain an approved scale of uniforms in good condition. The allowance does not cover laundry or dry cleaning, or personal items such as towels, brushes, pyjamas and underwear. This allowance is indexed annually according to the clothing component of the CPI. Ranks up to:

Corporal receive          $394 per annum                                    
Warrant Officer           $473 per annum                                    
Officers                  $640 per annum                                    

This, together with salary and Service Allowance, forms the basic regular remuneration of most members. Expenditure on this allowance in financial year (FY) 1996-97 was $25.899 million.

Living Out Allowance (LOA). Financial assistance for meals, reasonable accommodation, utility charges and laundry costs is given to single members who are required to live away from base because Service accommodation appropriate to rank and status is not available, or who, for 'compelling reasons of a compassionate or personal nature', have approval to live out. This should not be confused with Living Out Away From Home Allowance. Expenditure on LOA during 1996-97 was $20.742 million.

Faced with poor standard living-in accommodation, lack of privacy etc., members, especially older members, have often chosen to seek other accommodation. However, if living-in accommodation is available, even though of low standard, the member is not generally eligible for LOA. In response to a Cross Report recommendation that increased access to LOA be allowed where on-base accommodation is sub-standard, the Government claimed that the cost of full implementation would be $58 million, and generally rejected the proposal, only agreeing that it might be possible 'in one or two of the worst affected bases'.(4) Since then it has been decided that decisions on specific cases can best be left to individual base Commanders. Anomalies associated with LOA are mentioned on pages 85 to 88.

Living Out Away From Home Allowance (LOAFHA). This allowance is paid to cover the cost of accommodation and meals incurred by members during a period that they are separated from family and cannot be rationed and quartered under Service arrangements. To qualify for LOAFHA, a member must live out away from his or her home for at least 72 consecutive hours. Expenditure on this allowance during 1996-97 was $575 000.

Defence Force Extra Risk Insurance Expense Allowance. Also linked with the APS, but of wide Services appeal, this allowance reimburses the extra cost to a member required to pay higher than normal life insurance premiums, owing to the nature of the member's Service employment. The total allowance claimed cannot exceed 1.2 per cent of twice the salary of an Army Captain (or equivalent) with five years service. Expenditure on this allowance during 1996-97 was $7000.

The following allowances are linked with postings:

Home Purchase or Sale Expenses Allowance. This is not unique to the Defence Force, the APS having a similar allowance. The allowance assists members in purchase and sale of their homes on posting or unit relocation by reimbursing many of the unavoidable legal, conveyancing and real estate costs associated with these transactions. Reimbursements vary in each case and they are limited to the amounts normally charged in the State or Territory in which the purchase or sale occurs. Postings under 12 months do not qualify, and with the exception of the first home purchase, the allowance is not paid for a purchase without a previous, comparable sale. Also a member, to be eligible, must be officially notified of a posting before that member enters into the agreement to either purchase or sell his/her home. Expenditure on this allowance during 1996-97 was $9.236 million.

Temporary Accommodation Allowance (TAA). Assistance with accommodation and food charges is provided where a member and his family are obliged to occupy a house or serviced apartment as a consequence of posting, or for other Service reasons. TAA is only paid on completion of service in the discharge locality for the period furniture and effects are in transit. Expenditure on this allowance during 1996-97 was $17.648 million.

Child Care Reimbursement Allowance. This is paid to reimburse a member for expenses incurred for child care while undergoing a removal at public expense. The allowance is limited to $38.15 per day for a maximum of two days. To qualify for this allowance, there must be only one adult present at the time of the removal, and the child/ren must be under 11 years of age.

Temporary Rental Allowance (TRA). This is paid to members with family who do not own their own home in the posting locality and who cannot be provided with a suitable married quarter. The amount varies according to a member's rank and the approved rental ceiling for the locality involved. These ceilings are reviewed periodically. Expenditure on this allowance during 1996-97 was $31.197 million.

Disturbance Allowance. This allowance is designed to assist a member with unreimbursed costs associated with a removal and accelerated depreciation of furniture and effects caused by repeated movement. Telephone reconnection and certain motor vehicle charges may also be reimbursed, subject to certain conditions. The rate varies according to the domestic status of the member, the nature of the removal, the number of previous removals and the number of full-time student children who are members of the family. For example, the rate for removal to a new locality for a member with family varies from $728 to $1456, depending on the number of previous removals, and with an additional payment of $140 for each full-time student child involved. Expenditure on this allowance during 1996-97 was $12.602 million.

Education Allowance and Extra Tuition Allowance. These allowances no longer exist, having been incorporated into a general Education Assistance Scheme in 1996. This scheme will be discussed in the chapter on the 'Service Family'.

_____________________________________

Special Gratuities/Annuities for Honours and Awards.

Victoria Cross/George Cross. An annuity of $250 per year, or $125 to dependants if awarded posthumously. Paid to all winners of this decoration.

Gallantry. Other Rank winners of certain decorations for gallantry, including the DCM, CGM, DSM and DFM, are paid $40, either on promotion to commissioned officer rank or on termination of service.

Both the above provisions date from 1984.

In addition, under the Veterans' Entitlements Act, a veteran who has been awarded one of these decorations, and is in receipt of a Disability Pension, is eligible for a Decoration Allowance, payable at the rate of $52 per year.

Long Service and Good Conduct (LS & GC). A gratuity of $10, payable to a member who, while holding the rank of Flight Sergeant or Warrant Officer Class 2 or below, has been awarded the LS and GC Medal. The gratuity is paid on either the member's promotion to Warrant Officer in the RAAF or Warrant Officer Class 1 in the Army or on discharge. A member of the RAN who has been awarded the LS and GC Medal may receive an annuity of $2 for each year of service completed after becoming entitled to the medal.

This provision was introduced in 1984 and has not been changed since.

Retiring Gratuities. Paid to officers who reach compulsory retiring age before becoming entitled to any other retirement benefit, after minimum service of 10 years. $240 is paid for each completed year of service as an officer, and $100 for any year served as a non-commissioned member. In other cases, officers receive $100, and other ranks $40 for each completed year of service up to six years, and $100 per additional year. This gratuity was introduced in 1984 and has not been changed since.

As can be seen, many of the above conditions apply to relatively small numbers. Others, particularly those adapted from the APS, are extensively used.

Endnotes

  1. The Key. Defence Personnel Executive Newsletter No 1. August 1997, p. 2.
  2. See the Cross Report, p. 281-288, for a discussion of the subject.
  3. Glenn Report, pp. 126-129.
  4. Government's Response to the Cross Report recommendations, 11 May 1989, p. 19.

Chapter 6: The Service Family

The Impact of Changes in Society

One indication of the increased importance of the family unit in the ADF is the amount of space provided for the subject in this paper. Twenty pages are needed to cover the various issues and initiatives taken, as compared with eight pages in the last edition, in 1990, and no separate entry in 1984. Two of the single Service support organisations existed in 1984, but virtually all the initiatives described in this chapter have occurred in the last decade. In 1988 the Cross Report, inquiring into causes of wastage in the ADF, found added meaning in the assertion 'The Australian Defence Force recruits soldiers and retains families'. Certainly the bare figures on the incidence of married personnel should indicate the importance of the family unit in the ADF.(1)

The changes in the ADF which have given new significance to the Service family stem from basic changes in Australian society. First, dual-career families are increasingly becoming the norm in Australia, impelled by a desire, or necessity, to have additional family income, and by the growing number of women who aspire to a separate career outside the home.

Along with this fundamental social change have come shifts in community values. Higher family expectations are held for quality of life factors such as good housing, geographic stability, employment opportunities and better education. The husband's role is changing, with emphasis moving to his part in child care and the development of his spouse's career. A number of other factors evident in society are also having their effect on the Service family. As was stated in the Pratt Report in 1994:

When viewed with the increased stress caused by divorce, with custody disputes, visiting rights, child support payments and the needs of children being raised in single or lone parent families, the ADF family is becoming more complex and the support mechanisms need adjustment to cater for these changes. Children also are staying at home for much longer than in the past according to Australian Bureau of Statistics figures, and this is apparent in ADF families. There also appears to be an increase in the number of elderly dependants living with families.(2)

These trends have put special pressure on the Service family as it strives to cope with the demands of service life. When each posting can result in one's spouse having to give up job and income, and one's children being affected by yet another schooling change, it is not surprising that many members re-examine their commitment to the ADF. This was a prime factor in the increased separation rate in the late 1980s, and must still be an important concern.

The Development of a Tri-Service Support System

The Hamilton Report

In November 1985 the Minister for Defence commissioned Ms Sue Hamilton from the Office of the Status of Women to conduct a study into the main problems facing spouses of Service personnel. The report was titled 'Supporting Service Families' but is more commonly known as the Hamilton Report. It was presented in April 1986 and quickly received strong support from most sections of the Defence community.

Australian Defence Families Information and Liaison Staff (ADFILS)

In April 1987 a major Hamilton Report recommendation was implemented when the Defence Minister, Mr Beazley, announced the formation of the Australian Defence Families Information and Liaison Staff (ADFILS) to provide community development support, educational advice and assistance, and information on general personnel matters to Service families. Mention will be made later of social work support within the single Services for individual members and their families; ADFILS, a tri-Service organisation, was intended to supplement the existing single Service organisations by concentrating on support for Service family communities. ADFILS aimed to assist families in an area to understand their problems and to organise themselves to solve those problems.

ADFILS was initially established with a central coordinating unit in Canberra having a staff of four. Its professional staff consisted of 30 Community Development Officers (CDOs) and eight Regional Education Liaison Officers (REDLOs), based in areas of major Service family concentration throughout Australia. The role of these officers is discussed later in this chapter in the section on the Defence Community Organisation.

The Organisational Problem

As mentioned earlier, each Service provided a range of personnel support services to members and their families. The organisations involved were:

  • Army Community Services Organisation.
  • Navy Personal Services Organisation.
  • Directorate of Social Work Services-Air Force.

Both the Army and Navy bodies existed prior to Hamilton, and the focus of their work was the provision of advice and assistance to members and families, including individual counselling by professional staff. The RAAF body was created following the Hamilton Report, and carried out much the same type of work as the Army and Navy organisations, although it was restricted to social work and family liaison information functions.

The Hamilton Inquiry made it clear that need existed for a tri-Service information network, operating at the level of the community of Service families to address the social needs of the group within the community. ADFILS was created, and its officers attempted to coordinate as much as possible with the Service organisations. The proposal was discussed that the Service organisations should be integrated into a tri-Service body, and even that they be absorbed into ADFILS, as the Hamilton Report had in fact recommended. The 1990 edition of this paper questioned the effectiveness of maintaining 84 social workers distributed in four organisations which operated in virtual independence of each other, yet carried out complementary tasks in the provision of support to Service personnel:

The need for close collaboration between these organisations seems manifest. With 84 social workers (plus 51 FLOs) dispersed over a variety of bases throughout Australia, the coordination of policy, projects, the pooling of ideas etc. would be difficult enough in one organisation, but the segregation into four organisations, two of which are themselves decentralised in structure, would seem to make it virtually impossible. The tasks both at community level and at personal case work level are essential and complementary. To enable rationalisation of service, the avoidance of duplication and also the more effective bartering for resources, it is important that the move towards more effective cooperation mentioned above, and even eventual integration, proceeds steadily.(3)

But the feeling was that these organisations should be retained, as each, it was claimed, had a unique role peculiar to the needs of its Service. Thus the Review of Family Support Services, completed in mid-1990, reinforced the need for the most efficient use of family support assets and closer cooperation between the service providers, especially between ADFILS and the Service organisations, while at the same time maintaining the separate Service organisations.

The Pratt Report

In April 1994, the Defence Force Personnel Policy Committee directed that a review be undertaken with the aim of 'determining the organisational arrangements which will optimise the efficiency and effectiveness of the delivery of personnel and family support services in the ADF.' The review was carried out by Valerie Pratt, and the resulting report, released in September 1994, criticised many aspects of the system with its four separate organisations. As the concluding summary stated:

The ADF has all the ingredients for a very effective and enviable system of personnel and family support, but the system is divided, fragmented, lacks cohesion in some areas and is not conducive to economy of effort. More importantly it is confusing to the customer.(4)

The Review Team considered several options for coordinating the family support organisations, but eventually proposed integration of the social work organisation and the family liaison system. This integrated organisation was to be managed and resourced by a branch in HQADF, which would subsume the ADFILS organisation. The individual uniformed Service organisations, specifically designed to meet the individual needs of each Service, were to be retained.

Defence Community Organisation

The Defence Community Organisation (DCO) came into existence on 1 July 1996 as a result of recommendations following the Pratt Report. Add Defence social workers and family liaison officers previously employed by Navy, Army and Air Force together with the ADFILS organisation including its community social workers and regional education liaison officers were integrated into the new organisation. At the same time the Directorate of Social Work and Information Services-Air Force was disestablished. The Army Community Service Organisation was disbanded in early 1997 and a number of its staff were transferred to the DCO as Military Liaison Officers. It is expected some military staff from the Navy Personal Services Organisation (PSO) will eventually join the DCO as Navy Liaison Officers when the current functions of the PSO are transferred to other Defence organisations.

The DCO Headquarters in Canberra is responsible for the Spouse Employment Assistance Program, the Defence Employer Sponsored Childcare Program, the Defence Family Support Funding Program and the Family Information Network for Defence (FIND), each of which is described below. DCO Regional Offices are located in all states and territories, and local area teams are responsible for the delivery to ADF personnel and their families of a comprehensive range of social work, family liaison and education liaison support services and related programs.

Social Workers: There are approximately eighty social workers in the DCO undertaking a comprehensive range of social work services and management functions. In the regions the senior staff operate as regional managers or area coordinators in charge of a local team.

Family Liaison Officers (FLOs): There are approximately fifty FLOs who work within the local teams and act as a point of contact for Defence personnel and their families and assist with information on matters related to family and community life. They particularly help families with the settling in period following a new posting.

Regional Education Liaison Officers (REDLOs): REDLOs, located in each capital city and Townsville, have the responsibility for provision of educational advice and assistance in each region. They provide advice, referral and specialised assistance on educational matters to Australian Defence Force members and their families and policy advice to Defence on education matters that may impact on Defence families. They work closely with all levels of the education system in each state.

Family Information Network for Defence(FIND)

Based in Canberra as part of the DCO, FIND is an 1800 toll free telephone information service that allows Defence members and their families to have quick and easy access to information on Defence personnel matters and other areas of interest or concern. A copy of the information discussed can be sent to the caller if requested. FIND has an extensive data base, and inquiries to the staff of three are handled with complete confidentiality. Since its inception in March 1989, FIND has handled over 67 000 calls; in 1996 alone 10 128 calls were received, 11 658 inquiries answered and 917 sets of documents forwarded to callers. In 1997, up to 30 June, FIND had received 5202 calls, answered 6396 inquiries and forwarded information to 601 customers.(5) The main areas of inquiry in 1996-97 related to family welfare, education and study, removals and housing related issues. Consideration is being given at present to incorporating some of the other Defence 1800 helplines into the FIND service.

The Defence Family Support Funding Program

The Family Support Funding Program (FSFP) resulted from recommendations in both the Hamilton and Cross Reports. The FSFP is now in its ninth year of operation and to date grants totalling approximately $7.1 million have been approved. The primary objective of the FSFP is to provide grants to groups of Defence families to enable them to work together on a project or program that is beneficial to Service families. The program also aims to assist self-funded community groups with a project or service that specifically targets Service families and does not duplicate or overlap with existing services.

Since the inception of the FSFP there has been a vast expansion in the family support network. ADF families can now have confidence that when they move to a new location there will usually be a family newsletter, some type of community centre/neighbourhood house and a family support group offering a variety of activities for spouses and children. Many of these would not exist were it not for the FSFP. The FSFP funding ensures the existing infrastructure is maintained and that initiatives are encouraged which assist in diminishing some of the adverse effects which can be caused by mobility.

A funding allocation of $1.3 million was made available for grants for financial year 1997-98, in keeping with the Governments commitment to increase the funding for each major location from up to $20 000 to up to $50 000. After consideration by the tri-Service Advisory Committee, grants were approved to 261 individual groups totalling $1 026 242, an amount of $74 000 for the DSNSG conference and DSNSG IT requirements and $50 000 to cover the essential elements in support of the program. Thus the overall total of grants approved for 1997-98 was $1 150 242.

The Defence Special Needs Support Group (DSNSG) is considered as a separate entity for the purposes of funding. Twenty grants totalling $29 028 were approved-nineteen to local area groups and one to the National group. This funding will assist the DSNSG in a number of areas including administrative costs, training, resource material and membership to a number of special needs organisations. In addition to the individual grants to the DSNSG area groups, $60 000 has been allocated for the purchase of ten laptop computers, printers, associated software and extended warranty for use by the group and a further $14 000 has been allocated for the DSNSG conference to be held in early 1998. Thus a total funding allocation of $103 028 has been approved for the DSNSG.

Funding the DSNSG in this manner ensures that the group receives appropriate funding outside the competitive process in their local community and that the particular requirements of these families are addresses.

Major Issues

In the 'Service Family' chapter in the 1990 edition of this paper, three matters were presented as major family issues, urgently in need of attention-education (both of children and spouses), child care and spouse employment. It is pleasing that in the 1990s, policies have been developed and generally implemented for each of these areas. In this current paper, one addition is made to the discussion of these important areas-families with members with special needs.

With such issues, it is generally felt that the most appropriate support to offer spouses for difficulties arising from relocation is not financial compensation but other forms of non-cash assistance.

Problems in these areas emerge, of course, particularly as a result of posting. It is not surprising the 1995 ADF Census reported that members and families considered children's education, spouse education and employment, child care and the maintenance of personal relationships were the most difficult factors to adjust to in postings.

1. Education

The problem

In view of the competition for employment in Australian society, an increasing concern of all Service families has been the education of their dependants. However, it is often claimed the mobile nature of the Service life can have adverse effects on children's education. This is in addition to the developmental problems which some children may suffer when constantly uprooted. The most serious educational problems stem from the differences between State education systems in such areas as commencement ages, grade structure, availability of subjects, and the difficulties of transferring between different educational systems at certain crucial grades.

Until 1996, the main Defence support on the issue of the disruption of the education of members' children was through the Education Allowance and Extra Tuition Allowance. The Education Allowance (EA) paid portion of boarding fees and tuition fees to members on long-term posting in Australia who left their children in their present school or education system to prevent serious interference to the child's secondary schooling. But the EA Determination was very difficult to interpret, and gaining approval for the allowance was often a lengthy process. In addition it applied only to secondary students. As a result, the number of members utilising the allowance each year varied between 40 and 60, less than 1 per cent of members. Following the Hamilton Report, there was general agreement the Education Allowance needed broadening, and Extra Tuition Allowance (ETA) was introduced in 1987. ETA was aimed at alleviating short term educational difficulties experienced by ADF members' children following posting. The small changes made to the Education Allowance between 1986 and 1990 produced few additional recipients.

As mentioned earlier, Defence employs Regional Education Liaison Officers (REDLOs) to assist Defence families with education matters. There is a REDLO located in each State/Territory.

The Review of Education Assistance for ADF Children

In response to DIR suggestions (first made in August 1989) that Defence should undertake a comprehensive review of the Education Allowance before making further specific changes, the terms of reference for a review were finally issued in November 1994, and a working party was given the job of developing a framework for education assistance for ADF children. The Report on the Review was presented in November 1995, and virtually all the recommendations were subsequently approved. Only the key aspects can be given here of the new financial assistance scheme, called the Education Assistance Scheme, as it occupies twelve pages of INDMAN [0501], the Manual of Salaries and Conditions of Service for the Permanent Forces.

The principles which determine whether education assistance will be given are as follows:

  • Education assistance should preserve family unity wherever practicable and possible.
  • A member is responsible for ensuring his/her child receives a suitable education.
  • Education assistance should aim to avoid or minimise the disruption to a child's educational progress and emotional well-being caused by a Service induced relocation.
  • A member is responsible for his/her child's education-related expenses that would have been incurred had the Service induced relocation not taken place.
  • Government schooling is the norm for education in Australia. While a member may choose other forms of schooling for his/her child, the cost of such schooling would normally be met by the member, although on occasions education assistance for boarding situations will become necessary.

The main assistance falls into three parts:

  • 'Education Assistance in the New Locality' (EANL) provides financial assistance for a child to receive private tuition for a compulsory academic subject at any time during the first year at the new school. Assistance is also proposed to enable a student to study a subject needed for a chosen vocation 'through a distant learning centre'. The circumstances justifying EANL could, for example, be when a child, to maintain a sufficient standard in a subject, requires additional tuition that the school cannot provide; or when a subject essential to the child's career aims, or a service critical to the child's special needs, is only provided by a private school in the locality. The limit to the cost of the assistance varies with the need. For example, where a subject has been studied previously and is compulsory at the new school, the maximum assistance is $490, based on 14 one hour periods at a rate of $35 per hour. Whereas for a child with a special need attending a non-government school at the new locality, reimbursement of tuition fees may be to a maximum of $8741.
  • 'Education Assistance in Other Localities' (EAOL) allows members the option of placing a child in boarding school at the old locality, the next posting locality or a different locality. Assistance is generally confined to year 10, 11 or 12 students, and covers tuition fees and boarding expenses at a government or non-government school. The EAOL rates are payable in two parts: one to defray the cost of compulsory tuition fees and the other to defray the cost of board. Compulsory tuition fees can be reimbursed up to a maximum of $8741. The member must pay the first $1840 of boarding fees, but the costs can then be reimbursed up to a maximum of $8746 if the child is at a boarding school, or $5800 if the child is boarding privately.
  • Limited assistance, mainly with accommodation expenses, is available for students at tertiary level. The aim is to provide reimbursement for extra expenses incurred when the student has to leave home and find other accommodation because of the posting.

The new scheme, which came into effect on 8 October 1996, is certainly more comprehensive and flexible than the Education Allowance and Education Tuition Allowance, giving assistance for needs not covered by these earlier schemes, such as children with special needs, and much of the EANL area of need. The estimated cost of the new scheme does exceed the previous allowances, but not excessively. The 1994-95 cost of the existing scheme was $1.083 million, while the Report on the Review estimated the new scheme to cost an additional $1.283 million per annum, making a total annual cost of $2.366 million.

Defence is currently developing a case for payment of education assistance in situations where a pre-school age child (0 to 5 years) with special needs was participating in, or on the waiting list for, an early intervention program at the previous posting locality. Education assistance at the new locality would be payable until such time as the normal government-provided assistance is able to be accessed.

2. Employment of Spouses

Just as the two-income family is becoming the norm in Australian society, so a majority of the spouses of Service personnel seek jobs. Postings can lead to loss of a spouse's job and income and, especially for those spouses who lack qualifications, new employment can be hard to obtain. Even for those spouses with professional and semi-professional qualifications, barriers can exist to the portability of those qualifications from state to state.

The 1995 Spouse Employment Project Report summed up the problem as follows:

Many of these problems arise directly and indirectly from the mobile lifestyle of Defence families. Spouses typically experience lack of continuity of employment, periods of unemployment when they accompany their spouse on posting and significantly reduced sense of control over career development. The ramifications can include additional stress for the spouse and family, reduced self esteem, lack of security/reliability of two incomes, and reduced opportunities for training, promotion and accrual of the material benefits of paid employment (eg. superannuation and leave entitlements).(6)

Studies have shown the unemployment rate for Defence spouses as higher than the national average.(7)

Since the Hamilton Report highlighted spouse employment as a problem, a number of initiatives, many of them very useful, have been taken at various bases to assist spouses following relocation. However, these have been fragmented, and a major aim of the series of studies which have been carried out in the 1990s has been the creation of a comprehensive, coordinated, on-going program. It is acknowledged that any centralised system must always be balanced against the need for a local approach to cope with the significant regional variations which exist in employment availability.

While there have been reports of discrimination by employers against ADF spouses because of their likely short stay, the community trend to greater work mobility is making a three year stay quite respectable, and a 'posting tenure' could become an attractive prospect with some employers.

The following are the major studies dealing, at least in part, with spouse employment in the 1990s:

  • The 1993 ADF Family Mobility and Dislocation Study
  • The February 1994 KPMG Report on Options and Strategies to Improve Support for ADF Spouses in Obtaining Employment, which was commissioned as one of the initiatives resulting from the Family Mobility and Dislocation Study
  • The 1994 Report on the Review of ADF Personnel and Family Support Services
  • The May 1995 Evaluation Report of the Spouse Employment Trial (conducted in Townsville from November 1994 to May 1995). This trial, recommended in the KPMG Report, was a major initiative of the Spouse Employment Project which had been created as a result of recommendations in the reports of both the KPMG and the Family Mobility and Dislocation Study.
  • The 1995 Spouse Employment Project Report.

Some rejected projects

Following is a summary of two options considered, but not adopted, in the creation of a Spouse Employment Assistance Policy during 1996-97:

  • One recommendation of the Hamilton Report that was not implemented was the appointment of a Spouse Employment Officer at major Defence centres. The intended function of this officer was (a) to provide information on resources available and training in job search skills and (b) to work with local employers both to promote the benefits of employing Service spouses and match spouses with positions available. Use of such an officer was a successful feature of the Spouse Employment Trial in Townsville, and was recommended both by the NCGSF and in the 1995 Spouse Employment Project Report. However Glenn opposed the appointment of such officers arguing that assistance would be provided more cost effectively by contracting the tasks to national employment agencies. In 1996 a proposal similar to Glenn's was considered, but rejected, to contract the assistance task to a private firm which would act as Professional Service Provider on a national basis. This agency would have given training in job search skills, and developed a computer-based job matching program that would match the requirements of prospective employers with the skills and work expectations of spouses.
  • A suggestion put forward by several sources was to compensate spouses for relocation expenses, such as re-entering the work force, transferring in the work force or continuing with education in order to maintain or advance skills. A specific proposal was made in August 1994 to initiate a 'Spouse Employment/Education Relocation Allowance' of up to $1500. One reason for the rejection of this proposal was the potential cost-for example, a once-off payment for 30 000 spouses would cost $45 million.

However, a related proposal, initially put forward by Glenn, is currently being developed-a mobility allowance, which would seek to compensate for such stresses as disruption to schooling, to child minding arrangements and spouse employment, and movement away from the family and into arduous areas.

The current policy

The spouse employment assistance policy, which was adopted in February 1997 and is now generally in operation, has a self-help emphasis. There are two key initiatives:

  • The development of 'job clubs' for ADF spouses in locations where there is an expressed need. These would offer courses assisting job seekers to improve job search skills and provide practical experience in writing job applications and developing interview techniques. Similar 'job preparation' courses emerged as a popular and beneficial part of the Spouse Employment Trial in Townsville.
  • An important feature of the new policy is the establishing of 30 internet access points in selected areas for use by ADF spouses, enabling online searching for job vacancies Australia wide. A bulletin board service specifically directed to the needs of ADF spouses has been developed. Access will be available to the CES database (now part of the umbrella organisation Centrelink) and a range of sites which provide information about job vacancies; job applications can be entered on the system and e-mailed to potential employers; and resumes can be registered with employers to match against available positions. In each of the 30 locations at least two people have been trained to assist spouses with internet usage if required. Another need is to educate employers about the system to ensure they examine the internet to see what is available.

$500 000 has been contributed for 1997-98 for spouse employment assistance. It is hoped the policy implemented will be less expensive than, for example, the provision of individual case management through the external provider as in the rejected proposal described above. But the eventual cost of the rejected outsourcing proposal was uncertain, being dependent on the extent of spouse need. Indeed one defect of the adopted system is that, whereas outsourcing on a national basis would have allowed accurate measurement of the extent of the need for employment, this can not be clearly determined in the present largely self-help policy.

3. Child Care

The problem

A natural consequence of the trend to dual-career families and the higher incidence of single parent families is the increased need for child care services, and the rapid growth of this need in Australia has left the child care industry, at least in some areas, struggling to keep up. Although provision of child care is not considered a condition of service i.e. a service entitlement, the well-being of members and their families is integral to the efficiency and effectiveness of the ADF, and Defence cannot ignore the expectations of personnel, which reflect those of society. The existing Defence child care policy states:

Defence acknowledges that it has a role to play in assisting its personnel to meet their work and family commitments through the provision and support of child care services. Defence interest in child care aims to:

a. improve retention;

b. enhance recruitment;

c. reduce absenteeism;

d. increase productivity; and

e. improve morale, motivation and efficiency.

The child care need tends to be greater for the Service family than it is in the general community. Mobility through postings is more likely to lead to separation from the extended family, and the nature of Service life, with its additional duties, can lead to more frequent absence of spouses. However, just as there is considerable debate in the community concerning the responsibility of governments in the provision of this expensive service, Defence is currently attempting to determine the extent to which it should assist with child care.

The current program

On 8 March 1990, the Prime Minister announced that the work-based child care incentives available to private sector employers would be extended to Commonwealth and State departments and other public sector employers. Up to this point, Defence's assistance had largely consisted of financing child care projects through such schemes as the Family Support Funding Program, but in 1991 formal responsibility was taken for assisting Defence families to meet their child care needs, especially work-related needs. A Defence Child Care Policy document and the Defence Child Care Guidelines were prepared to direct the development of the Defence Child Care Program, which still operates. Defence currently sponsors 15 long day care centres and some places in six Family Day Care Schemes, which provide approximately 700 full-time places for children of Defence employees. Defence child care centres are required to meet State and Territory licensing regulations.

The extent of Defence funding provision for child care is as follows:

  • Since 1991, approximately $1 million has been made available each year for the construction of new centres. Three new centres are currently being established and will be completed by mid 1998.
  • A minimum of $1100 per licensed place per annum (broadly equivalent to the government funding to community centres which existed until 30 June 1997) is provided as operational subsidy to the centres. This is aimed especially to assist with equipping the centres and recruiting staff; the centres must run on a user pays system, with rates roughly equivalent to community rates. In 1996-97, the sponsorship cost Defence approximately $700 000 in operational subsidies. In addition, extra grants are paid on occasion to ensure the financial viability of some centres. It is expected that Defence operational funding of child care centres will soon be reviewed.

Until 1 July 1997, requests for funding were processed by the Defence Child Care Advisory Committee. From 1991 to 1996-97, approximately $8 million has been spent on Defence child care facilities, and approximately $2.9 million on child care operational funding. At present a research project is being undertaken in both Darwin and Perth, and until a report of the project is received, probably in December 1997, consideration will not be given to the setting up of new centres.

The Review of the Defence Child Care Program

In November 1995, a review of the Defence Child Care Program, which had then been in operation for nearly five years, was directed by ACPERS.

The review was required to maximise the benefits available to Defence from its investment in this program and to ensure that effective and efficient procedures are in place to enable provision of high quality child care services.

The Review commenced on 8 February 1996 and was completed in July. Some of the major findings can be summarised as follows:

  • Defence policy has been generally reactive i.e. it has relied on the initiatives of members and spouses to identify needs, prepare proposals and eventually manage centres. The result has been random development and has lacked the benefit of awareness of overall defence need. As the report states:
    Defence has not assumed the need for child care in areas, as it does for housing, and thereby established centres to meet that assumed need....A proactive stance on child care is required to adequately meet the needs of Defence personnel.
  • Defence has concentrated on the provision of long day care centres. While these are a basic need, other services, such as extended hours long day care, vacation care and emergency care, can be especially important for military personnel. In 1996-97, over $100 000 was allocated to support the establishment of new child care initiatives, other than long day care.
  • An immediate requirement is to find out the extent of the need for child care in each Defence area, and a major research project is underway with the aim of assessing this overall need. At present pilot studies are being carried out in Darwin and Perth. The Report quoted ADF 1995 Census figures to argue that, at present, Defence sponsors child care for only 3 per cent of the children of ADF personnel who indicated that they require child care. It does not follow, of course, that the remaining 97 per cent would be placed in Defence child care facilities if these were available at community rates.
  • Management of centres by parents has not always proved satisfactory, and it is necessary to work out who is to take responsibility at the various levels of decision making. The report strongly recommends that commercialisation of the child care program be considered, and points out that three organisations have expressed interest in running the Defence centres:
    These organisations are willing to pay Defence a fee to run the centres without operational subsidies, which must be far more cost effective than the current position of paying operational subsidies to all centres as well as paying extra grants each year to ensure the financial viabilities of less affluent centres.

    Government cuts to child care support in the last two federal budgets suggest community child care organisations, with decreased government assistance, will have difficulties maintaining the level of service previously provided.

    4. Defence Special Needs Support Group (DSNSG)

    This voluntary support group is a comparatively recent creation, beginning in October 1993 at RAAF Edinburgh with a small group of Defence families each of which had children with special needs, and becoming a Defence-wide organisation in 1994. There are currently over 550 families registered with the DSNSG, and 24 support groups established on bases throughout Australia provide information and assistance. A monthly newsletter is distributed, and a National Conference was held in May 1996, and again in May 1997.

    The term 'special needs' is defined broadly to include, for example, intellectual, sensory and physical disabilities, chronic illness or medical conditions, autism, epilepsy, speech and language disorders, learning difficulties and special gifts and talents.

    In Defence-and, indeed, the community at large-particular difficulties can be experienced when the family with special needs has to move, especially when the move is interstate. For many children with disabilities, for example, the very fact of changing schools can be extremely unsettling, and the unfortunate differences between State/Territory systems can impact severely on those with special needs. The DSNSG has worked with relevant Defence areas, and also with interested civilian organisations, in an attempt to ease the difficulties resulting from mobility. A major achievement has been to obtain agreement on such matters as the transfer of equipment between States and Territories, and access to necessary services in a new location according to relative need rather than position on a waiting list. This means a wheelchair, for example, can be taken wherever the family goes instead of being left at the state border, as occurred previously; and waiting list time is much reduced for the most needy families.

    In its brief history the DSNSG has sent submissions to numerous Defence and disability reviews, and has received several awards (e.g. the 1995 Australian Achievement Award) for its assistance to families with special needs. But from the point of view of Defence conditions of service, two points should be highlighted:

    • The DSNSG originated among ordinary Defence families, and developed, at least in its early days, purely by the initiative of its members. There is a significant message here for Defence personnel. Those families with special needs problems could have continued to utilise the existing Defence services for whatever support there was, but to have a number of unique, large scale problems resolved in connection with special needs, they needed to join forces and develop a unified plan of action. As society changes, new needs emerge. For example, thirty years ago, the need for child care and spouse employment services affected comparatively few families in Defence, but changed life styles and values in the community at large has turned them into major needs. It can be assumed that in ten years, changes will have caused new pockets of need to emerge. Defence, like any other large organisation, will not easily recognise and meet these needs, at least initially. The first requirement may well be for members to take the initiative and contact, meet and work with others who are experiencing the same difficulties. Quite apart from the mutual support such fellowship and exchange of information provides, the unity of purpose can help in the achievement of much broader aims.
    • It is interesting to examine the barriers encountered by the DSNSG in its quest to have needs met. Certainly there were early elements of inertia and conservative resistance, but generally Defence, with its comparatively new sensitivity to family needs (stemming largely from its concern to retain its experienced personnel), has been supportive. Nor has the major problem been resources-there are not large numbers involved in the Defence special needs area, and the prime needs are not financial. The major barriers have occurred in the mechanics of bureaucratic systems, especially in trying to obtain cooperation between the States, but also within States and between the Commonwealth and the States. Sometimes agreement can be reached at the highest level, as in the transfer of equipment across State boundaries, but it takes time for the change to come into force at the lowest levels, where it matters.

    Essentially the DSNSG is a volunteer organisation providing a self-help structure for interested families. Assistance for special needs matters is not a condition of service, but Defence as a good employer encourages the various activities of the DSNSG group, and provides support in a number of ways. Recently a new package of assistance provisions for families with special needs (FWSN) was submitted by the Stage 7 working group of Project Serving Australia. The package includes recommendations such as:

    • assist with accessing respite and therapy services, and special equipment
    • develop a procedure to enable Defence families to have their special needs status formally recognised
    • provide assistance to ensure access to appropriate accommodation
    • introduce a special needs pre-posting visit to access the availability of appropriate housing, therapy services etc.

    It is anticipated these measures will be approved and implemented by the end of 1997.

    Among the DSNSG's current projects is the preparation of some useful reference guides e.g. an Easy Reference Guide for Special Needs Families, giving information on disability services etc, and an Education Information Guide for Students with Special Needs. The latter guide will be produced initially for South Australia, but it is hoped it can eventually be done for other states.

    The National Consultative Group of Service Families (NCGSF)

    Background

    One recommendation of the Hamilton Report was that 'a National Consultative Group of Service Spouses should be established to act as a source of advice on the implementation' of the report's recommendations. An interim NCGSS met for the first time in October 1986, and it was soon decided there was an on-going role for a consultative group of spouses to advise the Service chiefs and Minister on issues affecting Service family life. The name NCGSS was changed after the October 1992 conference of the group to NCGSF-National Consultative Group of Service Families - to more accurately reflect the broadening scope of the group's interests.

    Organisation

    The structure of the NCGSF is at national, regional and area levels, with the convenor (based in Canberra) and the ten regional delegates-called national delegates-forming the National Committee. Essential costs of the NCGSF at national level are met by the Defence Department, although no salaries are paid to its national delegates, let alone to its 54 area representatives. The aim is to have an NCGSF area group in any area where there is a concentration of ADF families. Area group meetings are the grass roots level of the NCGSF, where families can bring issues. Area representatives will refer these issues to the national delegate if they cannot be resolved at an area level. Issues which affect families nationally are passed on to the convener, who will negotiate and/or lobby on behalf of families. The convener has an 'open door' arrangement with CDF and the Minister for Defence Industry, Science and Personnel. Membership of the NCGSF is free and open to partners of current serving members, as well as to serving members who are sole parents.

    Activities

    The aim of the NCGSF is to improve the quality of life for service families. This is done by:

    • providing a forum for their views
    • reporting and making recommendations to CDF

    influencing policy making that directly affects families Some of the more significant activities of the NCGSS have been:

    • Its submissions to, and evidence before, a number of inquiries, from the Cross Sub-Committee's inquiry into wastage in 1988 to, more recently, the Pratt Review, the Glenn Review and the Military Compensation and Rehabilitation Review.
    • Its efforts over the last decade to ensure that the needs of mobile families are recognised, particularly that the children of Service families compelled to move have a smooth transition when changing schools. The major problem is Australia's eight separate education systems, which causes difficulties whenever a family moves to a new state or territory. The NCGSF recently made an extensive submission on a national starting age for schools, and there is hope there will soon be changes towards a more uniform system.
    • Similarly, consultation with state governments resulted in a change of legislation regarding driving licences and car registration. Previously Service personnel had to change licence with each interstate move.
    • Recently the NCGSF has successfully lobbied on such matters as circuit breakers and smoke detectors for DHA houses, increased allowances for education, and an increase in the Defence Home Owner loan.

    Problems

    The NCGSF's unique contribution stems from its capacity to find out what is going on in families and communicate this information to the decision-making areas of Defence. And with virtually all its workers volunteers, this role is performed inexpensively. The convener is paid on a 20 hours per week basis, although the position requires full-time attention. National delegates receive sitting fees, a travelling allowance and are reimbursed for reasonable out-of-pocket expenses, but no other remuneration. The restriction in funding has one significant advantage, emphasising their independence from the Department. But there is a case for some increase in the small budget, which has remained locked on $60 000 for some years, even if only to index cost of living movements.

    The NCGSF has been very much a reactive group, acting on issues brought to the group by families. But there is a case for it being more proactive, attempting to anticipate problems, taking early initiatives which would help families to help themselves.

    The Future

    The Defence Efficiency Review (DER), presented in March 1997, has little direct impact on the Defence family. However, while there appears to be little or no reduction in resources, it can be expected that the special problems of the Defence family will worsen as the Reform Program is implemented. As Hugh Smith points out in an article in The Australian on 20 June 1997:

    The whole rationale of the DER was to put more people and resources at the sharp end. For younger personnel, in particular, this means more activities in the field, more exercises and more absences from family.

    Areas such as social work and child care can therefore expect more pressure.

    Pressures for change in the area of the service family will not cease. As conditions improve for families, expectations increase and demands are made for further improvement. Also Australian society continues to change and the needs of Service families will change correspondingly. It is in the ADF's interest to maintain a positive and progressive response to these needs.

    Endnotes

    1. 743 members, or slightly less than half the force, are married.
    2. Report on the Review of ADF Personnel and Family Support Services [the Pratt Report]. Defence, September 1994, p. 8.
    3. Conditions of Service in the Regular Defence Force. Parliamentary Research Service. Background Paper. November 1990, p. 37.
    4. The Pratt Report, p. 35.
    5. Australian Senate. Foreign Affairs, Defence and Trade Legislation Committee. Examination of Budget Estimates 1997-98. Defence Portfolio, Additional Information Received, Volume 1, September 1997, p. 195.
    6. The ADF Spouse Employment Project Report 1995. ADFILS, 1995, p. iii.
    7. ibid, p. 5.
    8. ibid, p. 25.
    9. Glenn Report, p. 154.
    10. The ADF Spouse Employment Project Report 1995, p. 33.
    11. ibid, p. 19.
    12. Report on the Review of the Defence Child Care Program. DCO, July 1996, p. vi.
    13. ibid, p. 20.
    14. Project Serving Australia is the name given to the process of implementing the recommendations of the Glenn Report.

    Chapter 7: Members Without Families

    Introduction

    As Graham Glenn points out in his 1995 report Serving Australia:

    Traditionally, the ADF has provided different assistance to members with families and those without families. The basic presumption is that single members should live in service accommodation on bases and as a consequence have limited personal belongings requiring removal. Married members have more choice and some assistance offered them is significantly greater, even disregarding the number of dependants.(1)

    For most of the 1980s single members could claim to be a neglected area of the ADF, as attention - long overdue, it must be emphasised-was given to married member housing and the needs of the Service family. However, some improvements were introduced in 1985 in connection with the ADF 'living in' policy, the Cross Report in 1988 devoted eleven pages to the particular problems of single members, and a series of reports in the 1990s exposed inequities in conditions of service between Members Without Families (MWOF) and Members With Families (MWF). The whole thrust of thinking at present is towards the alignment of policy for MWOF and MWF, especially in accommodation eligibility.

    Accommodation

    Accommodation and related matters has been the main issue in concern over MWOF. However, with the trend towards the alignment of conditions for MWF and MWOF, it is more logical to deal with the accommodation of MWOF in the following chapter in this paper, on defence housing. This present section, therefore, will be confined to a summary of recent changes in general conditions for MWOF. Many of the issues which have been raised over the years have now been addressed. Indeed all the beneficial provisions associated with the MWOF Report have been introduced. Of the more important issues, only those provisions which would adversely affect single members' interests remain to be implemented, such as the splitting of the rations and quarters charge and some anomalies in housing and charging for meals. These matters are discussed on pages 96-97.

    Recent changes

    The move towards alignment of policy for MWOF and MWF has taken place somewhat laboriously over the last decade. Increasing complaints on financial conditions of service for MWOF led to detailed examination of living in policy during 1988 to 1991. The trend in thinking was towards a common policy i.e. providing the same assistance in accommodation and removal/relocation to both MWOF and MWF. This inquiry led to the establishment of a MWOF Conditions of Service Review Team in May 1991 to develop a package of changes which would flow from a revised living in policy. The Review Team reported in 1992, and the new package of accommodation and relocation assistance provisions was approved by the DFPPC in September 1992. However, the matter was not given high priority, and nothing was implemented at the time.

    In 1995 the issue was revived, first with a report on living in accommodation by the Australian National Audit Office,(2) and then as part of Graham Glenn's general review of personnel policy in the ADF. On 10 December 1995, the then Minister for Defence Science and Personnel (Mr Punch) announced a package of changes resulting from the Glenn Review. These changes included more choice for MWOF and extended relocation and living assistance provisions. Most of the changes had been recommended in the Report of the Members Without Family Review, and were part of the general trend to more closely align the conditions of MWOF with those of MWF. The changes were effected by determination made under section 58B of the Defence Act and, as a result, MWOF are entitled to:

    • the Home Purchase or Sale Expenses Allowance i.e. reimbursement for expenses incurred when they buy or sell a house as a result of a posting requirement, providing they have entered into a written agreement to purchase a home on or after 10 December 1995;
    • removals of furniture and effects on a similar basis to MWF, including modified storage entitlements;
    • Disturbance Allowance at tiered rates depending on the number of previous removals and living arrangements in the old and new localities;
    • Isolated Establishment Allowance when living out by choice at eligible establishments, on the same basis as MWOF in receipt of LOA;
    • District Allowance at the unaccompanied living-out rate, when posted to remote localities and living out by choice.

    The above changes came into effect on 10 September 1996.

    Endnotes

    1. Glenn Report, p. 132.
    2. Australian National Audit Office. Audit Report No.25, 1994-95.

    Chapter 8: Housing

    Introduction

    The provision of adequate accommodation at reasonable cost for ADF members as they move from location to location is considered to be central to the success of the compulsory posting process. During the 1970s and 1980s, dissatisfaction with housing constituted probably the major conditions of service problem for most members. Although the severe problems have been resolved, Defence housing still has its problem areas.

    Defence is currently finalising a fundamental review of its housing and accommodation assistance policies. The purpose of this review is to bring together the results of a number of reports and surveys, both internal and external, which have been produced during the last five years. Detailed study of the topic has taken place, looking at such fundamental questions as what responsibility, if any, Defence has to provide accommodation assistance, and how such assistance should be provided. Consideration of the nature and extent of assistance has ranged across a spectrum of possibilities, from giving cash or an allowance to ADF members and allowing them to find accommodation on the open market to the other extreme of Defence owning and providing a large amount of the necessary accommodation at all its centres of activity.

    In view of the anticipated changes to policy resulting from the review, the early part of this chapter will be confined mainly to a discussion of some major issues involved. This will be followed by a more descriptive section on the Defence Housing Authority, an assessment of current deficiencies in Defence housing assistance, and a discussion of the two schemes which assist home ownership.

    The Nature of Housing Assistance Currently Provided

    Apart from assistance with home ownership, which will be dealt with separately, current ADF housing assistance consists of two elements:

    1. Physical provision of housing for single and married members; and
    2. Reduced rents for single and married members.

    Thus married quarters for families, provided by the Defence Housing Authority (DHA), are available on a subsidised rental basis under the Group Rent Scheme. A system of scales and standards, based on the size and quality of houses, is combined with an entitlement based on rank to determine the allocation of houses. For members housed to entitlement, rents paid range from $87.75 per week for a Private (or equivalent) up to $161.85 per week for a Colonel (or equivalent) and above. Members housed in sub-standard or deficient housing pay a lower rent.

    As yet, there is no formal agreement between the Department of Defence, the Department of Workplace Relations and Small Business and the Department of Finance on the appropriate level of the Defence housing subsidy, although all three Departments have expressed concern at the escalating cost of housing to Defence. Since 1988, the requirement for Defence to pay market rents for married quarters provided by the DHA has highlighted the escalating amount of the Defence housing subsidy and brought pressure not only to contain the level of subsidy, but to reaffirm the need and basis for any subsidy. Where suitable housing is unavailable, Defence provides Temporary Rental Allowance to assist families to rent on the private market.

    Single members who 'live in' pay a standard charge for rations and quarters, currently $9.80 per day for ranks up to Corporal, $12.10 per day for NCOs and $13.05 per day for officers. This charge covers three meals a day, and such things as electricity costs, the use of washing machine and dryer, and provision of bed linen and hand towels. Members living out pay for any casual meals at standard rates.

    Why Does Defence Need to Provide Housing Assistance for ADF Members?

    It is in the interest of any armed force to ensure its members are properly housed, fed and clothed. Accordingly, members receive an initial free issue of basic uniform, or an allowance in lieu. Some working dress may be exchanged when damaged or worn in certain cases. (See also 'Uniform Maintenance Allowance' on page 52). Housing has, however, proved over the years one of the most intractable of service conditions problems. The last decade has seen both an extensive improvement in housing for married personnel, and intensive examination carried out of fundamental aspects of the whole accommodation problem.

    Policy goals for the provision of housing assistance were first set down on 13 May 1985 following the report of the Government's Task Force on Australian Public Service and Australian Defence Force Housing Programs, and have been supported in such documents as the Inspector-General's Report in 1991 on ADF Living-in Accommodation, and the Auditor-General's Report in 1994 on Housing Assistance. The ADF's main need is to achieve its operational goals, and housing assistance is needed to support the mobility of ADF members who are required to relocate as a function of establishing and maintaining this operational effectiveness. As the May 1985 policy statement points out, there is a need to:

    • compensate personnel for housing related disabilities consequent upon frequent relocation where this is a required condition of service
    • provide adequate accommodation for personnel required in the course of duty to reside in locations where suitable alternative accommodation is not available, or required for essential operational reasons to reside at Defence Force premises
    • minimise financial disabilities, of personnel required to relocate frequently, which are due to inter-regional differences in housing costs
    • provide that a Defence Force member not be out of pocket from reasonable expenses incurred in changing houses, when required in the course of duty to undertake a discrete relocation
    • minimise housing related detriment to morale of personnel and families when personnel are required to relocate frequently, and hence to the operational effectiveness of those personnel.

    The 'detriment to morale' in the last point refers to such factors as the uncertainty and compromise which the very liability to relocate imposes on members' housing arrangements. Members' inhibitions on home ownership are indicated by the low proportion of home owners in the ADF relative to the rest of the community.

    Underlying much of the above are the Commonwealth's responsibilities as a fair employer. However, it must be emphasised that responsibilities in the accommodation area are shared, and that ADF members should expect to make a realistic contribution toward their ADF-provided housing.

    Principal Tenant Concept

    The Principal Tenant Concept (PTC) is relevant here. Under this concept, which apparently developed in the decades after WWII, Defence, as a responsible employer, accepts an obligation to ensure that an adequate supply of housing is available for sub-leasing to ADF members who are required to reside in locations to which they have been posted to meet Defence needs. It also agrees to minimise the financial detriment that members could suffer due to substantial differences in regional housing costs.

    This obligation to provide housing does not necessarily mean that Defence needs to own the housing, or even control it. In many locations all that may be necessary is to advise representatives of the local housing industry of the need and allow market forces to operate and satisfy demand. However, if Defence does have a degree of management control over the housing, it is better able to ensure that members are housed according to family needs and income. Direct control of the housing also avoids the seasonal fluctuation in prices that would occur when large groups of ADF families are relocating and searching for housing at the same time. It also minimises pressure on local housing markets when a unit is relocated to a new area, such as the Army's move to Darwin.

    The benefits of the PTC for members include security of tenure, no bond payment, rent paid fortnightly in arrears through the pay system, a generally responsive repairs and maintenance system and housing of a generally consistent quality. It also means that members have to expend less effort in searching for a home. Certainly the requirement to accept a 'company house' may be resented by some members, but there is no guarantee that dependence on the private rental market would produce more agreeable accommodation.

    For Defence, the primary benefits of the PTC relate to its importance in helping maintain the operational effectiveness of the ADF:

    • The availability of housing facilitates posting action, minimising the disruptive impact on families and consequent damage to member morale
    • The impact of relocation on members' operational effectiveness is minimised in that less time is required settling in at new locations.

    The disadvantages include:

    • The administrative overhead necessary to manage housing diverts resources away from other military tasks
    • The cost of vacancies is borne by Defence.

    In 1987, Defence developed a formal position on the PTC which it used as the basis for rejecting a Department of Finance proposal to introduce a cash housing allowance. In 1989, the Defence Force Pay and Conditions Committee formalised the PTC as Defence policy.

    How Should Defence Provide Housing Assistance?

    Given there are sound arguments for Defence providing housing assistance, what form should this assistance take?

    What kind of assistance do members need?

    There are certain obvious needs which come at the time of moving, and a number of allowances exist to assist members with the costs associated with relocation. The chapter on Allowances should be consulted for details of the following relevant allowances:

    • Living Out Allowance
    • Home Purchase or Sale Expenses Allowance
    • Temporary Accommodation Allowance
    • Disturbance Allowance
    • Temporary Rental Allowance

    Earlier in the paper, mention is made of Glenn's proposal to introduce a new allowance, a 'Mobility Allowance', which he suggests should be paid on the occurrence of each move with the threefold aim of providing an incentive to relocate, compensation for the turbulence experienced, and recompensing for certain costs associated with the move. Glenn suggested the current Disturbance Allowance would form the third component of his proposed new allowance. The concept of an incentive element was rejected by the Pay Structure Working Group in 1996.

    Probably the most troublesome financial burden faced by personnel who are required to relocate frequently results from regional differences in housing costs. It is accepted that Defence should meet the additional costs of housing attributable to these regional variations.

    Most people find moving burdensome, with the requirement to pack belongings, leave friends and familiar surroundings, and resettle in another house in a different locality and form new contacts and friends. This is obviously a disability consequent upon compulsory and often frequent relocation. But Defence personnel face other less tangible housing related disabilities. For most members, life in the ADF consists of occupying a series of houses on a temporary basis, often without knowing just how long these arrangements will continue at each posting locality. It is clear that ADF members are not able to establish a home with the same degree of permanency enjoyed by most of the civilian population. This uncertainty of tenure obviously is a key factor in the lower rate of home ownership among Defence personnel as compared with the rest of the community. Uncertainty of tenure can also cause them to compromise on their housing-for example, to purchase a lower value home than they otherwise would due to their uncertain time horizons. Thus members incur housing related disabilities as much from the liability to be relocated as they do from the actual act of relocation.

    It has been accepted that members should be compensated for these disabilities, but there is some disagreement on how this compensation should be given. At present it forms one portion of the rental rebate paid by Defence, the other portion covering costs due to regional housing variations. This has the advantage for Defence of administrative simplicity, but it remains unclear how much is compensation and how much covers regional variations. One proposal has been that a cash allowance be paid to all Defence personnel to compensate them for these housing related disabilities. This would have the advantages for members of transparency and of being easily reviewed, and would allow members flexibility in the spending of this disability payment. For Defence there would be savings from a reduction in fringe benefits tax. The main disadvantages would be, first, the additional cost to Defence of paying the allowance to the 7000 singles at present living out and the 6000 home owner-occupiers, none of whom are receiving rental rebate, and therefore compensation. The second disadvantage would be the necessity to determine an amount for compensation and remove it from the current rental rebate, causing an increase in the rental contribution at present paid by members.

    For many people, one nuisance associated with moving is the responsibility of finding satisfactory accommodation in the new location. Many members therefore find the provision of a house from the DHA's stock a real convenience.

    On the other hand, a significant proportion of members would prefer to choose their own accommodation, providing they could still receive a subsidy for their rental payments. Ideally therefore a balance must be found between the requirement to use Defence housing and allowing freedom to find one's own accommodation.

    While Defence's chief responsibility is to achieve its operational goals, it is clear that effective attainment of these goals, together with Defence's role as a responsible employer, requires sympathetic consideration of the above needs in order to build an efficient and loyal force.

    Why not provide cash and let members find their own accommodation?

    This assistance scheme, which would have the advantages of maximising flexibility for members and reducing administrative complexity and eliminating fringe benefits tax for the ADF, has been recommended by both Glenn and the Auditor-General. This option assumes (a) the amount of the allowance would be equivalent, after tax, to the existing housing assistance, and would vary with locality (b) all off-base defence housing would be sourced adequately from the private residential market.

    However, there are several disadvantages which probably make it unacceptable to Defence. First, many members would undoubtedly regard the loss of guaranteed housing availability, and the consequent need to devote time to locate housing, as a real inconvenience. In addition, providing all members with such a cash allowance would mean, in effect, that Defence would be funding a house purchase for those members who chose to use the money in this way. Savings for Defence would be dubious; 6000 current home owner-occupiers and 7000 singles who live out would be entitled to the cash payment although they do not at present receive assistance through the rental subsidy.

    To introduce a cash payment system would be to ignore the tangible and intangible benefits enjoyed by the ADF in having an employer managed housing system as part of its personnel policy strategy supporting the operational effectiveness of the ADF.

    Should Defence provide the entire stock of housing?

    This proposal, largely the converse of the preceding option, assumes that all housing needed to support member mobility is provided by Defence. Members would still be free to make their own housing arrangements if they wished, although without ADF assistance. The proposal would have the advantage for members of guaranteeing housing in every locality, with security of tenure. But it minimises choice for members, and does not guarantee that the housing available will be appropriate to members' requirements. However, the big disadvantage of this option would be for Defence. The scheme is inflexible in not allowing effective response to changing demands for housing in individual locations. This could result in shortage of housing in some new locations and an over-supply of housing in other locations with increased cost to Defence.

    The two options just discussed are at opposite ends of the spectrum. Both have serious disadvantages, and it is clear a satisfactory housing assistance policy must lie somewhere between the two, observing the responsibilities inherent in the Principal Tenant Concept while allowing members adequate flexibility of choice. The task has been to find a cost-effective balance.

    Should Members With Family (MWF) and Members Without Family (MWOF) Receive Different Housing Assistance?

    Traditionally, accommodation assistance policy for MWOF has differed markedly from that for MWF. Whereas most MWF live off-base with the rental costs of DHA housing subsidised by Defence, an assumption underlying MWOF accommodation assistance policy was that it was compulsory for these members to live on-base unless approval to live-out was given on compassionate grounds or due to lack of on-base accommodation.

    Although the compulsion for MWOF to live-in was relaxed in 1985, their conditions of service are still based on the assumption that they will normally be required to live-in. This results in the following major differences in the accommodation assistance packages for MWOF and MWF:

    • MWOF are provided with subsidised on-base accommodation and meals, but MWF are provided with subsidised housing only;
    • In the event of a relocation, MWF are entitled to full removal of all furniture and effects, whereas MWOF are entitled to removal of personal effects only;
    • MWF are entitled to a much larger disturbance allowance than are MWOF;
    • MWF do not receive accommodation assistance if they own a suitable house at the posting locality, whereas MWOF are still eligible to receive subsidised on-base accommodation and meals.

    When a MWOF receives approval to live out, Living Out Allowance (LOA) provides for the member to be reimbursed for food, utilities and laundry as well as rent, whereas MWF receive subsidised housing only. In addition, MWF are not eligible for housing rental assistance if they own a suitable home in the posting locality, but a MWOF who owns a suitable home is still able to receive LOA.

    In the 1970s and early 1980s, the main housing complaint was by married personnel due to the poor standards of their accommodation. The establishment of the DHA in 1987 began to rectify this problem, and attention turned to the singles. In the years 1988-1993, $236 million was spent on upgrading barracks accommodation, generally beyond Service Scales and Standards, which was last revised in 1972. But in the absence of a current policy, this investment served to increase the significant inconsistencies of standards already existing among Defence establishments. Reports completed in the 1990s, such as the Members Without Family Review Report, the Auditor-General's Audit Report No.25, and the Glenn Report generally agree that MWOF are subject to the same or similar housing related disabilities as MWF, and that differences based on marital status should be removed. While this would give Defence the responsibility of providing rental assistance to 7000 singles at present living-out, there would be certain savings. For example, MWOF living on-base at present do not have to pay for fuel, light, power and laundry facilities. That is why single members in receipt of LOA also receive a utilities element which reimburses costs associated with the provision of these things. If differences due to marital status were removed, a charge for these utilities would be levied to ensure MWOF contributed to these costs as do married members.

    Early Housing Problems

    Over a period of some 20 years, housing problems developed to the point of becoming a major source of dissatisfaction in the armed forces. A number of surveys made it clear that poor housing had contributed significantly to poor family morale in the Services, and was a major cause of retention problems experienced by the ADF. As has been pointed out earlier, the expectations of Service families for 'quality of life' matters reflect those of the wider community; consequently, families have become increasingly unwilling to accept sub-standard housing, education and the like. Thus, during the separation crisis in the mid-1980s, the ARA's No. 1 Psychological Research Unit's report in September 1987 on officer resignations found that 68 per cent of those questioned listed a desire to live in their own home as a reason for leaving the Army, while 42 per cent cited the poor standard of Service quarters as an additional factor in that decision.(1)

    Among the many problems raised in submissions to the Joint Committee inquiry on personnel wastage in 1987-88 were, for example:(2)

    • The sub-standard homes provided by State Housing Authorities (generally described as 'welfare housing'). During the 1950s, when housing acquisition was necessary to meet the needs of personnel posted to newly-established bases in areas where a private rental market was lacking, the States had been tasked with supplying houses to Defence on long term leases through a series of Commonwealth State Housing Agreements. By the 1970s and 1980s, the standard of this housing had generally fallen well below that of the general community;
    • Housing located in 'welfare' areas, with a concomitant high level of crime and vandalism (a particular problem when serving spouses are frequently absent);
    • Inadequate and slow maintenance, and inadequate security;
    • Poor fittings;
    • No floor coverings or curtains;
    • Few quarters which meet specified scales and standards;
    • Inadequate storage areas.

    The Defence Housing Authority (DHA)

    Government concern at widespread dissatisfaction with Defence housing led to the establishment of a Task Force to investigate and report upon the housing circumstances of Defence personnel and their families, and to make recommendations for improved methods of providing housing.

    Following the Task Force report in 1985 and observations carried out in the field, the following facts came to light. Of the total stock of some 23 500 houses:

    • some 6000 Defence houses were below acceptable standards and, not being suitable for renovation, required replacement;
    • a further 6000 houses required substantial improvements to bring them to acceptable standards;
    • many of these, and other Defence houses, were poorly located and no longer met the operational and social requirements of a modern Defence Force;
    • the bulk of the houses (14 200) were owned by State Governments under the Commonwealth State Housing Agreement (Servicemen) and as a result,
      • the repairs and maintenance function was not under Commonwealth control;
      • without equity in the stock, the Commonwealth was unable to trade the houses to meet changing operational requirements.(3)

    On 30 January 1986, the then Minister for Defence, Mr Beazley, announced:

    • a Defence Housing Authority operating as a Statutory Authority was to be established to manage the total Defence Force housing stock; and
    • an expanded funding program of more than $750 million (in 1986 dollars) during the next decade to bring the current stock of housing up to standard.

    The Defence Housing Authority Act 1987 established the Authority, which commenced operations on 1 January 1988.

    The DHA engaged in a program of disposing of the large number of sub-standard houses and the acquisition, by purchase, lease or construction, of replacement housing. Agreement was reached with the States to renegotiate the Commonwealth State Housing Agreement (Service Personnel), enabling the sale or return to the States of the CSHA(S) houses.

    Achievements of the DHA

    1. Fall in sub-standard stock.

    The achievements of the DHA are best shown by statistics, for example in the reduction which has taken place in sub-standard housing:

    Table 3: Quality of Houses Under Management

    
        

    Year

    Good Quality Owned

    Good Quality Leased

    Below Standard Owned and Leased

    Leased Out to the Private Sector and Vacant Stock pending disposal

    1986

    5165

    0

    18298

    0

    1987

    6081

    0

    16971

    0

    1988

    7211

    0

    16383

    0

    1989

    8299

    0

    15072

    445

    1990

    9348

    157

    13585

    890

    1991

    10079

    1518

    11481

    1335

    1992

    11216

    3072

    9186

    1558

    1993

    12201

    5059

    6647

    1781

    1994

    12873

    5908

    3577

    1861

    1995

    14317

    5622

    1173

    2330

    1996

    14818

    5215

    600

    1517

    Source: Most of the statistics in this section have been compiled from DHA Annual Reports. Some have been obtained directly from DHA.

    In the decade preceding the establishment of the DHA, only small reductions were made to the large number of below standard houses. However, as can be seen from the above table, in its first nine years, from 1988 to 1996, this stock of sub-standard Defence housing had virtually been disposed of.

    This disposal program has been matched by an equally effective acquisition program. In the nine and a half years, 1 January 1988 to 30 June 1997, 6384 houses were constructed; 4181 purchased from the existing market; and 8075 leased i.e. a total of 18 640 community standard houses have been brought into the housing stock. The total housing stock managed by the Authority at 30 June 1997 was 21 330, including:

    Stock owned by Authority              11 895                                
    On-base housing                       3293                                  
    Houses leased                         6142 
    

    2. Repair and maintenance

    A major complaint over the years has been inadequate repair and maintenance, and one of the early decisions of the Authority was to establish a system of highly decentralised management to provide an efficient responsive service to DHA tenants and their families. By 30 June 1990 a regional network of 24 Housing Management Centres (HMCs), covering each State and Territory, was operating. Tenants can thus report problems directly to HMCs rather than through the military command structure. Since 1990, the structure and location of these HMCs have varied to meet changing circumstances.

    3. Tenant Satisfaction

    Tenant satisfaction with new DHA houses has remained high since the commencement of operations. The latest figures available, for acquisitions during the year ended 30 June 1995, show 50 per cent of tenants as satisfied with the DHA housing, 34 per cent very satisfied, and only 6 per cent dissatisfied or very dissatisfied (10 per cent were neutral). Figures from other years have been similar.

    Satisfaction with maintenance work has also remained high, with 42.1 per cent satisfied, 27.6 per cent very satisfied, and only 16.2 per cent dissatisfied or very dissatisfied with maintenance service provided in 1996 (14.1 per cent were neutral). Actually these figures, while still impressive, show some decline from earlier years, reflecting the fact that service personnel are becoming accustomed to good quality housing and correspondingly more discerning of detail. Any sustained decline in satisfaction rates, however, could be cause for concern and review.

    Recent Trends

    Leasing

    While leasing was employed from the start of DHA operations as a method of acquiring new stock, the main emphasis initially was on purchase or construction. But the need to replace sub-standard stock rapidly and the limited funds available made increased leasing necessary. The general procedure has been to construct housing to meet DHA's requirements and then to sell this to investors with long-term (5 years or 10 years) DHA lease commitments i.e. there is a change of ownership, but Defence retains occupancy.

    Unfortunately early lease arrangements had several problems:

    • The inflexibility of the 5 or 10 year terms were a problem when a tenant was posted after, for example, 9 years of the lease had elapsed. Very often the house would remain vacant for the remainder of the lease.
    • At first rents had been indexed to the CPI. During the early 1990s market rents fell in some places e.g. Melbourne, but the DHA lease required the rent to gradually increase with the CPI. Thus Defence was left paying rents that were too high.
    • Early leases stipulated that the DHA would do any maintenance work costing less than $500, with the owner responsible for maintenance above this cost. This often led to delays for the more costly work.

    Faced with these difficulties, in 1996 the DHA developed a new leasing arrangement which avoided the above problems.

    • The new lease (nominally for 6 or 9 years) provides for one year flexibility in the eventual term.
    • The new leases are set at market rents, and are revalued every year.
    • In return for an increased management fee charged to owners, the DHA is committed to recarpet and repaint for a 9 year lease, or repaint internally for a 6 year lease.

    The more satisfactory leasing contracts have made the 'sell and lease back' arrangement an attractive option which will be increasingly utilised by the DHA where feasible. On 30 June 1997, 6262 houses from the total DHA stock of 21 330 were on lease.

    Joint Ventures

    Whereas leasing is an increasingly favoured method of acquiring stock, the move into joint ventures, which began in 1989, will not be continued, and four of the DHA's eight joint ventures are at present being wound down. However joint ventures did achieve their early purpose, helping to solve the large stock replacement task which resulted from the return of CSHA houses. A major problem with entry into joint ventures has been that the DHA thus became locked into a rigid long term project which lacked the flexibility required for the provision of Defence housing.

    DHA Finances

    Soon after its creation, the DHA realised the $750 million investment, promised by the Government over the ensuing ten years, would be insufficient to meet the cost of quickly replacing the CSHA houses, and in 1989 the DHA was given permission to borrow a further $250 million from the private sector. On 30 June 1997, the DHA was left with liabilities of $405 million, of which $159 million was Commonwealth debt and $246 million due to private sector borrowings. The DHA's strategy is to repay this debt as quickly as possible. However, the DHA makes only a small profit from its operations, and its houses have to be provided to Defence within market rent. This makes income from the 'sale and lease back' option an essential part of its financial strategy in order to fund new Defence requirements arising in such locations as Darwin.

    Criticisms

    Although it is generally agreed that the DHA initiative has been highly successful in renewing Defence's largely sub-standard stock of housing-and thus resolving what was probably its most serious conditions of service problem-a number of criticisms of DHA operations have been made from time to time.

    • On 30 June 1997, the DHA's total assets were approximately $2.2 billion, and the Government has been concerned at Defence owning this large amount of housing stock. Privatisation has been unofficially under consideration for several years. There are two ways of privatising this asset:
      • An attempt could be made to sell in bulk, but problems here are, first, finding a large investor interested in what would be a low-return investment, and, second, the distinct disadvantage that almost certainly the stock would need to be sold at a significant discount.
      • The second approach is the gradual sale - largely combined with lease-back-which is being carried out at present. Each year the housing stock is reduced by sales to the most logical investors, the ordinary families, who appreciate the security of the long-term lease and will pay a reasonable price.
    Several sources have proposed that the provision of housing by Defence be replaced by the payment to personnel of a housing allowance and requiring them to find their own housing on the private market. Apparently the Department of Finance is particularly attracted to this option, although there are strong arguments against it in Defence, as mentioned earlier.
    • The Auditor-General's report in 1994 made several criticisms. For example, it was pointed out there had been a fall in the number of Group A houses, Defence's basic level accommodation for lower ranks, and that, as a result, a number of these personnel had to be placed in Group B houses. But they still paid rent at Group A level which meant the Department had to repay a larger proportion of the rent to the DHA. The DHA's response to this has been that houses of Group A standard are not in community demand and are thus not commercial propositions for resale. The DHA sees the problem as arising largely from Defence's rigid classification system.
    • Another Auditor-General's criticism was that the amount of rent paid to the DHA in the five years to 1993-94 had increased in real terms by 33 per cent. The explanation for this lies in the quick replacement of sub-standard by higher quality houses that was taking place during this period. With the upgrade of the housing stock largely accomplished, the total rent has stabilised over the last few years.
    • The Auditor-General had some criticisms of the leasing program, claiming that rental costs for leased stocks were higher than for DHA-owned houses. But these problems largely sprang from the early leasing contracts. For example, indexed leases and the 5 per cent management fee levied on Defence have both now been discontinued.

    Australia's military forces, at least its married members, are regarded as being among the best housed in the world, and some have queried whether the quality is too good. In response it can be argued that, at a time of increased work mobility, Defence needs attractive conditions of service factors, such as good housing, to help retain personnel. Also it must be realised that the standard of housing is rising in the community, raising expectations among existing and potential Defence personnel.

    Defence HomeOwner

    In 1990, the DHA successfully bid for the administration of the new Defence home ownership scheme, Defence HomeOwner (more precisely known as the ADF Home Loan Assistance Scheme), details of which will be discussed later. The Authority manages the scheme on a fee-for-service basis on behalf of the Department of Defence. It has two main functions, the issue of Entitlement Certificates, and the payment of the subsidy to the National Bank on behalf of Defence.

    Given the efficiency of its service in managing this scheme, it is possible the DHA could take over other housing-related activities should they become available.

    Deficiencies in Current Housing Assistance

    1. A major defect is that rental assistance provided to single and married members of the ADF is currently subsidised at different levels. Thus, whereas the Joint Department of Defence and Department of Industrial Relations Working Party decided in February 1993 to reduce the rental subsidy for married members from 59 per cent to 50 per cent over a period of five years, the policy for single members was not altered. The Auditor-General's reports highlighted anomalies and inequities which have arisen from differences in current married and single member housing and relocation assistance policies. Revised Member Without Family policies, agreed by the Chiefs of Staff Committee on 31 May 1995, were designed to remove most of these anomalies and inequities, and to create a common policy base for the future provision of assistance to all ADF members. Recent initiatives extended entitlements for access to full removal and storage, Disturbance Allowance, Home Purchase or Sale Expenses Allowance, Isolated Establishment Allowance, District Allowance and Temporary Accommodation Allowance to single members. As a consequence, a common policy base for relocation and living assistance entitlements was created for all members of the ADF. This initiative has further highlighted the need to align the policy bases for the provision of housing assistance to both married and single members to create a common and equitable assistance package for all ADF members.

    Anomalies resulting from the Living Out Allowance (LOA) for MWOF, mentioned on page 88, have received attention in both the Audit Report on Living-in Accommodation and the MWOF Report. The general recommendation has been that MWOF be given an allowance that provides assistance only with rent, and not when the member owns a home in the locality. In other words, when housing issues are resolved, MWOF will no longer have an entitlement to LOA but, when service accommodation is not available, will have an entitlement to rental allowance on a similar basis to MWF.

    2. A major barrier to the alignment of policy bases has been that the rations and quarters charge has not been divided into separate components. The current ADF Rations and Quarters Charge (R&Q Charge) system was introduced in July 1973, after recommendation in the final report of the Committee of Inquiry (Kerr/Woodward Report). The combined R&Q charge was to be levied where members were provided with their meals and accommodation by the Services. No attempt was made to quantify the two elements of the R&Q charge, and although Defence has reviewed the charge biannually, consequent adjustments have been made only on the basis of movements in the food group component of the CPI, i.e. movements in accommodation costs have never been a factor in the review process. As a result, the R&Q charge has lost its validity as a realistic measure.

    The Member Without Family Review of August 1992 recommended splitting of the charge which would enable alignment of MWF and MWOF accommodation and housing subsidies. On 31 May 1995, the Chiefs of Staff Committee agreed, subject to Ministerial endorsement, to implement the Review recommendations. Splitting the R&Q charge will also have two other benefits:

    • It will permit the application of rental charges which are appropriate to the actual standard of accommodation occupied. This is important as reviews have revealed that, unlike married members' accommodation, a large proportion of ADF living-in accommodation is sub-standard.
    • It will also permit implementation of the Pay-As-You-Eat/Discounted fortnightly Food Charge system recommended by the Member Without Family Review Report and remove the requirement for single members to pay for meals which they do not consume, a major irritation for members who currently occupy living-in accommodation.

    In the absence of any precise method to accurately split the R&Q charge, an arbitrary split, possibly on a 50/50 basis, will be necessary to provide a benchmark amount for use in introducing a uniform housing assistance package.

    3. Current ADF housing rental assistance policies constrain choice of dwelling by linking entitlements to rank, family structure and the availability of ADF provided housing. The March 1995 Auditor-General's Report on ADF Housing Assistance recommended that Defence allow members a greater degree of choice in the type, cost and location of housing they occupy. In addition, the Glenn Report also advocated the widening of choices available to ADF members, and specified the cashing out of housing and accommodation subsidies and permitting single members to live out with subsidised accommodation assistance as two methods by which choice could be widened.

    4. The 1994 Auditor-General's Report on ADF Housing Assistance commented on anomalies which result from the incorrect administration of current classification standards for ADF married quarters contained in the Standards for Defence Force Married Quarters within Australia 1990 As Amended (SMQ90). Some of these criticisms have been discussed earlier in the section on the DHA, but one direct criticism of SMQ90 was that the current classification scheme fails to identify extra bedrooms and ensuites as additional amenities, resulting in an insufficient recovery of costs from members.

    5. Although around 95 per cent of the current stock of married quarters is up to community standard, it is agreed that the majority of Defence living-in accommodation is lacking the basic amenities, such as living space and storage facilities, which are provided in similar single person long-term rental accommodation in the general community. The Inspector-General's January 1991 report on Living-In Accommodation identified a number of deficiencies, including the following:

    • The provision of barrack style accommodation is inappropriate for a large proportion of single members.
    • Living-In Accommodation Scales and Standards, particularly with regard to room size and storage space, are inadequate and in need of review.
    • Promotion of a more widespread application across the Services of the liberalisation of on-base lifestyles, along the lines of the Chief of Naval Staff's Operation Lifestyle, is warranted.

    The unpopularity of barracks accommodation is shown by its under-utilisation. The Inspector-General's report noted an Australia-wide vacancy rate in excess of 50 per cent, while the 1995 ADF Census revealed that about 7000 single members have chosen to live out without any form of assistance rather than occupy available living-in accommodation. Of these, only some 1600 occupy their own homes. The current living-in accommodation vacancy rate is approximately 43 per cent.

    Defence Facilities have advised it would cost $500 million to bring sufficient accommodation for all living-in members to an acceptable standard, and $1250 million to bring this accommodation to recommended long-term standard. However, it does seem that social trends to greater mobility and independence conflict with the requirement to live on base. The following extracts from Glenn sum up the situation:

    The lifestyle of most young single ADF members today is not consistent with living on bases, the majority of which are isolated from those activities and interests they enjoy....It became clear to us during our discussions that while a high standard of accommodation may encourage more members to live on base, no matter how good that accommodation, members want choice and 'a place of their own' where they can get away from the work environment....Accordingly, if the ADF needs to provide living-in accommodation, members' needs would be more closely met if it were provided where the majority of them would prefer to live-that is, in the community, not separate from it....Alternatively, where members are not required to live on base for operational reasons, it may be more cost effective to pay them an accommodation allowance and allow them to live in the community....That is not to say that living-in accommodation is not required on bases; it would be needed for those that choose to live in, for trainees, for transit accommodation and for exercises and contingencies.(4)

    It can be expected that the number of MWOF living off base will steadily increase. Not only will this accord with social expectation and preference but it will ultimately be more economic for Defence, reducing the need to provide barracks accommodation.

    Home Ownership

    Although Defence has schemes to assist members to purchase their own home, the current policy is to neither encourage nor discourage serving personnel from owning a home. There are arguments for and against: on the one hand, increased home ownership can:

    • improve the level of family stability and decrease dissatisfaction with defence housing, hopefully leading to better workplace productivity;
    • reduce Defence's housing requirements.

    On the other hand, the disadvantages for Defence of increased home ownership are:

    • a tendency to limit the availability of personnel for postings, inducing a greater reluctance to relocate;
    • a likelihood of more personnel being remote from the workplace, by exercising freedom of choice to acquire housing in such locations.

    The existing schemes assisting home ownership, the Defence Service Home Loan and the ADF Home Loan Assistance Scheme, have not significantly encouraged home ownership by serving personnel. Ownership among members appears to be low, with a general tendency to defer purchases until after separation from the ADF, when posting turbulence is finished and the DFRDB or MSBS lump sum is available. One fact which was mentioned in the earlier chapter on the 'Service Family', the instability of employment for Service spouses due to posting, reduces the confidence of both the member and the lending institution to enter into a large financial commitment.

    Defence Service Homes Scheme

    Background

    The War Service Homes Scheme was established in 1919 to assist those who had served overseas during the First World War to resettle themselves in civilian life. The scheme's benefits were subsequently extended to include those who served, or were appointed or enlisted to serve, overseas in the Second World War and later conflicts. By March 1969, its 50th anniversary, the scheme had provided over 280 000 homes-nearly 10 per cent of total Australian housing stock-and 20 years later the figure was more than 400 000. During the high point of the scheme, the 1950s, an average of over 14 000 homes each year were provided.

    From December 1972, the scheme began to be seen as part of the Defence Forces' conditions of service rather than as a repatriation measure. In order to attract and retain regular Service men and women in an all volunteer force following the abolition of conscription by the Whitlam Government, the benefits of the scheme were extended in December 1972 to all members of the Defence Force who completed 3 years full-time service.

    It soon became apparent that the increased demand could not be met immediately from available appropriated funds. Accordingly, in order to keep within budget limits, a waiting period of around 11 months on all applications for assistance to buy an existing property was introduced in 1975. On 17 August 1977, largely in an effort to encourage personnel to continue in the forces, the qualifying period was increased to six years. From 1975 into the 1980s the number of successful applicants each year remained constant at around 4500 to 5500 and a waiting period of about 10 months remained until 1989.

    The erosion of the value of the loan, which had been at a maximum of $25 000 since 1980, led the Government in its May 1985 Economic Statement to seek the involvement of the private sector in the funding and operation of the scheme. On 11 October 1988 the Government announced that Westpac Banking Corporation would buy the existing loan portfolio at a face value of $1.38 billion, plus a premium payment of $85 million.(5) Westpac began accepting new loan applications on 19 December 1988, and transfer of existing mortgages was completed on 30 June 1989. The effective concessional interest rate on a loan of $25 000 remained, as before, at 6.85 per cent, with the Government paying Westpac the difference between the concessional rate and the agreed market rate. For Defence personnel, the most important benefit of the new arrangements was the removal of the long-standing 10 month waiting period for loans. However, although loan finance over and above $25 000 is now easily available from Westpac as part of the same mortgage, the additional amounts are at market not concessional rates.

    The $25 000 maximum

    The big issue recently has been the failure to increase the maximum loan available from $25 000, the amount set in 1980. This has become particularly heated since November 1996, when the other scheme, the ADF Home Loan Assistance Scheme (ADFHLAS), had its maximum subsidised loan increased from $40 000 to $80 000. The Cross Report on Personnel Wastage had recommended in November 1988 that the concessional interest DSH loan be increased to $35 000, with this sum being then indexed to CPI movements, but the Government's response to this was to create the new home loan scheme.

    The new scheme commenced on 15 May 1991, and members who were eligible for the DSH loan were given until 31 August 1991 to decide whether they would stay with the DSH or move to the ADFHLAS. The decision once made was irrevocable. There are three main recent complaints or assertions from members who chose to stay with the DSH:

    1. Members had to make a decision based on information that was either incomplete, inaccurate or misleading.
      There appears to have been plenty of advice and information available to members at the time, and they were urged to carefully consider all aspects. Each of the three Service weeklies had at least several articles on the new scheme, and Army provided a four-page summary and comparison of the two schemes, with advice to the pre-May 1985 members who were faced with a decision. The RSL advised members to stay with the DSH, which certainly appeared preferable in several ways. Until recently, there appears to have been no complaints about lack of information or hurried or incorrect decisions being made, but the complaint now is that 'no mention was made of the fact that the new scheme may be updated in the future but the DSH would not'. Presumably the reason for this was not deliberate; rather that ADF Command were also ignorant of future developments. Certainly the 'experts' giving advice did not anticipate DSH members being disadvantaged in this way.
    2. Members should be given another chance to revoke the DSH.
      This would be similar to the second chance that Public Servants were given in March 1996 to consider moving from the Commonwealth Superannuation Scheme to the Public Sector Superannuation Scheme. There is a significant difference, however. Both the Public Service superannuation schemes are overseen by a Commonwealth Minister, whereas the Defence home loan schemes are administered by two different, competing banks; the DSH by WESTPAC and ADFHLAS by the National Australia Bank. As mentioned above, WESTPAC bought the existing DSH loan portfolio at a cost of $1.38 billion, and it may not be happy with the Government providing its rival with another chance to steal some of its dwindling pool of potential clients.
    3. The maximum DSH loan should be increased.
      This seems the logical step to take to restore the balance between the two schemes. The big problem, of course, is the cost of any increase, and there are two potentially significant unknown factors: the number of new loans that would result, and future interest rate changes.

      As at 30 June 1997, the total number receiving a loan was about 91 000, and it is uncertain how many of these would take advantage of an increase in the maximum loan. The big unknown is the reaction of the large group of eligible personnel i.e. those service people, past and present, who meet the criteria for a DSH loan but have not yet borrowed. An unconfirmed 'guesstimate' gives 150 000 as the size of this group, of which approximately 21 000 are still serving members. Probably a large proportion of these people would never consider a loan, whatever its size, because repayment is beyond their means. Others would be ineligible because they already own a home; a DSH loan cannot be utilised to purchase a second home, and they may not be interested in selling their existing home and buying again.

      The unknown factor which causes most concern is interest rate changes. Veterans' Affairs pays the interest above 6.85 per cent, and with the benchmark interest rate (i.e. the average standard variable home loan rate) in September 1997 at 7.13 per cent, Veterans' Affairs had to pay only 0.28 per cent interest on loans. But if interest rates rose to, say, 12 per cent, the amount of subsidy would rise from around $8 million per annum at present to $65 million, with each annual individual subsidy increasing substantially. The effect of high interest rates can be seen in the 1989-90 figures. Whereas the cost of subsidies in 1996-97 was around $32 million (and has fallen considerably since with the decline in interest rates), the cost in 1989-90 was $174.8 million. Certainly there were more borrowers then (128 000, compared to around 90 000 now) but the cost increase due to the very high interest rates at the time is still alarming. If the maximum loan was increased to, say, $50 000 and interest rates were to rise significantly, the effect both of new loans and of additional advances being paid to existing borrowers would be substantial.

    With time, the number both of new loans each year and of existing loans will steadily decrease. This will, of course, lessen the potential impact if the maximum loan was increased. But while an increase introduced in, say, five years time would not face the same cost dangers outlined above, there is the increasing likelihood of a 'too little, too late' response from the clientele and associated organisations.

    Recent developments

    On 3 September 1997, the Minister announced that from 5 January 1998, Veterans' Affairs would introduce a guaranteed minimum subsidy of 1.5 per cent below the benchmark interest rate. Thus, given the September 1997 benchmark rate of 7.13 per cent, the interest rate on a DSH loan would fall to 5.63 per cent. It is estimated this will cost the Government an extra $7.7 million in the six months January to June 1998, and $13.6 million in 1998-99. It was also guaranteed that the interest rate would not rise above 6.85 per cent.

    The Defence Service Homes Amendment Bill 1997, which is to implement the guaranteed minimum subsidy, was introduced in The House of Representatives on 22 October 1997. The Bill also provides that:

    • 'further DSH loans' (i.e. loans which have been transferred to the purchase of another home) will also be capped at 6.85 per cent, with a guaranteed minimum subsidy of 1.5 per cent below the benchmark interest rate
    • 'additional advances' (i.e. new loans, for purposes such as house modifications or refinancing an existing mortgage, to borrowers who have not borrowed the maximum amount) will be reduced from the existing 10 per cent to a maximum of 6.85 per cent, with a guaranteed minimum subsidy of 1.5 per cent below the benchmark interest rate.

    In the absence of any increase in the maximum loan available, recently Veterans Affairs has tended to make the loan more attractive to potential clients by easing restrictions on its use. The DSH loan can now be used to buy a new or previously occupied home, including a strata title unit, or to build, complete, extend, repair or modify a home or to discharge an existing mortgage. A loan is also available to assist an eligible person to acquire a permanent right to reside in a retirement village, or to obtain granny flat accommodation in certain circumstances. Two or more eligible persons may pool their entitlements on the one property. And as a result of legislation passed in January 1991, all loans are fully transferable from one home to another. There has also been an attempt to simplify and streamline the Scheme's administrative processes with the aim of improving client service.

    ADF Home Loan Assistance Scheme (ADFHLAS)

    The Defence Service Home Loan scheme outlined above applies only to service personnel who joined the Defence Force on or before 14 May 1985 (except for those who served in Namibia). As part of his May 1985 Economic Statement, the Treasurer had announced that persons joining after that date would not qualify for benefits under the existing scheme, but would be eligible for home ownership assistance under a scheme to be developed. The Minister for Defence Science and Personnel announced on 17 August 1990 that the new scheme, the Australian Defence Force Home Loan Assistance Scheme, would be operated by the National Australia Bank. As mentioned earlier, the Defence Housing Authority administers the scheme on behalf of Defence. ADFHLAS (popularly known as Defence HomeOwner) commenced on 15 May 1991. Other features of the scheme are:

    • The eligible member is provided with an interest subsidy equal to 40 per cent of the market interest rate for housing loans, i.e. the member pays 60 per cent of the ruling interest rate.
    • The maximum subsidised loan is $80 000, with additional unsubsidised finance available through the NAB at normal home owner first mortgage rates. Where spouses have a joint entitlement, the maximum loan is $160 000. Until 8 November 1996, the maximum loan had been $40 000.
    • Defence Force members begin to accrue subsidy entitlement after five years' service, and earn entitlement to one year's subsidy for every year of service thereafter up to a maximum of 20 years. This has a retention purpose i.e. the longer a member serves, the greater is the entitlement to the subsidy. Until 8 November 1996, the eligibility period for a subsidised loan was six years.
    • Loans under the scheme are available to members who enlisted before May 1985, who had not taken a loan under the DSH, and who revoked their eligibility to the DSH by 31 August 1991.
    • The maximum term of the loan is 25 years.
    • Loans are transferable from house to house during service, and once within the two years after separation from the Defence Force.
    • The loan will be available any time up to two years beyond the member's date of separation from service.
    • A member's entitlements are transferable to a surviving spouse for a period of two years after the death of a service person.
    • Subsidised loans are available to Active Reservists after a qualifying period of eight years effective service. This is one of the amendments which became effective on 8 November 1996.

    The original expectation by the National Australia Bank that 4000 persons per year would apply for a subsidised home loan under the scheme proved overly optimistic. Only 2166 loans were being subsidised as at 31 March 1997. The loan take-up rate is expected to increase as more eligible persons enter the 25 to 34 year age group which, in the general community, is the largest group of first home buyers.

    ---------------------

    Before further assistance is given for the purchase of housing, it needs to be decided whether greater home ownership will have favourable or adverse affects on Defence operational and management requirements for mobility of members. Also assurance is needed that other Departments such as Finance and Workplace Relations and Small Business are not averse to additional benefits for Service personnel in this area.

    Endnotes

    1. Cross Report, p. 305.
    2. ibid, p. 306.
    3. Defence Housing Authority. Annual Report, 1987-88, p. 4. Most of the statistics in this section on the DHA have been compiled from Annual Reports. Some have been obtained directly from DHA.
    4. Glenn Report, pp. 133-4.
    5. The Defence Service Homes Amendment Act 1988 amended the Defence Service Homes Act 1918 to provide for this acquisition by Westpac.

    Chapter 9: Medical Care, Leave and Leave Travel

    Many service conditions are derived from similar provisions in the Public Service (APS). This paper is concerned only with matters either unique to the Defence Force, or of a Services flavour.

    As mentioned on page 21, the Personnel Division in Headquarters ADF and the Defence Personnel Committee have traditionally developed policy, covering items such as:

    Resignation and retirement
    Promotions
    Enlistment
    Re-engagement and discharge
    Law and discipline
    Funerals
    Sport and amenities
    Welfare
    Any other non-policy matters

    It needs to be stressed again that although employment in the Defence Force often reflects civilian counterparts, attempts at step-by-step equation of the working conditions of ADF members with APS or other civilian workers is at best misleading, as the whole is much greater than the mere sum of its parts. What at first may appear to be excessively generous provisions unfairly restricted to Defence Force employees are usually either attempts to ameliorate the effects of turmoil and Service obligations, or are essential for operational efficiency.

    Medical And Dental Care

    The ADF provides regular permanent members with medical and dental treatment and other health services that are deemed necessary by the Chief of Defence Force on the advice of the Surgeon General Australian Defence Force. Medical and dental care is not a condition of service; rather it is a requirement of service provided to maintain ADF personnel at optimal health consistent with operational preparedness and the efficient performance of duty. Care is provided therefore at public expense to regular members of the Defence Force to meet service requirements for medical fitness. Members are exempt from payment of the Medicare levy in respect of their own health care. A member can be disciplined for not undergoing required treatment.

    Army and Navy have established registered private health funds to assist members with medical care for their families. The Army Health Benefits Society, for example, covers both Army and RAAF personnel as well as Defence Department civilian staff, and its 40 000 members represent 91 per cent of those eligible to join. These health funds continue to assist personnel when they leave the Service.

    The DER Secretariat Papers emphasised that ADF's main health priority should be on health support for deployed forces rather than providing 'free medical and dental care' on base.(1)

    The following sets out the taxation implications for the Medicare levy:

    • Single ADF members without dependants continue to be exempt from the levy.
    • Married members' liability is as follows:
      • members with a non-working spouse are liable for payment of a half Medicare levy;
      • working spouse, no children: If the spouse is liable for the levy, the ADF member can claim an exemption;
      • working spouse, with children: If the spouse is liable for the levy and contributes to the maintenance of the children, the ADF member is exempt from the levy;
      • spouse is a Service member, no children: these members continue to be exempt from the levy;
      • spouse is a Service member, with children: If both members contribute to the maintenance of their children, only one member is liable for the half levy, the other being exempt. The couple decide who is to pay.
    • Members of the Reserve have comparable provisions for periods of full time service with the regular defence force:
      • if a person is in the ADF for only part of a financial year, the levy is apportioned accordingly, depending on the person's status for the balance of the year.
    • Separate arrangements generally prevail for personnel posted to overseas localities.

    Dependants of members and civilian employees of the Department of Defence may receive emergency medical treatment in ADF facilities if civilian health services are not readily available.

    The AUSDIL (i.e. Australian Dangerously Ill) Scheme enables a next of kin, relative or nominated person to visit a member hospitalised for serious illness or injury, whose life is imminently endangered, or whose serious condition would receive substantial benefit. Approving authorities are established for amounts of up to $7000 for this purpose.

    Leave

    Leave can be logically divided into(a) Formal and Accountable Leave, which consists of those types of leave the taking of which is recorded on a formal leave document; (b) leave that is Informal and Non Accountable; this leave is granted on request on occurrence, and is not recorded on a leave document.

    Leave entitlements are generally in days, not including weekends and public holidays.

    (a) Formal and Accountable Leave consists of:

    Recreation Leave. In addition to basic annual recreation leave provisions similar to the APS, members of the Defence Force may qualify for additional forms of Recreation Leave:

    Field Leave. This additional recreation leave is provided to compensate for the effects of field service. One day of additional leave is credited to eligible members for every ten days of field service, with a maximum of ten days per year.

    Flying Leave. Up to 10 days a year may be granted to aircrew to overcome the 'physical and mental demands of flying duties'. 100 flying hours or sorties per year gains maximum entitlement.

    Seagoing Leave. Up to 10 days a year may be granted to members serving in a seagoing ship or a Clearance Diving Team. This is to compensate for a ship's 168 hour week and the inability of members to use off duty periods out of their duty environment. The amount of leave is based on completed months of such service.

    Remote Locality Leave. This leave compensates for the uncongenial nature of service in specified remote or climatically inhospitable localities in Australia and overseas. The amount of leave given will depend upon the locality, to a maximum of 10 days per year.

    Leave for Prolonged Duty. Up to five days a year extra recreation leave can be added to compensate for arduous, special or prolonged duty performed without other leave in compensation (see Short Leave).

    Leave for Special Purposes. This consists of:

    Special Leavegranted for (a) the occurrence of the death of a member's spouse, child or parent (b) the occurrence of some other crisis in the domestic, family, financial or personal affairs of that member. The granting of Special Leave on these occurrences has become known as Compassionate Leave (with a maximum of seven days per year) and Carer's Leave (a maximum of five days to allow a member to care for a sick family member who resides with the member).

    Examination Leave. Up to five days are allowed for attendance at examinations in a Service-approved course of study.

    Travelling Leave. A member without family entitled to free leave travel (usually to the next-of-kin's location) on recreation leave, compassionate or pre-embarkation leave, is entitled to travelling leave to and from the leave locality where travelling time by the entitled means is 12 hours or more. This leave is granted to enable members to spend all their leave at the leave destination regardless of posting locality in Australia. Travelling leave is also provided for all members who have been granted compassionate leave.

    Maternity Leave. Members with 12 months prior admissible service are entitled to 12 weeks maternity leave, and may take this in addition to other forms of leave for a single maximum absence of 52 weeks. A member is normally required to commence leave no later than 16 weeks before the expected birth. Approval may, if it is in the interest of the Service, be given to delay leave commencement until no later than six weeks before the birth.

    War Service Leave. For each completed month of eligible special service overseas, a member receives one and a half days of additional leave.

    (b) Informal and Non Accountable forms of leave are:

    Short Leave From Duty. Up to three consecutive working days may be granted for:

    Rest and recuperation
    Compensation for long or unusual duty
    Carrying out a removal
    Compelling personal reasons, when no other leave is applicable

    Short Leave When Not Required For Duty. For example, for a weekend or public holiday.

    Short Leave For Removal Purposes. When a member has been granted a removal, Short Leave is granted to complete the tasks associated with the removal.

    Pre-Embarkation Leave. Up to seven days (including weekends and public holidays) are allowed for members proceeding on duty to prescribed areas overseas for at least six months.

    Leave for Religious Holidays and Festivals.

    Leave to Attend Court Proceedings.

    Members are entitled to 40 weeks leave without pay taken either in a single block or interspersed with periods of duty, for example, for the purpose of paternity leave, to care for the member's child.

    Academic Leave is granted to members undergoing full-time study at a civilian instructional institution to allow them to observe scheduled breaks in the academic year without detriment to their normal recreation leave entitlements.

    Free Leave Travel

    Leave travel entitlements exist as follows:

    Recreation Leave Free Travel. Members Without Family, serving in Australia away from their homes, travel within Australia at public expense to and from home to take recreation leave. Free leave travel is usually granted once per year for members of the Army and Air Force and twice per year for members of the Navy. Subject to service requirements, trainees may receive three free return trips home within Australia per year.

    Remote Locality Leave Travel. Members living with their families in specified remote areas receive free return travel to the nearest capital city each year, except for certain areas where this leave is biennial. The purpose of this leave entitlement is to provide relief from the climatic/isolated conditions at the remote locality, and access to facilities not available in the remote locality. On the other hand, members may use their entitlement to offset the cost of bringing relatives from other parts of Australia to the remote locality.

    Compassionate Leave Travel. A free return travel entitlement for travel in Australia may be allowed in conjunction with a grant of compassionate leave. A member's spouse may also have a Compassionate Travel entitlement when similar urgent circumstances exist. Free return travel to Australia may be approved also in the case of serious illness or death in the immediate family of a member in an overseas posting (in some cases dependants may also travel at public expense).

    Maternity Leave Travel. A member who has been granted leave in respect of her pregnancy, or who has used her normal recreation leave travel entitlement for the leave year, may be granted one additional free return travel entitlement to her home location.

    Pre-embarkation Leave Travel. A member may be granted free travel within Australia to his/her home location when Pre-embarkation Leave is granted, except that a recreation leave free travel entitlement is to be used when one exists.

    From 1 July 1990, official means of travel on leave changed from rail to air for most members. Other travel provisions include:

    Reunion Travel. A member who is unaccompanied by his dependants while serving on long-term duty within Australia, and who was entitled to but did not utilise a removal in respect of that posting, may be granted Reunion Travel from the locality in which he is serving to the dependant's locality and return on completion of each continuous period of three months.

    An anomaly can occur here for naval personnel. If, for example, a member's ship is home-ported in Sydney, his Reunion Travel entitlement is from Sydney to wherever his family are, regardless of where the ship may be stationed. Thus, if his ship is stationed in Darwin, he would first have to make his way to Sydney before becoming eligible for Reunion Travel.

    Travel During Courses or Detached Service. Members separated from their dependants for three or more months on a course, temporary duty, and certain short-term postings may receive free travel home within Australia every three months.

    Removals. A member with family entitled to a removal may be allowed free return travel to the old family location to supervise packing or to accompany the family to the new location.

    Travel in Service Aircraft. The utilisation of Service aircraft for compassionate or personal reasons may be provided as a privilege on a space available basis.

    Holidays

    Under the Defence Force Leave Plan all full-time members of the three Services are able to enjoy high standard accommodation at certain hotels and motels at specially reduced tariff rates. Families and friends accompanying the member are also eligible for the reduced rates.

    In addition to this, throughout Australia, the Services have holiday resorts which are available to members of the Defence Force according to varying systems of priority. New Zealand facilities are also available by a reciprocal arrangement. They provide comfortable, low cost accommodation for members and their families.

    Discount Buying Scheme

    In 1989, the Cross Sub-committee recommended that the Government establish a system of 'post exchange/commissary' retail outlets on Defence bases, with the aim of providing goods at discounted prices to members of the ADF. While not going as far as that recommendation, a Defence Force Discount Buying Scheme commenced operations in April 1990. Known as the Defence Force Privilege Card scheme, it was developed by Defcom Pty. Ltd. and is designed to give ADF members, their families and former members of the ADF the opportunity to buy a wide range of goods and services at discount rates. Membership for serving members, including Reservists with a training commitment, is free. The Discount Buying Scheme is a realistic approach which is proving popular among ADF members. Regional and area liaison officers have been appointed by all Services to coordinate Defcom access to personnel.

    The scheme embraces over 250 different commodities and services, including holidays and accommodation. These are made available through more than 900 different companies, operating through over 5500 points of sale throughout Australia. The long term aim is to enable use of the scheme by virtually all Service personnel, with the current focus being to increase both the range of commodities and the outlet points at larger ADF centres.

    Endnotes

    1. DER Secretariat Papers, pp. 276-7.

    Chapter 10: Compensation and Repatriation

    Background

    Since World War II, disability compensation cover for ADF members has been characterised by a variety of legislative changes, and only a few key changes can be mentioned here.

    While ADF members had compensation cover under the Repatriation Act 1920 for death, injury or disease which occurred as a result of their war or warlike service, until 1949 there was only limited cover for peacetime service under the Defence Act, the Naval Defence Act and the Air Force Act. On 3 January 1949, compensation cover for peacetime service was given to members under the same legislation applying to all other Commonwealth employees, the Commonwealth Employees Compensation Act 1930.

    With the introduction of the Compensation (Commonwealth Employees) Act 1971, school cadets and officers/instructors of cadets were covered for compensation as employees of the Commonwealth whilst participating in cadet activities. In 1973, the Whitlam Government, as one of a number of incentives designed to encourage national servicemen to see out their period of enlistment in the Army, extended limited cover under the Repatriation Act 1920 to members injured in peacetime service after 7 December 1972. This was the beginning of 'dual eligibility' i.e. an entitlement to compensation for injuries or diseases suffered during peacetime service under both Commonwealth workers' compensation legislation and repatriation legislation, with offsetting provisions applying.(1)

    Peacekeeping service: In 1981, compensation cover was introduced under the Repatriation Act 1920 for peacekeeping service. As these provisions were retrospective, they covered all previous peacekeeping operations (the first being the Security Council Commission of Investigation on the Balkans commencing in January 1947). Until this point, peacekeeping operations had generally been treated as peacetime service.

    On 22 May 1986, the Veterans' Entitlements Act 1986 (VEA) was introduced. The VEA replaced the Repatriation Act 1920 and other legislation such as the Repatriation (Far East Strategic Reserve) Act 1956 and the Repatriation (Special Overseas Service) Act 1962 which had been introduced for service in Malaya and Vietnam respectively. Although 'dual eligibility' for peacetime service was continued, a sunset clause was inserted whereby cover under the VEA for peacetime service would cease on the establishment of a 'Military Compensation Scheme'. Under the VEA, compensation cover was also extended to a new category of service, called 'hazardous service'.

    Hazardous service was introduced in recognition of the fact that operations could occur which, although not warlike in nature, had a higher degree of risk than normal peacetime service e.g. service in Rwanda and mine clearance work in post-war Afghanistan.(2) Hazardous service was made retrospective to 7 December 1972 i.e. it can not be applied to operations occurring prior to this date.

    On 1 December 1988, the Safety, Rehabilitation and Compensation Act 1988 (SRCA) commenced operation, replacing the Compensation (Commonwealth Employees) Act 1971, and providing compensation and rehabilitation cover to all Commonwealth employees including ADF members for peacetime service. Comcare Australia was formed and, while taking over the administration of Defence's civilian claims, it delegated powers to determine and administer claims under the SRCA for ADF members to Defence's Military Compensation and Rehabilitation Service .

    For ADF members with 'dual eligibility', the benefits systems provided by the two Acts differ considerably. The VEA, for example, offers a tax free disability pension, while the SRCA compensates similar conditions with a tax free lump sum, and awards taxed, income-based, weekly incapacity payments for lost income. Also, while the standard of proof for injuries sustained on peacetime service under both the SRCA and the VEA is the civil standard of balance of probabilities, a more generous 'reasonable hypothesis' standard is applied under the VEA for claims relating to hazardous and peacekeeping service as well as for warlike or operational service. Under the 'dual eligibility' arrangements, the usual procedure is for claimants to simultaneously submit claim forms for benefits under both Acts for each injury/illness, and then decide which benefits best suit their circumstances.

    1994: the Military Compensation Scheme

    The system of providing compensation under two complex Acts was unsatisfactory and confusing, and the longstanding commitment in the VEA to introduce a military compensation scheme finally led to a new scheme on 7 April 1994 with the passing of the Military Compensation Act 1994, which amended both the VEA and the SRCA. Rather than a new scheme unique to the military however, this was more a repair of the existing system. In fact the Military Compensation Scheme (MCS) is essentially a term describing the changes to the SRCA and the VEA brought about by the Military Compensation Act 1994. Cover for all types of service was now provided under the SRCA, with cover under the VEA being confined to those members of the ADF on hazardous, peacekeeping, warlike or operational service. Dual coverage for peacetime service however, was retained by those who had enlisted prior to 7 April 1991 (i.e. thus completing three years service before enactment of the MCS), but for all enlistees since that date, peacetime benefits are no longer available under the VEA.

    The MCS recognises the special nature of ADF peacetime service by providing additional benefits to ADF members under the SRCA. For example, there is provision for full salary entitlements during the first 45 weeks following injury or illness, including after discharge; coverage during approved resettlement training after discharge; and cover for the unintended consequences of medical treatment.

    The Safety, Rehabilitation and Compensation Act 1988 (SRCA)

    As mentioned above, administration and determination of claims under the SRCA is the responsibility of the Military Compensation and Rehabilitation Service in the Department of Defence.

    Benefits available under the SRCA include:

    • incapacity payments at 100 per cent of military salary for the first 45 weeks of incapacity, decreasing to a minimum of 75 per cent until age 65 years, with superannuation payments taken into account;
    • full medical, hospital, pharmaceutical treatment costs;
    • household and attendant care services up to $281.56 each per week;
    • lump sum payments for permanent impairment and non-economic loss, and for death (payable only to dependants). More will be said later about the adequacy of these payments;
    • weekly payments of $56.30 to each dependent child of a deceased member payable to age 16 years or 25 years if a full time student;
    • payment for aids, appliances or modifications to home, workplace or car necessary as a result of the compensatable condition; and
    • assistance with vocational rehabilitation.

    The SRCA provides for the payment of compensation payments on a weekly basis and/or in a lump sum, depending on the circumstances. Entitlement to income-based weekly incapacity payments under the SRCA ceases when the ex-member reaches the age of 65 years, when the provisions of the social security system become appropriate. The SRCA also provides for payments of reasonable medical treatment and for household and attendant care services, as well as for expenses incurred in repairing or replacing damaged artificial limbs and modifying the home, car etc. to accommodate a member's/ex-member's special needs resulting from the compensatable injury.

    A widespread publicity campaign accompanied the introduction of the MCS in 1994, and claims for compensation under the SRCA increased markedly. This was largely due to members and ex-members realising for the first time that they might be eligible for compensation for their injuries. However, the fact that the increase in claims began several years before the introduction of the MCS suggests there was some apprehension before the scheme that it would not be as generous as the old system, thus accelerating claims before the new system was introduced. Following are the numbers of new claims and the cost of compensation benefits annually under the SRCA since 1992-93:(3)

    Year

    New Claims

    Cost of Benefits (million)

    1992-93

    3970

    $37.17

    1993-94

    5043

    $46.88

    1994-95

    5980

    $51.69

    1995-96

    6428

    $70.71

    1996-97

    6235

    $93.78

    Under the VEA, there were 30 800 new claims for Disability Pensions during 1996-97, and 8553 new claims for War Widows Pensions. Total expenditure during 1996-97 was $884.3 million on Disability Pensions, and $935 million on War Widows Pensions.(4)

    The biggest single factor in the increasing cost of compensation under the SRCA is lump sum payments for permanent impairment. A high proportion of claims are for serious and chronic conditions and result in a lump sum benefit. The cost should not be surprising; most of the activities of a defence force are energetic and often risky, and it is impossible not to have injuries. Indeed, to some extent Defence's caring image breaks down at the injury stage. The focus in the ADF is on a fit and healthy force, and when injury occurs, the aim, shared by medicos and patient, is to fix the problem for a quick return to the unit. But if the injury is more serious, often the only choice is discharge. Too often at this stage the member fails to make a claim for compensation, mainly because he/she and colleagues have ignored information on the matter, considering injury for them, at least serious injury, hardly a possibility. Very often advice given in the immediate workplace is poor. The Military Compensation and Rehabilitation Service (MCRS) gives regular talks on the compensation system at various bases, but it is hard to penetrate the military culture which assumes, on the one hand, fitness and, on the other hand, that the system will look after the problem if injury does happen. Glen Tye, Assistant Director at the MCRS, speaks of 'a widely held view among ADF personnel that career prospects may be threatened if there is a perception of physical weakness'.(5) It is not a 'claims culture', and too often a claim is not made until years later when the injury which had been tolerated becomes more serious. For example, less than 40 per cent of new claims on the MCS are lodged within a year of the injury. This compares with most workers' compensation schemes in which over 95 per cent of claims are lodged within a year of the injury.(6) The best solution seems to be to ensure all medical personnel provide adequate and accurate information and advice concerning compensation.

    One initiative which promises to make the whole compensation procedure more efficient is the DEFCARE project, which is aimed at providing a modern, integrated OHS, compensation and rehabilitation management system for Defence. It is planned to phase DEFCARE in from early 1998.

    The Veterans' Entitlement Act 1986 (VEA)

    Responsibility for administering the VEA rests with the Department of Veterans' Affairs. Under the VEA, members of the ADF with hazardous, peacekeeping, warlike or operational service (as well as some members with peacetime service as previously discussed) are entitled to a disability pension as compensation for the effects of any defence-caused injury or disease relating to that service. This pension is untaxed and is not subject to an income and assets test. The amount of payment is at a series of rates, depending on the degree of incapacity, with the maximum currently set at $636.80 per fortnight. Members or ex-members may also have entitlements to other benefits such as a treatment entitlement card, travel, accommodation and meal allowance in relation to travel for medical treatment, a telephone rental concession, or exemption from the Medicare levy, depending on their individual circumstances. The spouse of a deceased member may also be eligible in certain circumstances to receive a funeral benefit, bereavement payments and a Widows pension.

    Members of the ADF who have war or warlike service, whether incapacitated or not, are also entitled to receive the Service Pension from age 60 for males and 55 for females. The Service Pension may also be paid at an earlier age when a veteran is permanently incapacitated for work. The Service Pension is an income support pension similar to Social Security's age pension i.e. it is not a form of compensation. The Service Pension is subject to the income and assets test and cannot be granted in addition to any Social Security age or invalidity pension.

    The Inquiry into Military Compensation Arrangements for the Australian Defence Force criticised the VEA as lacking 'some of the desirable features of a modern compensation scheme, such as access to a lump sum and an emphasis on return to work'.(7)

    Appeal Mechanisms

    Under the SRCA if a client is not satisfied with any decision, he/she can request a reconsideration/internal review of that decision which will be made by an experienced officer not previously involved in the decision. This process results in a 'reviewable decision' which can then be appealed to the Administrative Appeals Tribunal, a body established under the Administrative Appeals Tribunal Act with power to review decisions of an administrative nature.

    Under the VEA, a claimant who is dissatisfied with a decision may apply to the Veterans' Review Board (VRB), an independent statutory body, to review the decision. If the claimant is dissatisfied with a decision of the VRB, he/she may appeal to the Administrative Appeals Tribunal.

    Recent developments

    Many of the benefits under the MCS are generally regarded as satisfactory. Benefits under the SRCA are in fact considered as among the more generous in a comparison of the ten workers' compensation schemes in Australia. However, following the Black Hawk helicopter crash in June 1996, there was criticism of the inadequacy of the lump sum payouts for those killed and seriously injured. The maximum compensation lump sums were considered to be well below what could be expected in the settlement of similar civilian cases. The death benefit was approximately $166 000, while for serious injury-for example, military personnel suffering paraplegia or quadriplegia-the benefit has been about $130 000 to $150 000. It should be noted however, that the comparative advantage of the large lump sum settlements under Common Law is often more apparent than real, as the military compensation package also contains ongoing benefits and care. Other compensation can include a reimbursement of costs involved in both household services (to a maximum of $277 per week) and attendant care (also a maximum of $277 per week). Another factor in the criticism following the Black Hawk crash was that members involved in the same accident could receive different compensation entitlements depending on their date of enlistment.

    On 30 October 1996, the Minister for Defence Industry, Science and Personnel, Bronwyn Bishop, announced that a federal inquiry would be established to examine the adequacy of the existing compensation system. The new arrangements which resulted from this inquiry were announced on 11 June 1997, the main details being as follows:

    • The death benefit lump sum provided to a surviving spouse has been increased to $200 000, with a further increase of $50 000 payable to the spouse for each dependant child.
    • The lump sum to be provided to a severely injured member has similarly been increased to $200 000, with a further increase of $50 000 for each dependant child.
    • These additional amounts are not to be provided under the SRCA, which applies to other Commonwealth employees, but are to be paid out of Defence appropriations.
    • The above changes apply retrospectively to 7 April 1994, the start of the current Military Compensation Scheme. The additional payments were made automatically to the victims and families of those involved in the 1996 Black Hawk helicopter crash.

    These changes will be introduced as amendments to the Defence Act.

    In addition, a 'single, self-contained military compensation scheme for peacetime service', covering only military personnel, and recognising the different nature of military service from civilian employment, is to be developed. The need for this stems from the problem of providing the above additional benefits to service personnel but not to civilian members of the same scheme, SRCA. There are also anomalies in the current system such as different benefits depending on date of enlistment or length of service. The new peacetime military compensation scheme is to be submitted to Cabinet for consideration by 30 June 1998. Certainly some simplification of the system would be welcome. The two Acts, the VEA (a very complex Act) and the SRCA, which formed the system ten years ago, became three Acts in 1994 with the introduction of the Military Compensation Act, and the scheme will soon depend on four pieces of legislation with the amendments to the Defence Act mentioned above.

    In March 1997, the Inquiry into Military Compensation Schemes for the Australian Defence Force summed up the situation as follows:

    The system has evolved to a point where it is characterised by extreme complexity, particularly where dual eligibility to SRCA and VEA exists. The practical effect of this complexity is that compensation claimants are unable to receive clear and unambiguous advice from the various scheme administrators on the optimal range of benefits available to them.(8)

    Funerals

    Serving members are entitled to a funeral and headstone at public expense-either a Service funeral or a reimbursement of the normal Service costs if a private funeral is desired. This provision follows a long tradition of the Services paying last respects to fallen comrades, and is seen as a contribution to the morale and group identity of the Defence Force. The funeral benefit under the MCS is at present $3899.43.

    Under the VEA, a lump sum of up to $550 can be granted towards the cost of a funeral of an eligible veteran or dependant.

    Endnotes

    1. Tye, Glen. Military Compensation Scheme. A paper for the 6th Accident Compensation Seminar. Coolum, Qld., December 1996, p. 2.
    2. Department of Defence. Inquiry into Military Compensation arrangements for the Australian Defence Force. Canberra, March 1997, p. 70.
    3. The following figures were provided by the Military Compensation and Rehabilitation Service.
    4. This information was provided by the Department of Veterans' Affairs.
    5. Tye, G. Op. Cit., p. 7.
    6. ibid: 7.
    7. Department of Defence. Inquiry into Military Compensation arrangements, p. 51.
    8. ibid, p. 51.

    Chapter 11: Defence Force Members and the Law

    Defence Force members are not merely civilians who wear uniform. Members retain their civilian position under the ordinary law of the land; it has been argued that their civil rights are reduced, although they retain most civil duties and liabilities. In addition they are subject to the Defence Force disciplinary law of their Service.

    Employment and Civil Rights

    The relationship of a member to his/her service is quite different from that existing between almost any other employee and his employer. Service personnel undertake to carry out duties of a most demanding kind in both peace and war. At the same time they are required to accept a strict code of discipline which can lead to punishments for offences or misdemeanours known only to military law. For example, in extreme cases the member could be dismissed whereas such a punishment would not be considered in comparable public service employer-employee situations (although proposed public service legislation could change this). However, it should be pointed out that the undoubted strong powers possessed by superiors in the armed forces are more in the nature of reserve powers, to be resorted to only in exceptional circumstances.

    There is no means of joint industrial action in disputes with the employer. A combination between persons, of whom at least two are members, to resist lawful authority in such a manner as to prejudice substantially the operational efficiency of the Defence Force is defined as mutiny, for which the maximum punishment is imprisonment for 10 years. Mutiny in operations against an enemy attracts a maximum punishment of imprisonment for life.

    Redress of Grievance

    Where a member considers that he or she has a grievance concerning any matter relating to his/her Service the member may make a complaint to his/her commanding officer. If the complaint is not or cannot be satisfied by the member's commanding officer, it may be referred to the member's Chief of Service. An officer or warrant officer dissatisfied with the decision of the Chief of Service may have the complaint referred to the Chief of the Defence Force.

    The relevant legislation is Part XV of Defence Force Regulations. These tri-service regulations were introduced in 1985 replacing previous single Service legislation. Procedures and administrative aspects are contained in Defence Instruction (General) Personnel 34-1 and supplementary single Service instructions.

    It is an offence if a member:

    • prevents or dissuades a member from making a complaint;
    • prevents or dissuades a member from investigating a complaint or redressing a grievance; or
    • causes a member to be victimised, penalised or in any way prejudiced for making a complaint or requesting the referral of a complaint.

    A member who is dissatisfied with the outcome of a redress of grievance or who is aggrieved by delays in the processing of the redress of grievance may complain to the Defence Force Ombudsman.

    Defence Force Ombudsman

    If a member has sought redress of grievance on such matters as postings, promotion, housing, allowances and, having exhausted all available avenues of review, is still not satisfied, he/she can direct the complaint to the Defence Force Ombudsman. Until 1983 there was a separate Defence Force Ombudsman, but the office was then combined with that of the Commonwealth Ombudsman, acquiring additional stature and powers in the process. The present Ombudsman is Philippa Smith.

    The Ombudsman's investigations are independent of any other Government body, and she has power to inspect files and other records, to enter Commonwealth premises and to question Defence Force members and public servants. However, she is not authorised to investigate matters in connection with disciplinary proceedings, nor can she legally investigate actions of State or local governments, or of private individuals or companies.

    If the Ombudsman finds that a complaint is justified, she can recommend remedial action. The ADF is not compelled by law to take any action, but if her recommendations are not accepted, the Ombudsman can publicly release the findings of the report, or report the matter direct to the Prime Minister and then to the Parliament.

    During 1996-97, there were 896 complaints, both written and oral, received under the Defence Force Ombudsman's jurisdiction. Of these complaints, 593 related to the ADF, 158 to the Department of Defence, and 145 to the Department of Veterans' Affairs.

    Further information on the role and work of the Defence Force Ombudsman can be obtained by contacting the Commonwealth Ombudsman's office in any capital city (or the Publicity and Information Officer in Central Office, Canberra).

    Administrative Appeals Tribunal

    Certain decisions which may affect Service personnel are subject to review by the Administrative Appeals Tribunal on appeal. These include matters relating to Veterans' Affairs, compensation, and Defence Force retirement benefits.

    Civil Rights

    On 13 August 1980 Australia ratified the International Covenant on Civil and Political Rights. The Covenant is binding on the Australian Defence Force. Article 19 guarantees freedom of expression, but allows for certain restrictions. In this regard, no member of the Australian Defence Force is to make a public comment or disseminate information about Defence policy or administration which could place in doubt that member's political impartiality or acceptance of the obligation to implement the policy of the elected government.

    An independent organisation active since 1959 in pursuing improvements in service conditions is the Regular Defence Forces Welfare Association (RDFWA) of which the Governor-General is Patron. The special concern of the Association is with the well-being of those who separate from the regular Defence Force, their dependants and widows/widowers. Serving members of the Defence Force may join, and the Association seeks to foster their interest in matters likely to affect them on their retirement.

    A few concessions are granted to members which are not generally available to civilians, such as exemption from jury service.

    Some commonplace military offences are not criminal offences in civilian life. Absence without leave; refusal to obey an order; and insubordination to a superior officer, for example, are all supports to Defence Force discipline and social control with no civilian equivalent.

    Homosexuals and the Defence Force

    Until late 1992, the Defence Force as a matter of policy sought to exclude homosexuals from its ranks, notwithstanding the significant change in community attitudes towards male and female homosexuality which had taken place in the 1980s. The reasons for this were as follows:(1)

    • command and morale: the ADF considered homosexual behaviour prejudicial to effective command relationships and the maintenance of the high level of morale and discipline;
    • national security: the ADF believed that homosexual behaviour could present security risks;
    • health risks: especially the risk of HIV infection; and
    • minors: the ADF responsibility for minors necessitated their protection from homosexual behaviour.

    Certainly by 1992 implementation of ADF policy had become less harsh, with conduct such as the official delving into private lives being discontinued. Although homosexual members were usually discharged, treatment of offenders was not generally punitive; rather it was seen as an administrative action to be performed sympathetically and with discretion.

    However, following a vigorous internal debate inside the then governing Labor Party, reflected by public controversy, the Government directed that the exclusion policy should end as from 23 November 1992. It was replaced by the policy set out in General Instruction 35/3 of 1992, 'Unacceptable sexual behaviour by members of the Australian Defence Force', endorsement of which had been recommended by a Caucus Joint Working Group on Homosexual Policy in the ADF. Adoption of this Instruction in effect shifted the emphasis from the mere fact of homosexuality to sexual behaviour (both homo or hetero) which might be detrimental to morale or command relationships.

    Since the ban was lifted in 1992, the ADF has not discriminated against homosexuals. Recruiting Centres do not question an applicant's sexual preference, and sexual orientation is not a consideration in relation to posting or career development opportunities. The ADF has no concern with the sexual activities of its members provided they are not unlawful and not contrary to, or inconsistent with, the inherent requirements of the ADF. Inherent requirements of the ADF are defined as the need for all Defence Force members to contribute to operational effectiveness, the preservation of group cohesion, respect for command relationships, collective discipline and maintenance of morale.

    Despite forecasts of catastrophe from opponents of the change, no serious problem has ensued from the change in policy, and homosexuality is not an issue within the ADF. In 1995, Hugh Smith suggested that 'the most difficult problem likely to confront the ADF in the future is a request from a homosexual couple to be given married quarters or other benefits normally available only to married personnel.'(2) Smith added that granting benefits here would be contrary to the Government's policy on homosexual couples among civilian employees, and probably also contrary to public opinion.

    Sexual Harassment

    General Instruction 35/3 of 1992 on 'Unacceptable sexual behaviour' was mentioned above in the context of homosexuality in the ADF, but in fact the main concern at the time was the far more widespread phenomenon of sexual harassment. In 1986 Defence had issued an Instruction on the Management of Sexual Harassment in the Workplace, and in 1992 this was reviewed and incorporated in the new Instruction.

    Until the mid-1970s, women generally were managed and trained as separate Services by women, and this isolation seems to have kept sexual harassment from becoming a problem. With the increase in numbers of women in the ADF during the 1980s and the removal of discriminatory employment practices against servicewomen, especially in the late 1980s and early 1990s, problems of integration developed.

    Sexual harassment became a major issue as a result of allegations of incidents that occurred on HMAS Swan during 1992. A Senate Inquiry followed, and the Report, Facing the Future Together, was tabled on 25 August 1994. The general thrust of the 42 recommendations was that the ADF take steps to raise gender awareness and prevent unacceptable sexual behaviour from occurring. In reporting back to the Senate in December 1995, the ADF provided an Action Plan it had prepared on sexual harassment.(3) Since that time a comprehensive strategy has been developed. This includes:

    • Commitment of Senior Leaders. All senior leaders have publicly stated that no form of unacceptable sexual behaviour will be tolerated. They have outlined acceptable and unacceptable behaviour.
    • Defence Policy. Defence Instruction Personnel 35-3 'Harassment, Discrimination and Fraternisation and Unacceptable Sexual Behaviour by Members of the ADF' has been published and is being reviewed. The Defence Instruction defines unacceptable behaviour, as well as the management and the reporting processes.
    • Diversity Programs. The Services have established their own diversity integration and anti-harassment programs, as follows:
      • Navy. Good Working Relations;
      • Army. Fair Go; and
      • Air Force. One Team.
    • Training. An extensive program of Equal Employment Opportunity, anti-harassment and gender integration training has been established within the Services and at the Australian Defence Force Academy aimed at educating the entire ADF to attain a working environment free from harassment and discrimination. A review of all training will be undertaken in 1998.
    • Tollfree Helplines. Each Service has set up a Tollfree Helpline to provide options for action from people who believe they have been harassed or discriminated against, people who have been accused of harassment or discrimination, and to leaders and managers.
    • Equity Adviser Network. A Defence-wide network of equity advisers and anti-harassment contact officers and EEO officers has been established. These advisers provide specialist advice to the chain of command and a safety net at all establishments for personnel in need of advice and assistance with respect to all harassment and discrimination matters.
    • Publications. A considerable number of publications-booklets, brochures and posters-receive wide distribution.
    • Investigation. The process for the investigation of complaints of sexual harassment have been improved, with training being provided to Investigating Officers. A comprehensive review of training is being undertaken.
    • Reporting of statistics. A comprehensive data base of all incidents of unacceptable sexual behaviour is kept. The Minister receives statistics monthly.

    It is generally accepted that reported incidents do not accurately reflect the extent of sexual harassment in the Forces, although there are indications that recently members have been more willing to report instances. HQADF's submission to the Senate Inquiry provided the following statistics: in the four year nine month period from January 1989 to September 1993, there were 132 harassment incidents and 116 offences.(4)

    Many of these incidents were dealt with under the Defence Force Discipline Act (DFDA), which will be discussed later. When dealing with less serious incidents, Commanding Officers may use formal administrative action instead of the DFDA. This gives members the opportunity to improve their behaviour without having formal charges laid and a conviction recorded. Members who feel aggrieved still have access to the established redress of grievance system whereby the complaint is formally investigated or they may make a submission to the Defence Force Ombudsman, the Human Rights and Equal Opportunity Commission or to the Minister.

    In its submission to the Senate Inquiry, HQADF acknowledged the rapid increase in employment opportunities for women from 1984 to 1992 happened a little too quickly for the defence culture to accommodate:

    With hindsight, it could be contended that the ADF moved too quickly in response to external pressures. As a result, the difficulties of integration were not always immediately apparent and the provision of mixed-gender preparation and training sometimes lagged behind the need. In many ways the ADF was breaking new ground in Australia given the heavily male-dominated military environment.(5)

    As Beatrice Faust commented at the time: 'Legislation is a top-down remedy. To succeed, it needs to meet a bottom-up change of values, attitudes, and expectations.'(6)

    In October 1997, the Minister for Defence Industry, Science and Personnel, Bronwyn Bishop, announced an inquiry into sexual harassment and sexual offences at the Australian Defence Force Academy. This announcement followed media reports of incidents of harassment at the Academy. The review team of six, which is to report by 30 April 1998, will evaluate the effectiveness of current ADF policies, practices and procedures in relation to harassment, discrimination and unacceptable sexual behaviour.

    HIV

    On 20 January 1988, the then Minister for Defence Science and Personnel, Ros Kelly, announced a 'comprehensive policy on HIV infection....designed to minimise the impact of the disease on the operational efficiency of the ADF'.(7) The policy covered education, testing (especially of new recruits), counselling and management of Service personnel affected by the AIDS virus.

    HIV became an issue in the ADF in July 1995 when an HIV-positive recruit, having been dismissed, successfully sued Defence before the Human Rights and Equal Opportunity Commission for breach of the Disability Discrimination Act 1992. In November 1995, the then Defence Minister Senator Ray initiated a Cabinet Submission to exempt the ADF from the ruling. Regulations were later introduced prohibiting the ADF from recruiting people with a range of ailments.

    Defence's main arguments were that:

    • Deployment to a war zone, where there is potential for multiple casualties, is a requirement of service, and the ADF did not have the facilities to deal with contaminated blood;
    • ADF members are expected to be fully fit, and HIV-positive people should be banned from joining as are any other chronic disease sufferers. There was real apprehension that this particular case would create a precedent for Defence to be opened up to people with a range of other disabilities.

    A possible inconsistency was seen in the fact that ADF members who contract HIV during service are moved to desk jobs, offered counselling and support, and allowed to stay in. But Defence argues that the small number of these people makes them manageable.

    Figures released in November 1995 revealed that since the medical policy on HIV was implemented in 1988, 165 319 HIV tests had been conducted, including tests on 38 698 recruits. Of these, 48 people had tested positive. Nine of these were still serving in the defence force.(8)

    Disciplinary Law

    Historically, military forces have always relied upon some type of restrictive code as a means of maintaining discipline among those forces. The requirements of military commanders and civil authorities are now well established, both as a means of enforcing loyalty and compliance upon the battlefield, and as a means of avoiding rebellion and mutiny by military forces when not so employed. The military law as adopted by Australia from British acts and regulations incorporated most of the normal criminal offences ranging from felonies, such as murder and rape, down to comparatively minor matters such as petty theft. The various pieces of legislation also created many other offences which have no parallel in the civilian world, such as desertion, insubordination, absence from duty, disobedience of orders, etc, and provided what were considered to be appropriate punishments.

    The Defence Force Discipline Act

    Since World War II, repeated efforts were made to consolidate and modernise the disciplinary law of Australia applicable to the Defence Force. The culmination of this effort, the Defence Force Discipline Act 1982 (DFDA), which came into effect on 3 July 1985, embodies, for the first time in the one act, the disciplinary law applicable to the three arms of the Defence Force. It replaced three UK Acts, two of which had ceased to operate in the UK, four sets of UK rules and regulations, all of which had ceased to operate in that country, the Australian Acts and nine sets of regulations.

    The Act comes close to uniformity-the exception being that for essentially practical considerations Naval commanding officers and subordinate summary authorities have greater powers of punishment than their counterparts in the Army and Air Force.

    The Act eliminates obsolete offences and restates all offences in modern language. Maximum punishments have been reduced, and a distinction drawn between serious offences and mere breaches of discipline. Other changes instituted include a revision of the scale of punishments, and the law of evidence and the principles of criminal responsibility that are to apply have been specified.

    The actual procedures for dealing with military offences are little different under the DFDA from those which have been in force for many years. Minor offences are dealt with by middle rank officers-generally Major or equivalent and below (as will be pointed out later, since 1995 there has been the option of appointing 'Discipline Officers' to deal with minor infringements). More serious matters are heard by a commanding officer who might be a Major or equivalent, a Lieutenant Colonel or higher rank. A very serious offence will be referred by the commanding officer to a convening authority-probably an officer of two star level-who may decide to set up a court martial, or to refer the case to a Defence Force Magistrate. These latter tribunals have a wide range of penalties available to them, from recording a conviction without punishment through to a period of detention or imprisonment.

    Although the Act incorporates ordinary criminal offences such as theft, assault etc, so that these can be dealt with by the military system in situations where this would be appropriate, it has been held by the High Court(9)at offences under the Act must contain a sufficient 'Service nexus with discipline' for military jurisdiction to be validly exercised. Where this link with the good order and discipline of the Defence Force is lacking, it is doubtful there would be sufficient jurisdiction for the matter to be dealt with under the DFDA. Instead, it would go to a normal civilian court

    Another feature of the Act is its extra-territorial application i.e. its provisions apply both in and outside Australia.

    The Act requires that there be an automatic review of proceedings conducted by service tribunals. Reviewing authorities, after obtaining appropriate legal advice, have power to quash proceedings or order a new trial in cases of irregularities or injustices.

    A serviceman/woman found guilty by a court martial also has a right of appeal to the Defence Force Discipline Appeal Tribunal.

    At its introduction, the DFDA was generally considered to represent a major step forward in providing a modern and comprehensive basis for enforcing military discipline. One of its aims was to eradicate outmoded aspects of the previous law. Although there are probably no instances where the full force of a court martial's power to punish have been exercised, it has been argued that this Act still reflects past thinking in some respects by over-emphasising the seriousness of some service-related offences by providing for a maximum punishment of imprisonment, which also carries with it the stigma of dismissal. It is pointed out that modern military thinking embraces the view that the basis of discipline is leadership, and consent on the part of the serviceman, rather than coercion by the threat of drastic punishment. However, this must be balanced with the need for the Act to provide a basis for regulating conduct under wartime conditions as well as peace. It must be transportable to the commander in the field; hence the wide range of offences specified and penalties available, which give scope for application to wartime conditions.

    The DFDA Board Of Review

    Section 196B of the DFDA required that, after the Act had been in force for three years, a Board of Review be established to report on the operations of the DFDA and of related laws. Ros Kelly, then Minister for Defence Science and Personnel, appointed the Defence Force Discipline Legislation Board of Review on 4 July 1988, with the Honourable Xavier Connor, QC, as Chairman. The Board presented its report on 31 May 1989.

    The general impression gained by the Board was that the DFDA was 'operating reasonably satisfactorily' and is 'generally accepted within the Services'. However, a number of changes were recommended as necessary, most of them requiring amendments to the Act. Legislation to implement the Board's recommendations was not in fact introduced into Parliament until March 1995, with the recommendations coming into effect on 1 November 1995.

    The most significant of these changes was the streamlining of the handling of minor offences by providing an alternative to trial by commanding officers. A major criticism of the DFDA has been the amount of resources it consumes, particularly in proportion to the relatively minor nature of many disciplinary offences. The simplified procedure introduced in 1995 allows for the appointment of a 'Discipline Officer' (of Warrant Officer rank or above) to deal with minor disciplinary infringements. One of the limitations on the operation of this scheme is that a discipline officer has jurisdiction to deal with infringement notices given only to members below NCO rank i.e. members of Corporal rank and above continue to be dealt with under existing DFDA procedures.

    One set of recommendations might be mentioned. The final chapter of the report draws attention to the 'rudimentary' understanding of the DFDA held by junior and lower rank members of the ADF, their knowledge having been acquired through discussion in barracks and messes.(10) Board's proposals to remedy this included the recommendations that more comprehensive coverage of the Act be given in courses to all ranks, and that a small plain language guide to the Act be compiled and made available. Certainly members could be made more aware of the Act, but this proposal appears to overlook the fact that in all Service training the DFDA is covered in a broad sense, providing a general familiarity with it. It is probably unrealistic to expect a more detailed knowledge of what is an intricate piece of legislation.

    In an address given in July 1995, Air Commodore the Hon. Mr Justice Grove noted that, while 'the system was working reasonably well', the DFDA has survived by the narrowest margin three High Court challenges to its validity, and from the outset the Act 'has had a very tenuous hold on life'.(11)essence the three High Court challenges argued that the conduct of a court martial or trial before a Defence Force magistrate is unconstitutional, in that it infringes Chapter III of the Constitution because the persons appointed to conduct the trials are not persons appointed in accordance with Chapter III to exercise Commonwealth judicial power. The opposing view has been that the DFDA-and the courts martial and trials it permits-is a valid exercise of the power conferred by Section 51(vi) of the Constitution i.e. it is a defence discipline function, not a judicial function.

    Deputy Judge Advocate General Justice Terry Cole argued in 1994 that courts martial are becoming an insignificant aspect of military discipline, and should be replaced by a civilian court. To this it must be pointed out there are around 30 general courts martial each year, and their continuing role seems justified where there are offences of sufficient gravity.

    Justice Cole proposed the creation of a separate Military Court of Australia which would comprise a Chief Judge of Federal Court status. In effect, this would put military justice in the hands of civilians. Justice Cole sees several advantages in a single-person judicial officer as against a traditional court martial where the decision is reached by a board of five legally-untrained military officers. For example, a correct result is more likely because of legal training and experience; there would be no question of unit command influence; and it would be less operationally interfering in that five or more officers would not have to be withdrawn from ordinary duties. However, once again it must be pointed out that the Act has to be applicable to wartime conditions, when a civilian judiciary is not available. It can also be asked whether the administrative cost would be warranted of establishing a 'Chapter III' Court of the Commonwealth to handle military justice.

    Recent press reports have commented upon the study into the judicial system under the DFDA by Brigadier the Hon. Mr Justice Abadee, a NSW Supreme Court Judge and Deputy Judge Advocate General. One reason the Chief of the Defence Force commissioned this report was the concern mentioned above, that the DFDA may not survive a further High Court challenge. This concern was heightened by recent successful challenges in the UK and Canada to convictions in military courts. The report is currently being considered by the Chief of the Defence Force, and it is therefore premature to speculate upon its contents, other than to note that it recommends a number of avenues to improve the operation of the DFDA.

    In October 1997, it was decided that a parliamentary inquiry by the Joint Standing Committee on Foreign Affairs, Defence and Trade would be established into the system of military justice. The inquiry will be broad in scope, examining the 'legislative framework and procedures for the conduct' of such internal Service mechanisms as boards of inquiry, as well as DFDA matters

    The Armed Forces Federation Of Australia

    The Armed Forces Federation of Australia was formed in the mid 1980's with the support of the Government. It was subject to a directive by the Chiefs of Staff Committee that it must be voluntary, self-supporting, non-industrial and without political affiliation, and accord with members' wishes. Also, there should be no obstruction to the Government's lawful direction to the Services, or the execution of such direction within the Services, and no interference in the command chain or disciplinary process.

    The aim of the Federation is to protect and promote the pay, employment conditions and welfare of serving members of the Australian Defence Force, irrespective of rank, sex, employment category or location. The Federation's operating network includes serving and retired ADF members, Government officials, representatives of the print and electronic media, parliamentarians, parliamentary and ministerial staffs, unions and professional associations and the Defence Force Remuneration Tribunal. The Federation has enjoyed moderate growth only, due probably to an ill-founded perception that its activities parallel those of unions. Many Service personnel would see this as being at odds with the ethos of the ADF and the traditional relationship the ADF has had with Government.

    The Federation considers that, if its role is to be properly recognised, its authority to act on behalf of ADF personnel has to be acknowledged in legislation. For example, the Federation feels its place before the DFRT should be expressed as an entitlement and not just allowed by grace and favour of the Judge.

    Endnotes

    1. See ADF Instruction 15/3 of September 1986.
    2. ibid, p. 546.
    3. Report to the Senate on The Elimination of Sexual Harassment in the Australian Defence Force. Department of Defence, December 1995.
    4. Senate Inquiry into Sexual Harassment in the Australian Defence Force. Submission by Headquarters Australian Defence Force. 15 November 1993, p. 14.
    5. ibid, p. 11.
    6. Faust, Beatrice. Sexual harassment and HMAS Swan: a case history. Policy, Autumn 1995, pp 44.
    7. Minister for Defence Science and Personnel. News Release, 20 January 1988.
    8. Middleton, Karen. Ministers object to HIV ban in forces. The Age, 24 November 1995, p. 4.
    9. Re: Tracey; Ex parte Ryan (1989) 166 CLR 518
    10. Report of the Defence Force Discipline Legislation Board of Review, May 1989, p. 185.
    11. Grove, Hon. Justice Michael. A uniform code for military justice-the Defence Force Discipline Act 1982. United Service, July 1995, p. 27.

    Chapter 12: Women in the Defence Force

    Background

    Women's services had been disbanded at the end of World War II, but were re-established in the 1950s largely because of manpower shortages. However, a limit of 4 per cent was placed on the employment of women in the three Services, although this quota appears to have been defied by the RAAF. Thus in 1954, women comprised 2 per cent of the RAN, 4 per cent of the Army and 5 per cent of the RAAF. In the late 1960s-early 1970s, the limit was increased to a maximum of 10 per cent in both the RAN and the RAAF, although numbers in fact remained well below this limit. The Army recruited women primarily on a replacement basis, resulting in a defacto quota of five to six per cent . In the International Year of Women in 1975, a working party was established to review the role of servicewomen. The resulting policy stated that women could be deployed on active service, but not in combat roles. Women were not permitted to carry arms, nor to serve in Divisional or Corps units other than medical units. In 1979, servicewomen were affiliated directly to Corps, female military training was realigned to bring it more in line with male training and equal pay was introduced.

    The Sex Discrimination Act 1984

    Section 43 of the Sex Discrimination Act 1984 (SDA) provided, by Defence request, that it was not unlawful for a person to discriminate against a woman on the grounds of her sex in connection with employment, engagement in or appointment to the Australian Defence Force in a position involving the performance of combat or combat-related duties.

    The Regulations made under the Act contained the following definition:

    Combat Duties. Duties requiring a person to commit, or to participate directly in the commission of, an act of violence against an adversary in time of war.

    Combat-Related Duties. Duties (other than combat duties) requiring a person to work in support of, and in close proximity to, a person performing combat duties, being work performed in circumstances in which the person performing the work may be killed or injured by an act of violence committed by an adversary.

    In 1984, as a result of applying these definitions, 17 000 (23 per cent ) ADF positions were identified as being open to both men and women in competition on merit.

    The ADF conducted several reviews over the following years, resulting in the opening of additional categories. In 1989, 28 562 positions, or 43 per cent of the ADF, were identified as being available to women in competition with men.

    The Opening of Combat-Related Positions

    The separation crisis of the late 1980s highlighted the need for the ADF to make the best use of the talents of its servicemen and women if it was to compete effectively as a prospective employer in a competitive society. With community trends increasingly for equal opportunity, it was clear that, if the ADF was to attract talented women to long-term careers, it must expand their roles and provide them with quality career paths.

    On 30 May 1990, the Minister for Defence, Science and Personnel announced, on the recommendation of the Chiefs of Staff Committee, that Australian Defence Force women would serve in combat-related positions. The policy was to be introduced over a three-year trial period, with a new body, the Combat-Related Employment of Women Evaluation Team, monitoring its impact on operational effectiveness in the Army. The controlled implementation of the policy was to ensure that any disruption to existing career structures, branch structures and, in the case of Navy, sea/shore ratios, would be minimised.

    The effect of this May 1990 decision on positions and employment available to women in the permanent element of the Services was as follows:

    The Navy opened up all surface ships to women, providing 14 900 positions out of a total of 15 800, or 94 per cent of the Force, in open competition. However, delays in posting women to some ships would occur until accommodation modifications were completed during refits. Navy expected to have 500 women at sea by the mid-1990s, as compared with the 40 it had in 1990.

    The Army anticipated that women would become eligible for about 17 000 positions out of 32 300, or 53 per cent of the Force. Examples of some employment which became available include handler aircraft, mechanic recovery, fitter armament and, in engineering, bricklayer, carpenter and joiner. The relatively smaller percentage of positions open in the Army was due to the higher number of positions and units directly involved in combat. The combat exemption still excluded women from infantry, artillery, armour and combat engineering.

    The Air Force opened all positions except those involving aircrew in combat aircraft (F/A-18s, F-111s, and P-3Cs) and the airfield defence guard category and mustering. Thus 20 737 positions out of 22 162, or 94 per cent of the Force, became available to women in competition.

    To sum up, in the 12 months from June 1989 to June 1990, the number of positions available to women more than doubled, from about 22 000 to nearly 53 000.

    Following an extensive review, the employment options for women were further expanded on 18 December 1992. The Minister for Defence Science and Personnel announced that he had accepted a recommendation from the Chief of the Defence Force to open a number of combat positions to women. The impact of this decision on the Services was as follows:

    In both the Navy and the RAAF, the proportion of positions open to women rose from 94 per cent to 99 per cent. In the Navy, the only employment category not open to women is Mine Clearing Diving. Although in his statement the then Minister, Mr Bilney, had anticipated that women would be serving on the new Collins class submarines from their entry into service, in fact submarine training is not anticipated to commence for women until 1999, due to accommodation considerations. Similarly, accommodation problems effectively reduce the number of positions available to women on surface ships, although virtually all categories are open to women. There are approximately 250 women currently posted to seagoing billets, compared with 40 in 1990. This figure will rise as accommodation modifications occur and new ships with appropriate facilities are introduced into service.

    The Air Force has opened all categories to women except Airfield Defence Guards and Ground Defence Officers, together with Surface Finishers and Electroplaters for health reasons.

    Army employment categories that remain closed to women as a result of the combat duties exemption are Infantry, Armour, Artillery and Combat Engineers. In 1993 it was claimed the new policy would allow women to serve in 83 per cent of Army employment categories. However, cutbacks in non-combat areas since then have reduced the proportion of positions open to women to nearer 70 per cent.

    Statistical Trends

    Statistical information has been collected since 1984 on the recruiting, average length of service, and retention rates for women. The continuing increase in the number and proportion of women in the Defence Force is illustrated in the Table below.(1)

    The number of women has increased across most categories of employment open to women, including non-traditional areas.

    Table 4: Number and Percentage of Women by Service

     

    Navy

    Army

    Air Force

    Total

    30 June 1984

    999

    1963

    1711

    4673

     

    6.0%

    6.1%

    7.3%

    6.5%

    30 June 1990

    1919

    2617

    3228

    7764

     

    12.3%

    8.6%

    13.7%

    10.8%

    30 June 1996

    2183

    2747

    2729

    7659

     

    15.0%

    10.6%

    16.0%

    13.3%

    The slight decrease in the number of women in the ADF since 1990 can be explained by the fall of around 12 000 in total ADF personnel numbers which has taken place since 1990. This fall is largely the result of the Force Structure Review of May 1991, with its initiatives on personnel reductions, civilianisation of positions and outsourcing of functions. On the other hand, there has been a significant increase in the percentage of women in the Services, due, in part, to the greater availability of career opportunities.

    Separation Rates

    When the last edition of this paper was published in 1990, high separation rates in the ADF were a significant issue. However, the recession of the early 1990s, with reduced employment opportunities outside the Services, effectively reduced separation rates, which have not been a general problem for the ADF since then.

    Until 1987, female wastage rates, as a percentage of female strength, were considerably higher than male wastage rates. However, this was largely due to the statistical practice of showing women on maternity leave as separations. In July 1987 the method of compiling statistics was altered to ensure that, while members on Maternity Leave and Special Leave Without Pay were included in the total figures for the permanent ADF, only permanent separations were included in the separations figure. Since then there has been no significant difference in the overall separation rates of men and women.

    Current separation rates for both men and women are shown in the following table. While the separation rate for female officers is somewhat higher than that for male officers, differences are insignificant for Other Ranks and in the ADF overall.

    Table 5: Separation Rates 1995/96

       

    % Population

    Officers

    Male

    7% of all male officers

     

    Female

    9.1% of all female officers

    Other Ranks

    Male

    9.7% of all male OR

     

    Female

    10% of all female OR

    Total

    Male

    9.1% of males

     

    Female

    9.8% of females

     

    Persons

    9.2%

    Senior Positions

    The number of senior positions (i.e. Major or equivalent and above) filled by women continues to increase. From July 1984 to 1987 there was an increase of 60 per cent (from 101 to 162) in the number of senior positions filled by women. By January 1990 the number had risen to 197, and by July 1996 the number had increased again to 326. This number equates to 7.1 per cent of senior positions being held by women. In the ranks of Senior Non-Commissioned Officers (SNCO) there were 125 women filling SNCO positions in January 1990, and in July 1996 that had increased to 232 women. This represents 4.4 per cent of SNCO positions.

    Traditionally women have attained the ranks of Colonel or equivalent within the Services only in the area of nursing. However, this is no longer the case. Excluding the area of nursing where there is one officer, there are currently five women in the ADF filling Colonel or equivalent positions. This growth is in line with increased training opportunities and experience available to women throughout their earlier careers.

    Distribution of Women

    Table 6: Distribution of Women Between Officers and Other Ranks

     

    30 June 1990

    30 June 1996

     

    Number

    %

    Number

    %

    Officers

    1310

    16.9%

    1715

    22.4%

    Other Ranks

    6454

    83.1%

    5944

    77.6%

    Total

    7764

    100.0%

    7659

    100.0%

    These figures indicate that, as at 30 June 1990, 16.9 per cent of women members were officers. The corresponding figure for male officers at that time was 18.0 per cent of the total male population of the ADF.

    By June 1996, 22.4 per cent of women members were officers compared with 21.1 per cent of males.

    Recent Initiatives

    In August 1994, the following four initiatives were announced to ensure that women in the ADF have the maximum opportunity to achieve their potential:

    • the establishment of the Defence Advisory Forum on Discrimination (DAFOD);
    • the development of performance indicators to measure the progress of women's careers against men's careers;
    • a study into barriers to women's career progression; and
    • a study on the retention of women.

    The first of these, the DAFOD, provides a visible integration between the ADF and external organisations for issues concerning discriminatory acts and practices. It enables the ADF to establish dialogue with external organisations on discriminatory issues.

    The second initiative in the list above, the performance indicators, will measure the career progression of women against normal male Service expectations. They will address the selection for promotion, selection for career enhancing training programs and selection for attendance at staff colleges.

    The Burton Report

    Dr Clare Burton, an eminent employment equity researcher and consultant, was selected to undertake the two studies mentioned above. The studies were combined in a report published in December 1996 entitled Women in the Australian Defence Force. The studies examined, among other issues, perceived barriers to women's career progression, posting and promotion opportunities, access to high profile appointments, conditions of service and employment, and cultural, social and institutional barriers which impede the competitiveness of women in the ADF. The focus of the report and its recommendations is on the structural and cultural changes which must take place within the ADF to remove barriers to women's full participation. This departs from the general tendency to see the major obstacles to women's integration in the more obvious areas of sexual harassment and unacceptable behaviour. It is also a change from the focus of EEO and gender integration which has been concentrated on intentional discrimination, particularly in the individual's interpersonal relationship, rather than on institutional sources of discrimination, i.e. the range of practices that lead to patterns of inequality.

    Consultants are being employed to assist with the implementation of the recommendations of Dr Burton's report. These recommendations are included at Appendix E of this paper, but some of her many findings can be mentioned here:

    First, on some attitudinal barriers to women's increasing participation in the ADF:

    • Although male resentment at the passing of the 'good old days' is lessening with a new generation of recruit, as women show themselves to be competent and good team members, and where technical requirements overshadow the physical, there is still considerable resistance. Some common reasons given for opposing women's participation were:
      • women should be confined to clerical, administrative, medical and other support areas
      • women cause disruption to male bonding
      • women's emotional and psychological make-up does not equip them for war
      • women's role is in the family and the community
    • Men are still confused at what affirmative action means, often seeing it as the promotion of women who are not the best qualified for the position. Men's overwhelming hostility to any positive discrimination in favour of women has resulted in many women opposing any form of affirmative action because it might undermine their acceptance by their male peers.
    • Many women are sympathetic to the difficulties experienced by men trying to cope with radical change and know it is unrealistic to expect rapid change in men's attitudes. But they do not accept that they, the women, should bear the brunt of the men's difficulties.

    Other barriers to women's increasing participation:

    • Women are under continual pressure to conform to male standards and expectations, to change themselves and their behaviour to fit into and be accepted by males in an environment dominated by male values, in which the 'male warrior' is the model of success. Women's work performance tends to be judged more harshly, and to be generalised to all of their sex in a way that male work performance is not.
    • The requirement for operational background as a condition for promotion to senior ranks constitutes an artificial institutionalised barrier to women's promotion beyond a certain point. This requirement, which often occurs even where it cannot be justified in relation to the position's demands, needs to be scrutinised from an anti-discrimination point of view.
    • Access to key postings tends too often to be based not on merit but on 'potential' for future advancement to very senior positions. This is indirectly discriminatory in that few women have the necessary experience (such as operational experience) and/or the qualifications to fill the highest ranks.

    What is needed to remove barriers:

    • Dr Burton emphasised the point that, without the support of active interventionist strategies, time alone will not solve the problem of discrimination against women in the ADF.
    • The key area where change is needed is in leadership i.e. there must be unequivocal commitment to, and support for, gender integration from leaders. While individual leaders display this commitment at present, it is not pervasive enough to be regarded as a collective, institutionalised commitment.
    • The perspectives of women and of members with dependants must form part of the preliminary thinking about reform and restructuring. Women must form part of all advisory and consultative structures and decision-making bodies. For example, a rule is needed requiring women's representation on Promotion Boards and Promotion Advisory Committees.
    • There is a need to alter some very traditional cultures within the ADF in the direction of a greater focus on the outcomes of effective performance rather than persisting with traditional, 'taken-for-granted' assumptions.

    Reasons for women leaving the ADF:

    • While women's average length of service in each of the Services remains considerably lower than men's, during the period 1991-94 women's length of service increased at a faster rate than that of men. However, the 1994 Defence White Paper warns that the ADF must face the prospect of high separation rates. Many young Australians will not remain with the one employer throughout their working lives, and it is likely that, in keeping with this trend, many Service members will seek other employment after about six years' service. Any consideration of women's retention needs to be put into the context of overall retention problems and reasons for high wastage.
    • There is a need for active recruitment strategies directed at women.

    Dr Burton is generally optimistic about women's participation in the ADF. While conceding that the segregation-by-sex of occupations within the military will continue to exist for the foreseeable future, she is confident women will broaden their choices as the attitudinal and institutional barriers are removed. She quotes the EEO dictum opportunities shape aspirations i.e. drive and motivation are very much products of the opportunities that are perceived to be available.

    One result from the study was the establishment of the Defence Force Equity Organisation (DFEO). The DFEO will develop and promote equity strategies in order to ensure gender integration and employment equity. It will analyse current processes for compliance with anti-discrimination legislation, and will develop Equal Employment Opportunity material and appropriate training programs.

    Should Women Occupy Combat Positions?

    Much has been written on this subject, for and against, and only a few observations will be made here.

    Probably the major argument put forward in favour of removing all barriers to women's participation is that exempting women from combat duty while accepting them in combat-related positions is somewhat artificial. In war, women flying transport aircraft can be just as much exposed to the decisions of battle as are fighter pilots. Similarly, ships are either in action or they are not. It is also argued that most of the RAAF and RAN positions, and some of the Army positions, still closed to women generally require technical skills, which women are completely capable of learning, rather than physical strength, where they may be disadvantaged. Technological advances are making intelligence-skills such as the ability to read a computer screen-more important than muscular strength.

    Against this it must be emphasised that combat capability is a first concern, and combat effectiveness cannot be compromised if the ADF is to fulfil its role. In areas such as infantry or artillery that effectiveness still depends on physical strength rather than solely on high-tech weapons systems.

    The bulk of closed positions are in the Army, and a good portion of these are infantry, requiring strength and endurance e.g. the capacity to carry a 27kg pack. Regarding these positions:

    • Surveys indicate that few women recruits would choose this option.
    • Most women, and a good proportion of men, would fail the rigorous physical tests required.

    In addition to combat effectiveness, community research shows that most women share the view that it is inappropriate to force women to engage in hand to hand combat, and they view such employment as a waste of their talents and capabilities.

    While the nature of many officer classifications and other rank employment trades in combat support and combat service support do not require rugged physical training, the opposite largely remains true for combat arms. Rugged physical effort is still very much a feature, not only of activities such as changing tank tracks and loading tanks and guns, but of infantry minor tactics such as digging-in for protection, patrolling with packs and radios, camouflaging vehicles and tents. These types of activities are still fundamental to soldiers engaging in combat. They remain valid whenever combat troops engage, despite the apparent 'distancing' from the battle field created by technological advances in, especially, transport and firepower, and despite the evolution of concepts such as information warfare which aims to defeat an enemy without necessarily 'firing a shot'.

    A much greater variety of mechanical handling equipment, automatic loading systems, computer controlled firing systems and so on are built into modern platforms, and are likely to be widely available to a deployed force today compared with those provided to Australian forces in the past. Their existence and prevalence do change the nature of warfare but only for soldiers in support of the combat arms.

    The terms 'combat' and 'combat-related' are still very much utilised. In any battle with an enemy there will be a theatre of operations which can be divided, both conceptually and in reality, into the 'combat zone' on the one side, and the communications zone and support area or 'non-combat zone' on the other. This remains true whenever combat troops engage in combat despite the reach of modern weapons systems, the tactics of 'guerilla' soldiers and the evolution of information warfare.

    The key to the distinction in the purpose of the troops and the likelihood of direct combat is that in the combat zone the prime purpose of combat troops is to engage the enemy in combat i.e. to seek out and destroy. In the communications zone/support area, where the environment is more benign, the prime purpose of troops is to support combatants in the combat zone. That long-range weapons may target a storage site in the 'non-combat zone', disrupt the lines of communication and incidentally maim troops at the storage site does not change the purpose of those troops. This distinction between the two areas and types of employment is important in determining employment categories that women are eligible for.

    ADF experience regarding the opening of combat-related positions to women is that assimilation is a slow process, as it takes time to train personnel for particular types of employment and for requisite experience to be gained prior to progression into more senior positions. The opening of combat duties to women would need to follow a similar or even slower progress due to the anticipated fewer number of women who would be suitable for such employment. In any case, the need for some years ahead will be assimilation into the 30 000 odd positions opened in the last decade. There is likely to be steady acceptance of women in the new positions, but the mechanics of posting and promotion mean it will be many years before women gain their due proportion of placements in these new positions.

    Hugh Smith argues in a recent paper on the impact of the DER that emphasis on combat and combat-related activities-the move to the 'sharp end'-will probably reduce opportunities for females, especially in the Army, by reducing those areas in Army where women have been making their principal gains in recent years.(2)

    The establishment of the Defence Force Equity Organisation (DFEO) mentioned earlier will assist in exploring issues such as impediments to positions that inhibit women from reaching their full potential within the ADF. The issue of women in combat positions may be explored more fully by the DFEO. It will be important to identify skilled positions where women could make an effective contribution, and which may provide good promotion avenues, but which may have a 'combat' designation.

    Endnotes

    1. The figures in the following tables were obtained from Defence. Because this chapter was completed significantly before the rest of this paper, the latest figures shown are for 30 June 1996.
    2. Smith, Hugh. A brave new world? Working Paper No. 47, Australian Defence Studies Centre, August 1997, p. 5.

    Chapter 13: Conditions Relating to Overseas Service

    On 30 June 1997, 451 ADF members were serving overseas on long-term duty.

    The DER Secretariat Papers noted that Defence spent $85 million on overseas postings and visits in 1995-96, with the greatest expense being those who have posts in overseas countries. The recommendation was made that the number of Defence personnel serving in the USA and the UK be reduced by between 10 and 20 per cent. It was estimated a 10 per cent reduction would save around $13.2 million.(1)

    Commonwealth Conditions for Long-Term Postings

    Special conditions of service for an overseas Defence posting, for example as Defence Attache, an exchange posting or for long-term courses, have been traditionally very similar to those available to civilian public servants on overseas service. Thus the package of conditions and allowances common to all Commonwealth employees on a long-term posting overseas includes the following:

    • overseas removal entitlements with storage at Commonwealth expense of any furniture and personal effects left in Australia;
    • reimbursement of loss on sale of motor vehicle;
    • business-class travel to and from the post;
    • Settling In and Settling Out Allowance to cover the additional cost of meals when a member is obliged to temporarily reside in hotel-type accommodation;
    • interest-free loan called Outlay Advance to help with establishment costs at the overseas post. The maximum loan available at present is $7629;
    • payment by way of reimbursement for unquantifiable expenses arising from a posting overseas, such as costs associated with transferring money and converting electrical appliances, is given by way of a Transfer Allowance;
    • payment of a tax free Overseas Living Allowance to cover additional living expenses at the post;
    • subsidised housing at the post;
    • commonwealth coverage of medical/dental expenses for dependants;
    • assistance with education costs for children at the post or in Australia;
    • reunion travel in certain circumstances when members are separated from dependants.

    When members are posted to localities involving particular hardships or disabilities, there are additional entitlements to compensate for those disabilities. These include:

    • Difficult Post Allowance, which is paid in addition to Overseas Living Allowance;
    • additional Recreation Leave, with the number of days varying according to the locality;
    • return travel at Commonwealth expense to a specified locality providing relief from the conditions at the post.

    Engagement in UN and Other Multi-National Force Activities

    Conditions of service for ADF members who are on duty overseas began to attract attention with the development of UN and other multi-national force activities, especially with the dramatic increase in peacekeeping activity in the early 1990s. These post-Cold War operations were generally more complex than earlier UN activity, and with the added complication of peace enforcement, raised important conditions of service issues.

    In the peacekeeping operations of the 1980s and early 1990s, matters such as taxation concessions, specific allowances, compensation and hazardous service provisions were generally organised on a case-by-case basis, with service conditions specific to the operation being included in the Cabinet submission prepared for the operation as a whole. This led to some criticism, mainly because of apparent inconsistencies between the conditions provided for different operations, and also because conditions of service were often not announced until the operation was well under way.

    In 1993, a new framework was introduced to formalise conditions of service arrangements for peacekeeping operations as part of a more coherent policy approach to ADF peacekeeping. Key definitions in the new framework were those of 'warlike' and 'non-warlike' service. As the then Minister for Defence Science and Personnel, Senator Faulkner, said in a News Release in May 1993:

    An important part of the new structure will be a standardised definition of 'warlike' and 'non-warlike' service, to be determined by the Minister for Defence and the Prime Minister at the time the decision to deploy Australian personnel overseas is made. Once this decision is made the different conditions and entitlements will automatically flow for the personnel serving in that deployment. In contrast, under the previous system, a number of Ministers made decisions under their varying legislation, leading to a delay in compiling a full set of conditions.

    Warlike operations are those military activities where the application of force is authorised to pursue specific military objectives, and there is an expectation of casualties. For example, a state of declared war, conventional combat operations against an armed adversary, and peace enforcement operations.

    Non-warlike operations are those military activities short of warlike operations where there is risk associated with the assigned task(s) and where the application of force is limited to self defence. Casualties could occur but are not expected. These operations can encompass but are not limited to:

    • Hazardous activities, which are those exposing individuals or units to a degree of hazard above and beyond that of normal peacetime duty, such as mine avoidance and clearance, Defence Force aid to the civil power, Service protected or assisted evacuations and other operations requiring the application of minimum force for the protection of personnel or property.
    • Peacekeeping, an operation involving military personnel, without powers of enforcement, to help restore and maintain peace in an area of conflict with the consent of all parties.

    Conditions of service for these various types of operation include:

    For warlike operations:

    • exemption from taxation for salary and allowances;
    • additional home loan assistance from the Home Loan Assistance Scheme;
    • War Service Leave in addition to accrued recreation leave;
    • the Australian Active Service Medal may be recommended.

    For non-warlike deployments:

    • Overseas Forces Rebate applies to salary and allowances;
    • additional Recreation Leave;
    • the Australian Service Medal may be recommended.

    For both warlike and non-warlike deployments:

    • payment of a tax-exempt deployment allowance, with a daily rate varying from $23.50 to $75, depending on the degree of situational and environmental hazard. For example, the deployment allowance for the Rwanda contingent was set at $51 per day;
    • pre-embarkation and disembarkation leave and travel can be permitted;
    • special removal provisions for member's family to travel to a locality within Australia where extended-family support is available;
    • 'Relief Out-of-Country Travel Fare Assistance', which is intended to assist personnel to have time away from the arduous nature of the deployment;
    • one three-minute phone call to Australia each fortnight;
    • exemption from R&Q charges;
    • eligibility to entitlements under the Veterans' Entitlements Act.

    If a deployment period is for less than six months, a number of the above conditions will not apply.

    Endnotes

    1. DER Secretariat Papers, p. 278.

    Chapter 14: Return to Civilian Life

    As previously noted, the Defence Force is no haven for the aged and infirm, despite the extension of some retiring ages in 1995. The statutory retiring ages (General List), both prior to 1995 and since that date, are shown as follows:

    Rank

    Retiring Age Pre-1995

    1995+

    General and Equivalent

    63

    63

    Lieutenant General and Equivalent

    60

    60

    Major General and Equivalent

    57

    57

    Brigadier and Equivalent

    55

    55

    Wing Commander

    55

    55

    Squadron Leader

    55

    55

    Lieutenant Colonel

    50

    55

    Commander

    50

    55

    Major

    47

    55

    Lieutenant Commander

    47

    55

    Captain

    47

    55

    Lieutenant (Navy)

    47

    55

    Lieutenant

    47

    55

    Sub-Lieutenant

    45

    55

    Flight Lieutenant*

    45

    55

    Flying Officer*

    45

    55

    *RAAF retiring ages are for General Duties members.

    For all other members of all Services, retiring age is 55. Certain prescribed jobs permit service beyond the stipulated retiring age.

    Because of the likely recruitment problems over the next decade, Dr Jans made the suggestion in 1988 that the retiring age be extended to the mid-50s for all ranks up to Lt. Col. and equivalent(1)he eventual change in 1995 essentially brought the three Services into line, with all ranks Brigadier (and equivalent) and below having the common retirement age of 55.

    When the change was made in 1995, all affected General Service officers were given the right to stay with the old retirement age schedule.

    Defence Force Retirement and Death Benefits Scheme

    Background

    Until 1 October 1991, when it was replaced by the Military Superannuation and Benefits Scheme (MSBS), the Defence Force Retirement and Death Benefits Scheme (DFRDB) was the ADF's superannuation scheme. A summary of the MSBS will be given later.

    The DFRDB was established by the DFRDB Act 1973 and came into operation with effect from 1 October 1972, replacing the DFRB scheme, which had begun in 1948.

    On 30 June 1996, there were still 20 485 contributors to the DFRDB. In addition, there were 46 540 recipients of pensions under the scheme, with the average annual pension being $15 254.

    Principal Features:

    The DFRDB is a defined benefit scheme, and is totally unfunded i.e. all contributions go into consolidated revenue.

    Contributions

    Members of the ADF serving on continuous full time duty for a period of not less than one year contribute under the DFRDB scheme at the rate of 5.5 per cent of salary plus Service Allowance. The more than 20 000 members paid $50 078 000 in contributions (into consolidated revenue) in 1995-96.

    Retirement Pay

    In order to maintain the operational capabilities of the Defence Force, Service personnel are required to retire at relatively young ages and may be retired even earlier on the grounds of invalidity whilst still capable of performing adequately in civilian employment. Members who separate from the ADF on other than invalidity grounds are entitled to retirement pay on separation after completion of a minimum of 20 years service or, if they have reached statutory retiring age for their rank, on completion of 15 years service. Retirement pay ranges from 30 per cent to 76.5 per cent of annual salary, based on length of service. The details are as follows:

    Years of Service

    % of Pay

    Years of Service

    % of Pay

    15

    30.00

    28

    47.50

    16

    31.00

    29

    49.25

    17

    32.00

    30

    51.25

    18

    33.00

    31

    53.25

    19

    34.00

    32

    55.50

    20

    35.00

    33

    57.75

    21

    36.50

    34

    60.25

    22

    38.00

    35

    62.75

    23

    39.50

    36

    65.25

    24

    41.00

    37

    67.75

    25

    42.50

    38

    70.50

    26

    44.00

    39

    73.50

    27

    45.75

    40

    76.50

    In the financial year 1996-97, of the 1,793 DFRDB contributors who left the Defence Force, 1,377 received retiring pensions.

    According to the DFRDB Act, all officers should serve until they reach a certain age, known as the notional retiring age. This age varies according to the rank that officers hold at the time they retire:

    Rank

    Age

    Major (or equivalent) and below

    42

    Lieutenant Colonel (or equivalent)

    45

    Colonel and Brigadier (or equivalent)

    50

    Major General (or equivalent)

    52

    Lieutenant General and General (or equivalent)

    55

    Officers who voluntarily retire or are discharged on disciplinary grounds before reaching notional retiring age have a penalty applied to the calculation of their retirement pay. The penalty is a three per cent reduction in retirement pay for each full year that their age on retirement is less than their notional retiring age. The imposition of this penalty has been criticised as discriminatory and a disincentive to seek promotion, and its removal was recommended in the Cross Report.(2) However this change was not recommended in the DFRDB Review Committee Report of June 1990 which proposed introduction of the MSBS. And the Human Rights and Equal Opportunity Commission, when considering a case in 1996, reached the view that there is no discrimination in relation to notional retiring age.

    Commutation

    A portion of the retirement pension may be commuted to a lump sum, and this option is almost invariably taken. A Major, for example, who retires at 42, after 20 years service, and receiving a salary of $56 156 per annum, would be entitled to a lump sum of $93 359 and an annual pension of $16 545; or $19 654 without commutation. The decision to commute can be made up to three months before or within a period of one year after retirement. A total of 1341 DFRDB retirees during 1996-97 elected to commute part of their pension, receiving an average lump sum of $84 583.

    The maximum amount a member could commute was set originally at four times the retirement pension. As a result of changes to the tax on superannuation lump sums introduced in 1983, the amount of commutation lump sum is being increased by 0.05 per year, up to a maximum of five times the amount of retirement pension. This was designed to offset the effects of the increased taxation. During 1997-98, for example, retiring members would receive a maximum commutation lump sum of up to 4.75 times their retirement pay.

    Major Defect

    The major criticism of the DFRDB has related to those who resign from the ADF before completing 20 years service. Where a member leaves the scheme without entitlement to retirement or invalidity pay, he is entitled only to a refund of contributions i.e. without interest being paid on these contributions and without access to the employer component. This contrasts with the practice in virtually any other superannuation scheme, and does not meet the requirements of the Occupational Superannuation Standards [replaced in December 1993 by the Superannuation Industry (Supervision) Act] which now regulates all superannuation schemes in both the private and public sectors. The Cross Report recommended that interest be paid on contributions, but this was not recommended in the DFRDB Review Committee Report. A total of 612 members received refunds of contributions amounting to $7 079 000 during 1995-96.

    However the benefits available to members who retire after 20 years are very generous. It is possible for a member to resign on an indexed pension for life, beginning at 35 per cent of final pay, together with a lump sum, in his/her late 30s. The result has been that separation rates in the 12-20 years of service period were very low, but there was a dramatic rise at the 20 year point when many valuable and experienced members left the ADF because the lump sum component of their entitlement becomes available only on resignation.

    As with any defined benefit scheme, the DFRDB has been costly to the employer. Payment of pension benefits from a relatively early age is one expensive aspect of the scheme. In the 1990-91 financial year, the last full year of exclusive DFRDB membership, members' contributions amounted to $115 million whereas benefits paid by the Government amounted to more than $700 million. In 1995-96, although members' contributions had fallen to $50 million, the Government had to pay $829 million in benefits to the 46 540 recipients. However, it would be misleading to compare these figures directly with other schemes since contributions go straight to Consolidated Revenue and there is no employer contribution by the Government. That is, entitlements only crystallise when they become payable. Also in any consideration of the total cost of the scheme it must be remembered that for members leaving before the 20 year point, the only entitlement is a refund of contributions (plus the employer's 3 per cent productivity payment).

    The cost to the Government of the DFRDB is expected to rise steadily for several decades, although, because of factors such as the lower long term cost of the MSBS and the expected fall in number of defence personnel as a percentage of the total population, the outlay on defence superannuation as a percentage of GDP should begin to fall soon after the year 2000. More information on this trend is given later in this chapter.

    Invalidity and Spouses Benefit

    A member who is retired medically unfit from the Defence force is entitled to an invalidity benefit from the DFRDB in addition to any compensation paid by Repatriation or the Commonwealth. The level of benefit is calculated on the assessment of the percentage of the member's incapacity in relation to the appropriate civil employment, and is intended not as compensation but to maintain income for that portion of the member's life during which the incapacity persists.

    The DFRDB Scheme provides cover for dependants' benefits in the event of the member's death.

    The DFRDB Review Committee Report discussed the lower pension payable to DFRDB widows (62.5 per cent of contributor's pension entitlement) than to widows under the Commonwealth Superannuation Scheme (CSS) widows (67 per cent of contributor's pension entitlement) when a member dies in service, but concluded the inequity is more apparent than real. This is for two reasons:

    • Whereas the DFRDB widow receives benefits based on 40 years service in all circumstances, the CSS pension is calculated on actual and prospective service, and is therefore variable, with only the few members who have sufficient actual and prospective service receiving the top level.
    • The DFRDB pension is fully indexed; the CSS pension is partly indexed, in that only a portion of the pension, the Government financed component, receives the CPI percentage increase.

    The result is that the DFRDB widow's pension is at 47.8 per cent of the member's salary and is fully indexed; whereas the CSS widow's pension is at a maximum of 48.6 per cent of the member's salary and, being partly indexed, is equivalent to 41.9 per cent fully indexed. The average widow/er's pension is about $12 000.

    DFRDB and CSS: a Comparison

    The Cross Report provided several case comparisons between the DFRDB Scheme and the CSS, with the former proving superior at each salary level in the examples given.(3)

    Recent Changes

    The DFRDB Review Committee, which reported in 1990, proposed only comparatively minor changes to remedy perceived deficiencies. There have been no changes since, although the superannuation surcharge proposal currently being debated may have some impact.

    Military Superannuation and Benefits Scheme

    Background

    On 11 May 1989, David Simmons, the then Minister for Defence Science and Personnel announced a review of the DFRDB Scheme. The review arose for a number of reasons. The ADF had advised the Minister that the DFRDB Scheme no longer met Service objectives nor provided the right incentives to those who make the profession of arms a lifetime career. In addition, as mentioned earlier, the DFRDB Scheme met neither the letter nor the spirit of the Occupational Superannuation Standards [replaced in December 1993 by the Superannuation Industry (Supervision) Act] which regulated all superannuation schemes in both the private and public sectors.(4)

    In August 1989, the Minister appointed a committee headed by Sir William Cole, a retired Secretary to the Department of Defence, to review the DFRDB Scheme. The DFRDB Scheme Review Committee presented its report in June 1990, and on 8 August 1990 the then Minister for Defence Science and Personnel, Gordon Bilney, announced a new superannuation scheme, the Military Superannuation and Benefits Scheme (MSBS), to take effect from 1 October 1991. The Bill for the Military Superannuation and Benefits Act 1991 was introduced on 13 March 1991 and passed the Senate on 21 August 1991.

    All members of the DFRDB had an option until 30 September 1992 to remain in the DFRDB Scheme or to transfer to the MSBS. 38,355 members chose to transfer, leaving 26 848 in the DFRDB at 30 June 1993.

    The following summary of the MSBS lists its more significant features, especially those which contrast with the DFRDB Scheme.

    Principal Features

    Contributions

    • The MSBS is a partially funded scheme; member contributions and the 3 per cent benefit are invested in a fund, with the eventual return depending on the performance of the fund. This contrasts with the DFRDB, which is totally unfunded i.e. all contributions go into consolidated revenue.
    • The MSBS has the variety of features common to modern superannuation schemes e.g. flexible contribution rates, and the choice for retiring members of a lump sum benefit, or a pension, or a combination of both.
    • Membership is compulsory for all full-time Permanent Force members. There is a set base member contribution rate of 5 per cent , with an option to contribute additional amounts of up to 5 per cent in minimum increments of 1 per cent .
    • Unlike the DFRDB Scheme, in which contributions cease when a period of LWOP exceeds 21 days, a member can continue to contribute to contribute in some circumstances despite LWOP exceeding 21 days e.g. during a period of unpaid maternity or paternity leave of up to 9 months.

    Benefits

    • In contrast with the DFRDB, the MSBS is a split benefit scheme i.e. members receive a defined benefit from the employer provided component, and an accumulation benefit from members' contributions plus interest.
    • Upon separation, members have the option of collecting their accumulated member contributions plus earnings or preserving them in the MSBS at the fund earning rate.
    • The employer financed benefit is a multiple of the average salary received over the last three years of service. It accrues at 18 per cent per year for each of the first seven years of service; at 23 per cent for each of the next 13 years; and at 28 per cent per year for all service in excess of 20 years. A Major, for example, who retires with 20 years service and a final average salary of $56 156 would be entitled to an employer benefit of $229 500 (4.25 times $54 000) payable at age 55. The benefit is indexed to CPI, to maintain its value, until it becomes payable. It can be paid as a lump sum, or 50 per cent or more of the lump sum can be converted to a pension. At age 55, the lump sum is divided by a factor of 12 to give the annual pension. After resignation, the unfunded portion of the employer benefit is indexed to CPI but the funded portion continues to increase by the Fund earning rate.
    • Members who have a compulsory retiring age less than 55 may take the employer financed benefit as a non-commutable pension, payable on leaving the Defence Force. For members with less than seven years service, access to the employer benefit is phased in. The three per cent productivity benefit is always payable in full, but the remainder of the employer benefit is phased in as follows:

    Completed Years

    % of employer share

    4 years or less

    40

    5

    50

    6

    75

    7

    100

    • Unlike the DFRDB Scheme, MSBS members who serve less than 20 years have their accumulated contributionsandearnings returned to them, as well as accruing an entitlement to an employer benefit and the 3 per cent benefit.

    Death Cover

    The spouse of a member who dies in service receives a refund of the member's contributions and interest. An employer-financed benefit is paid and is calculated as if the member had retired at age 55, or retiring age for rank, whichever is the greater. The employer-financed benefit can be taken as a lump sum or as a pension. The pension is 67 per cent of the pension the member would have received. If the member dies as a pensioner, the spouse receives 67 per cent of the pension payable at date of death. Where a spouse's pension is payable, additional pension is paid for children under age 16 or full time students between the ages of 16 and 25. The maximum pension payable to a spouse and children cannot exceed 100 per cent of the member's pension. Pensions are payable also if a contributor or pensioner is survived by an orphan. The above pensions are indexed by CPI.

    Invalidity Benefit

    Members who are retired medically unfit from the Defence Force receive a refund of contributions and interest. They may also receive a non-commutable, indexed pension, which is calculated on the basis of actual and prospective service, and determined also by the level of incapacity to engage in suitable civil employment. The pension continues while the incapacity persists. Members whose level of incapacity does not entitle them to a pension receive an employer-financed benefit, based on completed service, payable at age 55.

    Transfer Option

    As mentioned earlier, existing members of the DFRDB Scheme had 12 months from the date of commencement of the MSBS i.e. until 30 September 1992, to choose whether to transfer to the MSBS. All those who joined the ADF after 1 October 1991 automatically became members of the MSBS. Some criticism was made that DFRDB members should have been given longer to make their decision, on the grounds that frequent changes to general superannuation rules at the time, and the proposed cuts to personnel numbers in the Force Structure Review in May 1991, made the choice extremely difficult. And in 1996 when members of the earlier public service superannuation scheme, the CSS, were again given the option of transferring to the newer scheme, the Public Sector Superannuation scheme, (PSS), there was some criticism that DFRDB members should also have been given another transfer opportunity.

    However, the feeling in Defence is that ADF members made a valid election relevant to their circumstances at the time and based on adequate information and assistance. A year before the 12 months election period began, each ADF member received a personal information package on the new scheme, including an informative 53 page booklet, entitled MSBS: the Guide. A hotline was set up to answer members' queries, presentations were given around Australia, and articles appeared regularly in the Service papers on aspects of the schemes. Also, comparison with the public service situation is not appropriate as the two military schemes differ markedly from the two public service schemes with the choice before the ADF members being much more clearcut. In addition, the initial election period for the public service was only six months.

    Retention Benefit

    The then Occupational Superannuation Standards prevented the repetition in the MSBS of the benefits structure of the DFRDB Scheme which allowed members to receive a life indexed pension, part of which could be commuted to a lump sum, on resignation at any age after serving 20 years. The absence of this benefit, combined with the more generous treatment of those serving less than 20 years, was seen as lessening the incentive for members of the ADF to serve to the 20 year point. To offset this, the Review Committee recommended a retention benefit equal to one year's salary including Service Allowance before tax, payable to members who completed 15 years of continuous full-time service. The Government decided that the following conditions would apply to eligibility for the retention benefit:

    • Members must have reached a specified minimum rank level at 15 years, Sergeant (or equivalent) for other rank members, and Major (or equivalent) for officers.
    • All officers who have been promoted from the ranks are eligible after 15 years regardless of rank.
    • In addition, certain other members e.g. those with particular skills, may be offered the retention benefit despite failure to reach the required rank level.
    • Members accepting the benefit must agree to serve another 5 years; members who resign before completing this service commitment must repay part of the gross retention benefit. This would entail distinct tax disadvantages.

    Changes

    Since the inception of the MSBS, the only changes of substance have been those affecting civilian schemes as well. For example, in June 1993 taxation rebates for superannuation contributions for those earning under $30 000 per annum were introduced, and became available to MSBS members. And the move to preserve members' contributions until age 55 (and eventually age 60), which is to become effective in all superannuation schemes from 1 July 1999, may also affect service personnel.

    The Superannuation Contributions Tax, introduced with the budget on 13 May 1997, is aimed at the employers' superannuation contribution to those on higher incomes, and would normally affect only officers from around Major or equivalent in the ADF. However, it may also impact on those lower ranked personnel who, because of the nature of their work, receive large allowances or a retention bonus. For example, pilots, SAS members and submarine crews could well be pushed into higher income brackets and become liable for the superannuation tax.

    Comments

    The MSBS meets the requirements of the Superannuation Industry (Supervision) Act 1993, and resolves some anomalies in the DFRDB. It is a vast improvement on the DFRDB for short term employees, and does not disadvantage Service personnel relative to the civilian community. However, most DFRDB scheme members who intended to serve to the 20 year mark considered it financially advantageous to remain in the DFRDB. The introduction of the MSBS ended entitlement for future members to a pension after 20 years service, and was initially criticised as another step in the alignment of military conditions with those of the Public Service. However, the basic consideration in the development of the MSBS was compliance with the Superannuation Industry (Supervision) Act, which sets out the Government's arrangements for all superannuation. Only non-compliance with the official superannuation standards could accommodate retention of the pension and commutation options at an early age. The MSBS was designed with the needs of its members in mind, and there are significant differences from the public service schemes, for example in invalidity benefits.

    One disparity between the MSBS and the PSS, the APS superannuation scheme which began in 1990, is with vesting. The PSS allows for the employer benefit to be fully vested at four years, whereas the MSBS does not allow full vesting until year seven. This was introduced deliberately to assist in the retention of ADF personnel in the early years of service.

    Mr Bilney stated in August 1990 that the MSBS eventually would result in savings for the Government, but not until the scheme had been operating about 35 years.

    The Australian Government Actuary has recently published a report on long-term costs of Defence superannuation (i.e. both DFRDB and MSBS), using data to 30 June 1996. Projections are given of the actual employer cost of the two schemes as a percentage of GDP.(5) These show that outlays on superannuation as a percentage of GDP stay relatively constant until just after the turn of the century. Outlays then decrease steadily as a percentage of GDP, mainly for the following reasons:

    • the MSBS is expected to be cheaper in the long term than the DFRDB
    • the number of defence personnel is expected to fall as a percentage of the total population

    The figures show current employer cost as 0.19 per cent of GDP, and suggest this will fall to 0.11 per cent of GDP by around the year 2035.

    Resettlement

    The Defence Force considers that having stressed military skills, some of which have little application in civilian life, it has an obligation to make provision for resettlement, especially of longer serving members, ensuring easy transition into civilian life. Personnel are given encouragement to prepare thoroughly for this transition, obtain advice on their entitlements and start planning for their discharge well in advance.

    The Defence Force resettlement scheme has the following objectives:

    • The member should be able to transfer from his service to civilian occupation with the minimum involuntary break in continuity of employment.
    • In the interests of the community and the individual, the member should be employed in an occupation which will make the best use of his qualifications, skills and experience.
    • The resettlement measures should always take into account the wishes and needs of the member.

    Resettlement arrangements comprise:

    Discharge Resettlement Training (DRT). Long-serving members (generally those with 20 years' service) may be relieved from their service duties to undertake DRT (formal courses or on-the-job training) for up to 20 working days. Instead of formal courses, outplacement counselling, involving advice in areas such as job options, resume preparation and job search strategies, is available for skilled personnel who do not have a clear idea of what field of employment they wish to enter after discharge. Attendance at DRT courses can be deferred for up to six months after discharge.

    Resettlement Seminars. These are provided at ten locations around Australia. They are extensions of unit counselling and cover topics such as job interview techniques, stress management, investment, home mortgage and taxation.

    The Services Vocational and Educational Training Scheme (SVETS). This provides a 75 per cent refund of fees and books (100 per cent for long-serving members) subject to satisfactory conclusion of an approved course taken in the member's own time.

    Civilian Recognition of Military Qualifications. An increasing number of the qualifications obtained in service are recognised formally for civilian trade and other requirements. The Army has generally led the way, beginning a serious pursuit of civil accreditation in 1990. In November 1991, a National Framework for the Recognition of Training was published and endorsed for implementation by Commonwealth and State ministers. The RAAF and the Navy are not as advanced in civil accreditation, but are making progress.

    Resume Preparation. Members with fifteen or more years service are eligible to have a resume professionally prepared and be reimbursed up to 75 per cent of the cost.

    Commutation of Pension. This is officially considered a resettlement measure and is commonly used by eligible members to pay out mortgages (often in conjunction with the Defence Service Homes Scheme), buy businesses or otherwise invest. This is a feature of the Defence Force Retirement and Death Benefit scheme.

    Job Search Leave.Long term members are eligible to be granted up to three days leave for interviews, employment advice etc.

    Glenn recommended additional resettlement help, in the form of reimbursement of costs incurred in training for transition to a new career. This proposed Resettlement Assistance was intended especially for those for whom the transfer to the community may be more difficult; for example, those in mid-career.

    Separated personnel who are members of the Army Health Benefits Society can, if they wish, retain membership, which would be financially preferable to transferring to another scheme.

    Endnotes

    1. Jans Report, p. 65.
    2. Cross Report, pp. 322, 325, 347.
    3. ibid, pp. 328-330.
    4. ibid, p. 3.
    5. Military Superannuation and Benefits Scheme and Defence Force Retirement and Death Benefits Scheme (MSBS and DFRDB). A report on long-term costs carried out by the Australian Government Actuary. Canberra, 1997, p. 19-21.

    Chapter 15: Conclusion

    It seems there has been significant progress in the personnel field during the last seven years, with new policies being developed and implemented in a number of areas and policy decisions pending in others. Generally there have not been the large initiatives that were seen in the 1980s-creation of the Remuneration Tribunal, the Defence Housing Authority, and the Military Superannuation and Benefits Scheme-but these were in response to long overdue need. Although the trend towards organisational integration has continued, the main process seems to have been in the refinement of existing policies and improvements in lifestyle and family assistance. In the near future, significant structural changes are likely in pay and allowances, and possibly in accommodation assistance and compensation. A good feature of recent policy changes has been the fundamental research which has preceded the decision. On occasions this has seemed excessive and repetitive, with reports shelved and decisions deferred, but the general approach has been preferable to making relatively uninformed and expensive decisions.

    Following is a brief summary of the situation for each chapter in the paper:

    Regulation of Service Conditions.The DFRT has been a definite step forward, and appears to have adjusted satisfactorily to workplace bargaining. The Defence Reform Program is expected to tackle some of the problems in the system, and it is to be hoped any change will preserve the independence of the Tribunal.

    Pay.During the period 1990-96, ADF and APS pay have remained comparable. In contrast to the previous period, 1983-1990, both ADF and APS pay have increased more than the CPI, and some elements in each have increased more than the AWE. Important restructuring is taking place in ADF salaries, with greater flexibility likely in determining remuneration.

    Allowances.As regards Service Allowance, the period 1990-96 was similar to the previous period, 1983-1990, with ADF personnel again being disappointed with the Service Allowance review due to unrealistic expectations.

    More significant is the fact that the entire allowance structure is undergoing a fundamental review as a result of the DER.

    Service Family.An encouraging feature of recent changes has been the tendency to base initiatives on thorough reviews of problems, usually carried out by contractors. Another positive feature has been the integration of the family liaison structure into the Defence Community Organisation.

    Members Without Family.The big change here is the trend towards the alignment of policy for single members and married members, especially in accommodation eligibility. This has resulted from a series of inquiries, both internal and external.

    Housing.The DHA has virtually completed its upgrade of family housing, and this achievement far outweighs the criticisms made of its operations from time to time. The current trend in DHA activity is toward leasing rather than ownership of stock. Following a substantial review of the housing and accommodation system, a policy decision is anticipated on fundamental principles of housing assistance and the resolution of some problems and anomalies. In home ownership, the significant increase in the maximum subsidised loan available under ADFHLAS has heightened criticism of the maximum loan available under the Defence Service Homes Scheme.

    Other Conditions.Probably the main change recorded in this generally descriptive chapter is the creation of an integrated joint health organisation, the Defence Health Service, to control Defence health activities.

    Compensation and Repatriation.The Military Compensation Scheme, created in 1994, while an improvement on the previous system, was widely felt to have not gone far enough, and a new 'self-contained' scheme is being currently developed.

    Law.The Defence Force Discipline Act seems to have performed reasonably well, and hopefully will be improved as a result of the Justice Abadee report currently being considered by the Chief of the Defence Force.

    Women.Servicewomen have continued to make gains, both in positions available and in occupancy of senior positions. Hopefully achievement of their potential will be assisted by initiatives announced in 1994, although it is possible the Defence Reform Program will result in some reduction in positions available for women.

    Overseas conditions of service.Probably the main recent initiative in this area has been the new framework introduced in 1993 to formalise conditions of service arrangements for peacekeeping operations.

    Resettlement.The introduction of the MSBS in 1991 was necessary and has proved successful, requiring few substantial changes.

    -------------------

    The Future

    Looking to the future, one concern is that much of the improvement in pay and conditions in the last few years has come from savings derived from substantial reductions in military and Defence civilian numbers. As was pointed out in Chapter 2, a good proportion of the savings from the Force Structure Review, which saw a reduction of over 10 000 in ADF numbers, went towards pay and conditions. The whole thrust of the current Defence Reform Program (DRP) is towards improving combat and technical support capability, and it can be assumed that a much smaller proportion of savings from the DRP will go to meet personnel needs.

    From around the year 2007 costly replacement of capital equipment will become necessary, and it is acknowledged that real increases in the Defence budget, which has seen real decline in recent years, will eventually be required to meet these needs. In the foreseeable future it seems certain that a greater proportion of the budget will go towards equipment, and a decreased proportion towards personnel needs. The heavy cuts in personnel numbers over the last fifteen years have resulted in a comparatively smaller, more highly skilled force. But retention of experienced personnel and recruitment of suitably educated young people will require continuing improvements in remuneration and service conditions. With the focus on combat capability and readiness limiting resources for personnel needs, some problems can be anticipated. Increased use of retention bonuses and more flexible and focused use of allowances may be necessary to avoid separation crises in some skilled areas. And it can be assumed that only the more economic initiatives in service conditions will be adopted. In these circumstances there may be pressures to restrict the independence of the mechanism which determines ADF remuneration, the Remuneration Tribunal, as a means of tightening controls on the distribution of Defence resources. As well as posing unwanted political consequences by refocusing Service pay and conditions onto the government-of-the-day, such a move could significantly affect Service morale.

    Bibliography

    The ADF spouse employment project report 1995. Australian Defence Families Information and Liaison Staff. [ADFILS]

    Anderson, David
    Conditions of service in the regular Defence Force. Parliamentary Research Service, Background Paper, November 1990.

    Australian Defence Force housing assistance: Department of Defence. (Audit Report No.13, 1994-95), Australian National Audit Office. Canberra, AGPS, 1994.

    ADF members without family conditions of service review team. Report, March 1992.

    ADF members without family conditions of service review team. Supplementary Report, August 1992.

    Australian Defence Force living-in accommodation: Department of Defence. (Audit Report No.25, 1994-95), Australian National Audit Office. Canberra, AGPS, 1995.

    Barry, Michael
    Australian Government processes: An analysis of the decision to establish the Defence Force Remuneration Tribunal. Australian Defence Force Academy, 1997.

    Barry, M.J.
    The application of productivity based wage fixing principles to the ADF. Australian Defence Force Journal , No.114, September-October 1995, pp. 21-41.

    Barry, M.J.
    A study of the application of productivity based wage fixation to the Australian Defence Force. [Thesis submitted as part of the requirement for the award of Bachelor of Business (Honours) (Industrial Relations) at the Queensland University of Technology], 1994.

    Burton, Clare
    Women in the Australian Defence Force. Two studies [The Burton Report]:

    (1) The cultural, social and institutional barriers impeding the merit-based progression of women.

    (2) The reasons why more women are not making the Australian Defence Force a long-term career. Canberra, Director Publishing and Visual Communications, Defence Centre, December 1996.

    CREW [Combat Related Employment of Women] Report 1995. Canberra, Australian Army, 1995.

    Defence Force Remuneration Tribunal. Service allowance decision: matter No. 15 of 1993. Canberra, 1994.

    Government response to Facing the future together: report on sexual harassment in the Australian Defence Force. Senate Standing Committee on Foreign Affairs Defence and Trade. December 1994.

    Implementation plan. DFPPC endorsed revised MWOF [Members Without Family] accommodation and relocation assistance policies. November 1992.

    Inquiry into military compensation arrangements for the Australian Defence Force. Canberra, Defence Publishing and Visual Communications, 1997.

    Jans, N.A. and Frazer-Jans, Judy
    Facing up to the future: proposals for career/personnel initiatives to assist in staffing the ADF in the 1990's and beyond. Canberra, 1989.

    McGuire, D.J.
    Collective bargaining principles in the ADF. Australian Defence Force Journal,

    No. 114, September-October 1995, pp.43-47.

    Military Superannuation and Benefits Scheme and Defence Force Retirement and Death Benefits Scheme (MSBS) and DFRDB). A report on long-term costs carried out by the Australian Government Actuary. Canberra, 1997.

    Personnel wastage in the Australian Defence Force-report and recommendations. Joint Committee on Foreign Affairs, Defence and Trade. Canberra, AGPS, 1988.

    Quinn, Major Kathryn
    Sexual harassment in the Australian Defence Force: a comparative assessment of results from the 1987 ADF career and family study and the 1995 ADF career and family study. Canberra, Australian Army Psychology Corps, December 1996.

    Report of the caucus joint working group on homosexual policy in the Australian Defence Force. September, 1992.

    Report on the review of ADF personnel and family support services.[The Pratt Report] Canberra, Directorate of Publishing, Defence Centre, 1994.

    Report on the review of education assistance for ADF children in Australia. November 1995.

    Report on options and strategies to improve support for ADF spouses in obtaining employment. Canberra, HQADF, February 1994.

    Report on the review of the Defence Child Care Program. Defence Community Organisation, July 1996.

    Report to the Senate on the elimination of sexual harassment in the Australian Defence Force. December 1995.

    Senate inquiry into sexual harassment in the Australian Defence Force: submission by Headquarters Australian Defence Force. 15 November 1993.

    Senate inquiry into sexual harassment in the Australian Defence Force. Supplementary Submission by Headquarters Australian Defence Force. 4 February 1994.

    Serving Australia: the Australian Defence Force in the twenty first century [the Glenn Report]. Canberra, Directorate of Publishing, Defence Centre, 1995.

    Sexual harassment in the Australian Defence Force: facing the future together. Senate Standing Committee on Foreign Affairs, Defence and Trade. August 1994.

    Women in the military: towards effective integration . Conference documentation. Canberra, Australian Defence Studies Centre, 14 April 1997.

    Appendix A: Equivalent Ranks

    Navy

    Army

    Air Force

    Commissioned Officers

    Admiral

    General

    Air Chief Marshal

    Vice Admiral

    Lieutenant General

    Air Marshal

    Rear Admiral

    Major General

    Air Vice Marshal

    Commodore

    Brigadier

    Air Commodore

    Captain

    Colonel

    Group Captain

    Commander

    Lieutenant Colonel

    Wing Commander

    Lieutenant Commander

    Major

    Squadron Leader

    Lieutenant

    Captain

    Flight Lieutenant

    Sub Lieutenant

    Lieutenant

    Flying Officer

     

    2nd Lieutenant

    Pilot Officer

    Warrant and Non-Commissioned Officers

    Warrant Officer

    Warrant Officer Cl 1

    Warrant Officer

    Chief Petty Officer

    Warrant Officer Cl 2

    Flight Sergeant

     

    Staff Sergeant

    Flight Sergeant

    Petty Officer

    Sergeant

    Sergeant

    Leading Seaman

    Corporal or Bombardier

    Corporal

     

    Lance Corporal or Lance Bombardier

    Leading Aircraftman

    Appendix B: History of Service Allowance

    Date of Increase

       

    February 1973

    $ 750

    Implementation by COI.

    March 1974

    $ 950

    D(CS)C Review-Reason for increase not explicit.

    April 1979

    $1280

    Increase by COR 'Allowances that Complement Salary'.

    July 1979

    $1321

    NWC 3.2 per cent .

    January 1980

    $1380

    NWC 4.5 per cent .

    July 1980

    $1438

    NWC 4.2 per cent .

    July 1980

    $1538

    Increase by COR 'Second Report

    -Work Value Change'.

    January 1981

    $1595

    NWC 3.7 per cent .

    May 1981

    $1652

    NWC 3.6 per cent .

    November 1981

    $2500

    Increase by COR 'Third Report'.

    October 1983

    $2608

    NWC 4.3 per cent .

    April 1984

    $2715

    NWC 4.1 per cent .

    April 1985

    $2768

    NWC 2.6 per cent .

    May 1985

    $2950

    ADF Anomaly Case 5.9 per cent .

    November 1985

    $3062

    NWC 3.8 per cent .

    July 1986

    $3132

    NWC 2.3 per cent .

    23 July 1987

    $3848

    Review by DFRT ($716-22.9 per cent ).

    21 January 1988

    $4002

    DFRT-4 per cent Second Tier Wage Increase.

    13 October 1988

    $4122

    DFRT-3 per cent following August 1988 NWC.

    23 November 1989

    $4246

    DFRT-3 per cent following NWC.

    7 June 1990

    $4373

    DFRT-3 per cent following NWC.

    1 August 1991

    $4482

    DFRT-2.5 per cent following NWC

    17 December 1992

    $4572

    ADF Productivity Package-2 per cent first increase

    11 March 1993

    $4636

    ADF Productivity Package-1.4 per cent second increase

    30 December 1993

    $4729

    2 per cent Third Tier Wage Increase

    10 March 1994

    $4800

    ADF Productivity Package-1.5 per cent third increase

    20 July 1994

    $5600

    DFRT Review ($800 increase-16.7 per cent)

    15 December 1994

    $5712

    2 per cent Third Tier Wage Increase

    13 July 1995

    $5826

    Workplace Bargaining Arrangement 1995-96

    -2 per cent first increase

    7 March 1996

    $5919

    Workplace Bargaining Arrangement 1995-6

    -1.6 per cent second increase

    17 October 1996

    $6037

    Workplace Bargaining Arrangement 1995-96

    -2 per cent third increase

    COI = Committee of Inquiry. COR = Committee of Reference. NWC = National Wage Case

    Appendix C: Ministers for Defence since 1945

    Minister for Defence

    Beasley, John Albert (ALP)

    13.7.4514.8.46

     

    Forde, Francis Michael, PC (ALP)

    15.8.461.11.46

     

    Dedman, John Johnstone (ALP)

    1.11.4619.12.49

     

    Harrison, Eric John (LIB)

    19.12.4924.10.50

     

    *McBride, Philip Albert Martin (later Sir Philip, KCMG) (LIB)

    24.10.5010.12.58

     

    Townley, Athol Gordon (LIB)

    10.12.5818.12.63

     

    Hasluck, Paul Meernaa Caedwalla (LIB)

    18.12.6324.4.64

     

    *Paltridge, Shane Dunne (later Sir

    24.4.6419.1.66

     

    Shane, KBE)(LIB)

     
     

    Fairhall, Allen (LIB)

    26.1.6612.11.69

     

    Fraser, John Malcolm (LIB)

    12.11.698.3.71

     

    Gorton, John Grey, PC, CH (LIB)

    10.3.7113.8.71

     

    Fairbairn, David Eric, DFC (LIB)

    13.8.715.12.72

     

    Barnard, Lance Herbert (ALP)

    5.12.726.6.75

     

    Morrison, William Lawrence (ALP)

    6.6.7511.11.75

     

    Killen, Denis James (LIB)

    12.11.757.5.82

     

    Sinclair, Ian McCahon, PC (NCP)

    7.5.8211.3.83

     

    Scholes, Gordon Glen Denton (ALP)

    11.3.8313.12.84

     

    Beazley, Kim Christian (ALP)

    13.12.844.4.90

     

    *Ray, Robert Francis (ALP)

    4.4.9011.3.96

     

    McLachlan, Ian Murray, AO (LIB)

    from 11.3.96

     

    Other defence-related portfolios

    Minister for Air

    Drakeford, Arthur Samuel (ALP)

    13.7.4519.12.49

     

    White, Thomas Walter, DFC, VD (LIB)

    19.12.4911.5.51

     

    *McBride, Philip Albert Martin (LIB)

    11.5.5117.7.51

     

    McMahon, William (LIB)

    17.7.519.7.54

     

    Townley, Athol Gordon (LIB)

    9.7.5424.10.56

     

    Osborne, Frederick Meares, DSC (LIB)

    24.10.5629.12.60

     

    *Wade, Harrie Walter (CP)

    29.12.6022.12.61

     

    Bury, Leslie Harry Ernest (LIB)

    22.12.6127.7.62

     

    Fairbairn, David Eric, DFC (LIB)

    4.8.6210.6.64

     

    Howson, Peter (LIB)

    10.6.6428.2.68

     

    Freeth, Gordon (LIB)

    28.2.6813.2.69

     

    Erwin, George Dudley (LIB)

    13.2.6912.11.69

     

    *Drake-Brockman, Thomas Charles,

    12.11.695.12.72

     

    DFC (CP)

     
     

    Barnard, Lance Herbert (ALP)

    5.12.7230.11.73

     

    Minister for the Army

    Forde, Francis Michael, PC (ALP)

    13.7.451.11.46

    Chambers, Cyril (ALP)

    1.11.4619.12.49

    Francis, Josiah (LIB)

    19.12.497.11.55

    Harrison, Sir Eric John, PC, KCVO

    7.11.5528.2.56

    (LIB)

    Cramer, John Oscar (LIB)

    28.2.5618.12.63

    Forbes, Alexander James, MC (LIB)

    18.12.6326.1.66

    Fraser, John Malcolm (LIB)

    26.1.6628.2.68

    Lynch, Phillip Reginald (LIB)

    28.2.6812.11.69

    Peacock, Andrew Sharp (LIB)

    12.11.692.2.72

    Katter, Robert Cummin (CP)

    2.2.725.12.72

    Barnard, Lance Herbert (ALP)

    5.12.7230.11.73

     

    Minister for the Navy

    Makin, Norman John Oswald (ALP)

    13.7.4515.8.46

     

    Drakeford, Arthur Samuel (ALP)

    15.8.461.11.46

     

    Riordan, William James Frederick (ALP)

    1.11.4619.12.49

     

    Francis, Josiah (LIB)

    19.12.4911.5.51

     

    *McBride, Philip Albert Martin (LIB)

    11.5.5117.7.51

     

    McMahon, William (LIB)

    17.7.519.7.54

     

    Francis, Josiah (LIB)

    9.7.547.11.55

     

    Harrison, Sir Eric John, PC, KCVO (LIB)

    7.11.5511.1.56

     

    *O'Sullivan, Neil (LIB)

    11.1.5624.10.56

     

    Davidson, Charles William, OBE (CP)

    24.10.5610.12.58

     

    *Gorton, John Grey (LIB)

    10.12.5818.12.63

     

    Forbes, Alexander James, MC (LIB)

    18.12.634.3.64

     

    Chaney, Frederick Charles, AFC (LIB)

    4.3.6414.12.66

     

    Chipp, Donald Leslie (LIB)

    14.12.6628.2.68

     

    Kelly, Charles Robert (LIB)

    28.2.6812.11.69

     

    Killen, Denis James (LIB)

    12.11.6922.3.71

     

    Mackay, Malcolm George (LIB)

    22.3.715.12.72

     

    Barnard, Lance Herbert (ALP)

    5.12.7230.11.73

     

    Note: On 30.11.1973 the Departments of the Navy, Army and Air were abolished and their functions merged with those of the Department of Defence.

     

    Minister for Defence Production

    Harrison, Eric John (later Sir Eric, PC, KCVO) (LIB)

    11.5.5124.10.56

     

    Beale, Oliver Howard, QC (LIB)

    24.10.5610.2.58

     

    Townley, Athol Gordon (LIB)

    11.2.5823.4.58

     

    Minister Assisting the

    McLeay, John Elden (LIB)

    22.12.753.11.80

    Minister for Defence

    Newman, Kevin Eugene (LIB)

    3.11.807.5.82

     

    Minister for Defence Support

    Viner, Robert Ian (LIB)

    7.5.8211.3.83

     

    Howe, Brian Leslie (ALP)

    11.3.8313.12.84

     

    Minister Assisting the

    Beazley, Kim Christian (ALP)

    11.3.8313.12.84

    Minister for Defence

    Brown, John Joseph (ALP)

    13.12.8424.7.87

     

    Duffy, Michael John (ALP)

    13.12.8424.7.87

     

    Parliamentary Secretary for

    Kelly, Roslyn Joan (ALP)

    24.7.8718.9.87

    Defence Science and Personnel

     

    Minister for Defence Science

    Kelly, Roslyn Joan (ALP)

    18.9.876.4.89

    and Personnel

    Simmons, David William (ALP)

    6.4.894.4.90

     

    Bilney, Gordon Neil (ALP)

    4.4.9024.3.93

     

    *Faulkner, John Philip (ALP)

    24.3.9325.3.94

     

    Punch, Gary Francis (ALP)

    25.3.9411.3.96

     

    Parliamentary Secretary to

    Price, Leo Roger Spurway (ALP)

    27.12.9124.3.93

    the Minister for Defence

    Punch, Gary Francis (ALP)

    24.3.9325.3.94

     

    Bevis, Archibald Ronald (ALP)

    25.3.9411.3.96

     

    Minister for Defence Industry, Science and Personnel

    Bishop, Bronwyn Kathleen (LIB)

    from 11.3.96

    * Senator.

    Appendix D: Glenn Report-Summary of Recommendations

    (The following list is an extract from: Serving Australia: The Australian Defence Force in the Twenty First Century. Canberra, Defence Centre, 1995: 285-295)

    This Chapter draws together and correlates the recommendations from the previous chapters for ease of reference.

    Chapter 1 The External Environment

    • We recommend that the impact of future trends in the social, economic, organisational and industrial environments be noted and that these trends continue to be monitored.

    Chapter 2 Vision for ADF Personnel 2005

    • We recommend that the Defence Vision for ADF personnel be noted and that increased prominence be accorded Service values.

    Chapter 3 Principles of Personnel Policy Strategy

    • We recommend that the set of ten principles contained in this Chapter be adopted as the basis for ADF personnel policy strategy.

    Chapter 4 Employment and Work Practices

    Phased Careers

    • the ADF recruit to a constant base and manage separations;
    • the ADF introduce a system of Phased Careers based on Fixed Terms of Employment, with the number and lengths of phases varying for occupational groups;
    • a Completion Incentive be paid at the end of each career phase, with the quantum varying for occupational groups;
    • a Resettlement Assistance be provided for members leaving the ADF at the end of a career phase;
    • Completion Incentives and Resettlement Assistance replace a range of gratuities and bounties that currently exist;
    • Retention Bonuses be provided at the discretion of the Chiefs of Staff for the retention of a group of members critical to the operational effectiveness of the ADF;
    • Limited Tenure Promotion be extended to all rank levels;
    • Management Initiated Early Retirement be extended to all rank levels;
    • the Return of Service Obligation be confined to those cases where members have been given significant training which makes them highly marketable;

    Staffing

    • a more flexible approach to the staffing of ADF positions be adopted by the use of relief pools, secondments, exchanges, second career streams and labour exchanges;
    • the ADF encourage more lateral recruitment and the re-employment of former members without detriment;
    • communication be maintained with members not in continuous contact with the ADF, including advice on training and career development opportunities;
    • physical fitness standards should be aligned to occupational requirements and meet OH&S responsibilities;

    Flexible Work Practices

    • a range of Flexible Work Practices be developed for the Regular and Reserve components of the ADF to apply as local circumstances dictate;
    • concomitant conditions of service packages be developed for Flexible Work Practices;
    • establishment practices be reviewed to facilitate Flexible Work Practices;

    Social Justice

    • all ADF employment be discrimination free and be based on the requirements of the job and the capability of the member to do the task;
    • job design and specifications and career management systems be reviewed to ensure that any unintentional discrimination against women is eradicated;
    • strategies be developed to encourage people from non English speaking backgrounds to join the ADF;
    • strategies be developed to encourage Aboriginal and Torres Strait Islander people to join the ADF; and
    • at the expiration of the current exemption under the Sex Discrimination Act, no further exemption be sought.

    Chapter 5 Reward, Recognition and Entitlements

    An Independent Approach

    the ADF not be bound to any other group for adjustments of pay and conditions, and that the circumstances dictate the approach to be followed;

    Rank

    • the existing rank structure be maintained but that rank be used selectively in organisations;

    The Pay System

    • the 'all of one company' approach in the context of pay be abandoned;
    • a new pay system be introduced based on work value and be applied to both other rank and officer rank members;
    • a Market Forces Pay Element, additional to work value, be introduced for occupations where due to high demand in the employment market it is difficult to attract and retain members;
    • if in the new pay system a member moves from a higher paid job to a lower paid job, the pay of the member should be frozen until the remuneration of the position occupied increases above the frozen rate.
    • competency based increments be applied to all salaries under the new pay system;
    • members who have plateaued in rank but who are performing at a demonstrably superior level be paid one or more performance increments;
    • salary compression be dealt with in the work value examination;
    • performance based pay only apply at the senior management levels and be similar to that applying in the Senior Executive Service of the APS;

    Allowances

    • a Mobility Allowance, comprising three elements (an incentive to move, posting turbulence and disturbance) be introduced and paid on the occurrence of each move, with the quantum varying with members' circumstances:
    • Service Allowance cover those elements that apply to all members and be incorporated into salary;
    • the proposed work value based review of ADF pay consider whether any allowances or elements thereof can be incorporated into salary;
    • the work value elements of Flying Allowance and Submarine Service Allowance be incorporated into work value based pay, and the attraction and retention element of Flying Allowance be dealt with under the Market Forces Pay Element;

    Accommodation and Relocation

    • the distinction between the entitlements of single and married members be removed and a decision on the Members Without Family Review be finalised as soon as possible;
    • alternatives for the provision of accommodation assistance and subsidies be pursued;
    • the provision of living-in accommodation be reassessed and the management of such accommodation be transferred to a commercial agency;
    • the relocation of a unit, formation or facility take account of the demography of the organisation involved and any trends likely to impact upon the people;
    • the purchasing power and beneficial impact upon the community of a defence presence should be marketed more effectively, particularly in negotiations with state and regional authorities for the provision of infrastructure;
    • the management of removals and housing allocations be placed on a commercial basis;

    Non Financial Recognition

    • a team and unit citation be introduced to recognise outstanding contribution or achievement in non operational activities;
    • a comprehensive approach be developed for the ways in which non financial recognition can be granted; and

    Presentation

    • whatever conditions of service prevail they be presented as a comprehensive package.

    Chapter 6 Support for Members and Families

    • the ADF develop a strategic policy on family support which determines what families need, what should be provided, what should be the division of responsibility between the member and the ADF, and how the service should be provided;
    • the provision of family support be based on helping members to help themselves, particularly through the development of self help programs;
    • family support mechanisms be designed to cope with the transition from today's environment to levels of conflict;
    • an ADF spouse employment assistance policy be developed to encompass employment assistance service, job search assistance, training and education assistance and access to unemployment benefits;
    • a comprehensive ADF child care policy be developed;
    • the Education Assistance Review consider a communication strategy to influence education decision makers, and also examine the adequacy of education allowance and assistance with accommodation and reunion costs when a child cannot transfer to the new locality;
    • a range of measures be adopted to accommodate the requirements of families with special needs; and
    • strategies be developed to ensure that volunteer organisations remain viable and continue to complement formal ADF support structures.

    Chapter 7 The Reserves

    • the military workforce be considered a single entity with part time (Reserve) and full time (Regular) components and employment arrangements for each be aligned;
    • the ADF adopt arrangements allowing members to move freely and without detriment between the part time and full time components;
    • the entitlements and benefits of the Reserves be related to the work value of their jobs, their contribution and the demands of military employment and be based on the entitlements and benefits of full time members;
    • the ADF adopt a new remuneration model for the Reserves packaged to include salary, allowances, commitment bonus, accrual benefits, support provisions and taxation:
    • current Reserve members have the option of retaining the existing conditions of service package or transferring to the new remuneration package;
    • the new remuneration package be underpinned by a system of employment practices affording members choice and allowing the ADF to manage its people effectively;
    • the development of family support policies include policies for the families of Reserve members;
    • training for Reserve members target the tasks to be performed and differentiate between skill based and knowledge training;
    • a stronger partnership with employers be built through the Defence Reserve Support Committee;
    • a comprehensive and useable data base be created including data on what motivates Reserve members, their attitudes toward a part time military career and a profile of their particular circumstances; and
    • career management for Reserve members recognise the demands made of them and become more active, flexible and standardised in its application.

    Chapter 8 A Learning Organisation

    • the ADF adopt strategic policies to ensure that it functions as a 'learning organisation';
    • training and education issues be included in the broader aspects of strategic corporate planning and policy making and be reflected in the Strategic Personnel Plan;
    • the Training Commanders' Forum become an instrument for strategic planning and policy development and be chaired by ACPERS when strategic issues are considered;
    • the Training Commands adopt best practice and develop a partnership approach to more effectively analyse, develop, conduct and evaluate training;
    • the competencies and skills required for each ADF occupation and the pre-requisites necessary for entry to training in those occupations be clearly specified;
    • the ADF provide enhanced professional programs aimed at developing management skills including personnel management skills;
    • an over-arching policy on skills accreditation be developed by HQADF and included in the Strategic Personnel Plan;
    • the ADF provide a more flexible range of training and education options taking account of the emergence of new competencies, different delivery methods and learning for personal growth;
    • the ADF continue to rationalise training;
    • the costs of training be measured more effectively; and
    • the Australian Defence Force Academy be used in a more flexible manner to meet ADF training and education needs.

    Chapter 9 Setting the Balance - A New Management Style

    • personnel policy development take account of the shift in balance needed between the corporate needs of the ADF and the needs of its people;
    • more discretion be pursued in the design of personnel policies;
    • training for personnel staff include the concepts of equity, discretion, choice and broad banding; and
    • a plain English rewriting exercise be applied to any personnel policy document being replaced or changed.

    Chapter 10 Strategic Links - The Personnel Process

    • a systemic relationship be established between the personnel, investment and operations functions in managing the ADF;
    • TYDP and FYDP procedures be enhanced by linking personnel planning requirements into all strategic and planning processes;
    • a planning and evaluation methodology be applied to personnel:
    • a Strategic Personnel Plan be developed for the ADF;
    • at all levels there be a partnership approach to the development of personnel policy;
    • the senior personnel committee be renamed the Defence Personnel Committee, with a strategic outlook and executive powers, and chaired by the VCDF;
    • there be cross membership between the personnel and capability committees;
    • the role of ACPERS be upgraded to accommodate strategic responsibilities;
    • the roles of the Service Assistant Chiefs of Staff for Personnel be augmented to take account of their strategic responsibilities:
    • a Strategic Personnel Planning Group be formed in HQADF to provide an analytical and strategic level personnel outlook;
    • a Personnel Policy Coordination Forum be formed to achieve more effective cooperation on personnel issues; and
    • the personnel components of HQADF and HR&M Division be examined to harmonise skills and talents, refine divisions of responsibility and strengthen linkages.

    Chapter 11 Industrial Relations in the ADF

    • a mechanism for consultation with members, separate from the chain of command, be developed;
    • the mechanism consist of forums at the local, regional and central levels where personnel issues would be resolved;
    • a Defence Member Representative be created, with a small secretariat to assist members in the forum process and to make formal representations on behalf of members;
    • the employer role for the ADF be vested in the CDF and the role of HQADF staff be adjusted accordingly;
    • powers under Section 58B of the Defence Act currently administered by DIR be transferred to the CDF;
    • commanders have an understanding of the ADF industrial relations system; and
    • channels for complaint be adjusted to provide that policy change proposals be dealt with in the proposed consultation process.

    Chapter 12 Supporting Personnel Management

    • personnel management become recognised as a specialist area of employment and career streaming for personnel specialists be adopted;
    • personnel experience be a prerequisite for advancement to the highest echelons of the ADF;
    • interoperable personnel information systems be established for the aggregate management of the ADF, with the characteristics of consistent terminology, transparency, analytical and modelling capability, and accessibility;
    • the ADF continuously monitor the external and internal environments which impact on personnel;
    • the ADF enhance and sustain its personnel research and analysis capability;
    • ADF managers take into account numbers, activity and price when considering personnel costs; and
    • the ADF establish a simple and flexible legal infrastructure to support the personnel process.

    Chapter 13 Change and Communication

    • the ADF develop and instil a new culture of personnel management through the introduction of a change management philosophy, in consultation with key stakeholders;
    • the change management philosophy include a combination of developmental and task focused strategies;
    • a communication plan support the implementation and ongoing management of the ADF Personnel Policy Strategy;
    • personnel policies be promulgated in a comprehensive, accessible and easily understood form which is conducive to prompt amendment;
    • the rationale for management decisions be fully articulated to middle management levels - the change leaders;
    • a comprehensive external communication strategy be developed toward building the image of the ADF in the Australian community; and
    • the outcomes of this Review including the key recommendations, implementation plan and timetable be communicated to the members of the ADF as soon as possible.

    Chapter 14 Major Challenges

    • geographic stability for members and their families be achieved through the collocation of support infrastructure and operational elements and the tri-Service clustering of mutually supporting units, formations and facilities;
    • the needs of people be considered when decisions are being taken about the relocation or establishment of units, formations and facilities;
    • respite for members be achieved by adjusting manpower requirements and the level of activities and operational commitments including preparedness requirements;
    • the ADF review the way in which force elements are configured, operate and deploy;
    • job requirements be clearly specified and that members be promoted on merit; and
    • resource implications arising out of this Review be handled through normal budgetary processes with detailed work being undertaken to develop financial models of training costs and phased careers.

    Appendix E: Burton Report-Recommendations

    (The following list is an extract from: Burton, Clare. Women in the Australian Defence Force. Two Studies. Canberra, Defence Centre, December 1996: 201-205)

    Recommendation 1

    That the ADF:

    1. create an Employment Equity (or Equal Employment Opportunity) Unit to develop an ADF-wide strategic, long-term planning process for the effective elimination of all forms of discrimination and harassment;
    2. develop general employment equity principles, standards and guidelines to apply across the Services; sufficiently developed to ensure compliance with anti-discrimination law and government EEO policy within each of the Services; and designed to highlight the ADF's aim of, on the one hand, developing gender-neutral employment standards, and, on the other, the elimination of unintentional, indirect and systemic forms of discrimination in Human Resource Management and related policies, procedures and practices;
    3. develop a clear framework document defining and explaining equity and equality, direct and indirect discrimination, what is meant by equitable treatment as distinct from preferential treatment and what affirmative action is and is not, with relevant illustrative material;
    4. undertake a review of all current Service EEO statements, policies and program documents to ensure consistency with the ADF position and the framework document;
    5. explore, through universities, the TAFE system and other training providers the availability of appropriate education and training programs for longer-term development and dissemination of theoretical and practical knowledge on anti-discrimination law and employment equity policies and issues;
    6. appoint civilian staff with expertise in the field to work closely with HQADF and personnel in each of the Services to initiate and coordinate the above activities; to provide rapid and effective skills transfer to personnel, selected on merit, at HQADF and from each of the Services to advise on and guide employment equity planning;
    7. appoint civilian staff with expertise in the field to prepare the ADF for the broader employment equity focus on people of non-English speaking background, Aboriginal people and Torres Strait Islanders and people with disabilities while maintaining the momentum for achieving gender integration.

    Recommendation 2

    That the ADF use this Report as a basis for a strategic planning process aimed at eliminating discriminatory policies and practices and at achieving gender integration.

    Recommendation 3

    That institutionalised commitment be achieved through meaningful expressions of ownership of the gender-integration agenda; that the ADF counter the prevailing view that gender integration is the result of political pressure, by widely and publicly acknowledging community and female members' expectations of it as an employment provider, by disseminating the facts of women's involvement and performance capacities in military roles, and by pointing to demographic patterns and technological imperatives which require the ADF to broaden its recruitment base to fulfil its role effectively and efficiently.

    Recommendation 4

    1. That all Commissioned and Senior Noncommissioned Officers, with the priority on the most senior Officers within the Defence Force, receive comprehensive and intensive briefings and training on their leadership responsibilities, with particular emphasis on the critical nature of their active commitment and support for the cultural changes required to achieve effective gender integration;
    2. that the briefings and training comprehensively cover their role in the non-discriminatory implementation of policies and in the elimination of discriminatory procedures and practices; the legal and organisational frameworks within which these responsibilities are to be exercised; the importance of their assuming role model and mentor status.

    Recommendation 5

    1. That HQADF and each Service specify the nature of Employment Equity related positions, their main roles and key accountabilities;
    2. that selection criteria be developed for such positions with people selected and appointed in accordance with the merit principle as defined in chapter 1 of this report;
    3. that, until knowledge and understanding is more broadly distributed, no Employment Equity position or related position be filled for developmental purposes unless this be part of a training program where support and skills-transfer is adequately resourced and supervised.

    Recommendation 6

    That Employment Equity strategic planning and consultation be an integral component of the roles, functions, teams and committees set up to implement the recommendations of the Report Serving Australia and be an integral component of the deliberations of the Defence Personnel Committee, the Strategic Personnel Planning Group and the Personnel Policy Coordination Forum , should they or similar bodies be set up in line with the recommendations of the Report, Serving Australia.

    Recommendation 7

    That the performance reporting system be used as a vehicle through which commitment to organisational values and policies is built and as a means of signalling that progress in Equal Employment Opportunity is essential for achieving mission goals.

    Recommendation 8

    1. That Chiefs of Staff be held accountable to the Chief of the Defence Force for ensuring Commanding Officers are making a difference to the climate and opportunities for women;
    2. that leaders and Commanding Officers be held formally accountable for gender-integration progress through regular six monthly reports of achievements via the hierarchy to the Defence Personnel Committee;
    3. that senior Officers, managers and supervisors be assessed through the performance reporting system on their contributions to eliminating discriminatory practices and on the positive role they play in the gender-integration process.

    Recommendation 9

    1. That Commanding Officers, having been adequately briefed, trained, provided with advisory and other support, and having had expectations of them clearly established, be held accountable for the elimination of discrimination and harassment in their units;
    2. that ultimately, after phased-in management and supervisory education and training programs, Commanding Officers be held responsible for the following supervisory, management and training practices of their staff: (a) inappropriate differential treatment of men and women; (b) the conveying of directives negatively; © poor and inconsistent management of work/family issues; (d) lack of compliance with unacceptable behaviour guidelines; and (e) the incidence of sexual and gender harassment complaints;
    3. that the ADF and each Service clarify for all members its expectations of supervisors' and managers' styles and methods of supervising and disciplining and provide guidance on the variations in them deemed appropriate for different settings.

    Recommendation 10

    That gender-integration principles and expected achievements be built into the strategies and goals of Defence Management Programs.

    Recommendation 11

    That comprehensive, multifaceted intervention plans be developed for units and categories of members where positive attitudes towards women in the military have been identified as particularly difficult to achieve.

    Recommendation 12

    1. That a plan for consultation and communication with members on gender-integration issues be developed;
    2. that it include single sex and mixed-sex focus group and workplace-based discussion on personnel-related matters in order that levels of comprehension of current policies, and effectiveness of education and training initiatives, can be assessed; and in order that areas in need of future action can be identified in 'off the record' contexts.

    Recommendation 13

    1. That the ADF, in consultation with each of the Services, develop a set of guidelines and initiate focused action to ensure compliance with the indirect discrimination provisions of the Sex Discrimination Act;
    2. that this Report's identification of existing indirectly discriminatory policies and practices (in chapter 5)-in particular those governing the career management system-form the basis for establishing the required redress and other measures to overcome potential future effects of past discriminatory policies and practices.

    Recommendation 14

    1. That the ADF, with the assistance of expert advice, embark upon a systematic review of, and develop a policy framework for, the design and implementation of selection testing procedures and performance reporting and promotion systems, based on the principles of transparency, accountability, validity and reliability;
    2. that a continuous review process of criteria and standards and their validation be developed as a component part of the ADF's strategic approach to the management of human resources.

    Recommendation 15

    1. That the ADF and each of the Services, following intensive educative efforts and in consultation with women, determine the special initiatives to be developed to provide women with the necessary support to enhance their levels of comfort and feelings of belonging within the military setting;
    2. that regular unit climate surveys be conducted, with particular reference to sexual and gender harassment, as one means of assessing the effects of good practice and of identifying areas where strong interventions are required;
    3. that an audit of clothing and equipment be carried out in consultation with members to establish what remaining modifications need to occur; that, in the meantime, information on adaptations and alterations that can significantly enhance women's capacity and efficiency be widely disseminated.

    Recommendation 16

    that the ADF and each Service ensure that impediments to decision makers (including those advising on or making promotion decisions) having ready access to expert advice, valuable and relevant experience, and the diversity of perspective, including from women, required for sound decision making.

    Recommendation 17

    That the principles set out in chapter 6 of this Report, regarding work-family accommodations, form the basis for the development of a strategic approach to ensuring that appropriate facilities, terms and conditions and support are provided to members.

    Recommendation 18

    1. That a comprehensive database be maintained of personnel-related statistics;
    2. that a gender breakdown of all relevant data be readily available for educative, monitoring and reporting purposes;
    3. that the data be used to provide members, the public and the relevant Minister with the facts regarding women's and men's recruitment, occupational distribution, course participation patterns, posting patterns, promotion rates, career patterns, representation on decision making bodies, length of service, leave patterns and separation rates;
    4. that a behavioural and social science perspective be introduced to broaden the current research perspectives and capacities within the Services;
    5. that research results, in the form of data observations and findings, be used to clarify and modify approaches to gender integration and to overcome any problems associated with their implementation.

    Recommendation 19

    That the ADF, through internal and external monitoring activities, maintain a comprehensive database on policy development, models of good practice and effective change strategies as they relate to gender integration, to ensure that problems are widely canvassed, and solutions disseminated, to avoid constant 'reinventing of the wheel'.

    Recommendation 20

    1. That regular internal and external reviews of progress made in gender integration be carried out;
    2. that the Inspector-General's role include periodic reviews of the management of the gender-integration process;
    3. that the Terms of Reference, role, composition and resourcing of the Defence Advisory Forum on Discrimination be altered to allow for meaningful review activity in order to extend the accountability of the ADF to the public for the provision of equitable employment opportunities and as a positive public relations measure;
    4. that this Report and subsequent reports on gender-integration progress be made publicly available, including to military organisations in other countries in reciprocal fashion, as a significant symbol of commitment to cultural change and as a good faith measure.

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