Defence - Strategic Reform Program (SRP)


Budget Review 2010-11 Index

Budget 2010–11: Defence

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.


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