Strategic Reform Program (SRP)
Laura Rayner
The SRP is focused on doing business better in
order to generate savings. The SRP seeks to improve accountability
and planning, and to increase productivity across Defence.[1]
The implementation of the first stages of the
Strategic Reform Program (SRP) is considered to be so important
that the Defence Portfolio Budget Statements 2010–11
identify it as ‘the Government's key initiative in
2010–11’, placing it second only to the conduct of
current operations.[2] The Government has put a great deal of emphasis on the
need for the SRP to succeed. The Defence Minister, John Faulkner,
said in his Budget media release on the SRP that ‘to be
blunt, achieving Force 2030 in its full potential will not be
possible without achieving the SRP’. [3]
The Strategic Reform Program was initiated in
2009 in the Defence White Paper as part of the Government’s
financial plan for Defence to deliver ‘gross savings’
of $20 billion over the next decade.[4] The SRP brought together the work of
the:
- Independent Defence Budget Audit (Pappas Report), which was
conducted as part of the Defence White Paper process
- Companion Reviews
- Brady Review (into intelligence capability), and
- Mortimer Review (into Defence procurement and
sustainment).[5]
As part of the SRP process, Defence will
invest about $2.4 billion to enable the SRP reforms to be
implemented. Defence will be allowed to reinvest the resources
freed up by these planned cost reductions into Force 2030, the
force structure that the Government has determined that Australia
needs to defend itself and its interests over the next two
decades.[6] In fact
‘Defence’s budget to 2019 has already been adjusted to
take account of the $20.6 billion in reinvestment required for
Force 2030’.[7]
Defence estimates that it will have achieved
cost reductions of $797 million in 2009–10; and that the
SRP will deliver more than $1 billion in cost reductions in
2010–11 as part of the $6.4 billion in planned cost
reductions across the forward estimates.[8] References to the SRP appear throughout
the Defence Portfolio Budget Statements 2010–11, but
there is no consolidated section dealing with the detail of the
planned SRP savings. The Minister’s Budget media release
indicates that the ‘$1 billion in cost reductions in
2010–11 will come from a number of reforms streams, including
around $293 million from improved maintenance and inventory
management techniques and around $221 million from better
management of Defence non-equipment procurement’.[9] However, it is unclear if
this will be offset by the $384 million which Defence will
invest in reform initiatives in 2010–11 as part of the SRP,
or whether the $1 billion is a net figure.
The SRP consists of ‘over 300 separate
initiatives which are managed in 15 individual “reform
streams”’, with ‘over half of the initiatives not
having any cost reductions directly associated with
them’.[10]
The Government has promised that the SRP will be audited, with
savings measured. For instance, the SRP has an Integrated
Performance Management Model which will give Defence ‘a twice
yearly look at how the SRP is travelling’.[11] This model, together with more
regular local monitoring of the program, the Defence Audit and Risk
Committee, and the Defence Strategic Reform Advisory Board which
will report to the Minister quarterly, will all be used to
‘ensure that the SRP is achieving its aims’.[12]
In answers to various questions on notice on
23 February 2010, Defence Minister Faulkner said that
‘savings to the Defence budget have been attributed annually
and will be reported on this basis’.[13] Presumably public reporting of the
progress and success or otherwise of the Strategic Reform
Program’s initiatives will appear in the Defence Annual
Report, but it is unclear how detailed any public reporting
will be. Defence states that ‘[Strategic Reform] Program
success will free up resources - both people and dollars - to
redirect to other priorities’.[14] While the SRP has
‘cultural’ aspects’, the redirection of staffing
and financial resources are measurable outcomes which should be
transparent to and available for scrutiny by taxpayers. Given the
SRP’s wide-ranging scope and complexity, the challenges it
poses, and the emphasis that the Government has placed on the
SRP’s importance to long-term defence planning, detailed
information on the conduct, progress and outcome of the reforms
should be made available to the Parliament on a regular basis.
More information on the SRP can be found in
the two booklets released by Defence (The Strategic Reform
Program: delivering Force 2030, released in May 2009, and
The Strategic Reform Program: making it happen, released
in April 2010) and on Defence’s SRP homepage.[15]
[1].
Australian Government, Portfolio budget statements
2010–11: budget related paper no. 1.5A
2010–11& 1.5C: Defence Portfolio,
Commonwealth of Australia, Canberra, 2010, pp. 143, viewed 12 May
2010,
http://www.defence.gov.au/budget/10-11/pbs/2010-2011_Defence_PBS_full.pdf
[2]. Ibid., p. 13.
[3]. J Faulkner
(Minister for Defence), Budget 2010–11:
strategic reform program to deliver $1 billion of cost reductions
in 2010–11, media release, 11 May 2010, viewed
14 May 2010,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FYNOW6%22
[4]. J
Faulkner, ‘Shaping up for change ahead a serious task’,
Weekend Australian, 24 October 2009, p. 4, viewed 17 May
2010,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FHO0V6%22
[5].
Department of Defence, The Strategic Reform Program: delivering
Force 2030, Department of Defence, Canberra, 2009, p. 4,
viewed 14 May 2010, http://www.defence.gov.au/publications/reformBooklet.pdf
and http://dpl/Books/2009/DeliveringForce2030.pdf
[6].
Department of Defence, The Strategic Reform Program: making it
happen, Department of Defence, Canberra, 2010, pp. 1–2,
viewed 14 May 2010, http://www.defence.gov.au/srp/docs/srp.pdf
[7].
Ibid., p. 4.
[8]. J Faulkner (Minister for Defence),
Budget 2010–11: strategic reform program to
deliver $1 billion of cost reductions in
2010–11, op. cit.; and Portfolio budget
statements 2010–11: Defence Portfolio, op. cit., p.
13.
[9]. J Faulkner (Minister for Defence),
Budget 2010–11: strategic reform program to
deliver $1 billion of cost reductions in
2010–11, op. cit.
[10]. Department of
Defence, The Strategic Reform Program: making it happen,
op. cit., p. 3.
[11]. Ibid., p.
24.
[12]. Ibid., p. 25;
and J Faulkner, ‘Shaping up for change ahead a serious
task’, op. cit.
[13]. J Faulkner, ‘Answer to question on
notice’, [various, Questioner: D Johnston], Senate,
Debates, 23 February 2010, pp. 941–42.
[14]. Portfolio budget statements 2010–11: Defence
Portfolio, op. cit., p. 143.
[15]. Department of Defence, The Strategic
Reform Program: delivering Force 2030, op. cit.; Department of
Defence, The Strategic Reform Program: making it
happen, op. cit.