Defence personnel

Budget Review 2017–18 Index

Dr Nathan Church

Proposed efficiencies

As part of the Government’s budget measures, almost $70 million in savings is projected during 2017–18. These savings are based on the Department of Defence reducing its use of contractors, consultants and business travel. Across the four-year forward estimates, this spending reduction program is envisaged to save slightly over $300 million.[1]

This measure was partially foreshadowed by the Secretary of Defence’s reported comments in February 2017, in which he indicated his displeasure at the growth in the Department’s use of contractors and consultants.[2]

Although no specific details have been released regarding the composition of these savings, previously reported statements and related commentary provide some context. For example, in response to a question from the March 2017 Senate Estimates committee hearing, the Secretary noted the Department’s program to reduce its consultancy budget by ten per cent in 2017–18. However, based on a total of $36 million allocated for consultancy in the previous budget, this would only save approximately $3.6 million.[3]

The Australian Strategic Policy Institute’s (ASPI) 2016–17 Cost of Defence publication also provided some analysis on contractors. ASPI assessed that although the reported levels of contractors employed by Defence have substantially reduced since the early 2000s, this does not include the unspecified ‘capability partners’ Defence has increasingly employed to fulfil similar roles to contractors.[4]

Since the publication of this ASPI report, Defence has changed its definition of ‘contractors’ to align with the Department of Finance’s terminology. This simple change has created a significant rise in Defence’s reported contractor workforce from approximately 800 in March 2017 to 2,087 as at May 2017.[5] This points to greater potential to reduce the number of contractors but it is unclear what the potential savings would be, or even if Defence will prioritise this, given the assertion made in the First Principles Review that ‘a proportion of Australian Defence Force personnel are carrying out tasks that could be more cost effectively assigned to a public servant or contractor’.[6]

Accordingly, it is likely that Defence anticipates that a large proportion of the proposed savings will come from reductions in business travel. Media reporting from early May 2017 revealed that Defence spent $155 million in air travel during 2015–16, significantly more than any other government department.[7] However, further reductions in air travel costs are likely to be ambitious given Defence has already cut its travel budget from a reported $478 million in 2010–11 to $320 million in 2013–14.[8]

Personnel statistics

With the number of Australian Defence Force (ADF) personnel steadily increasing, the rate of projected growth will probably see the 62,400 personnel target (as stated in the 2016 Defence White Paper) reached in 2025—a year earlier than anticipated.[9] However, this growth will be uneven across the three services, with the Army outpacing both the Navy and Air Force.

Having reduced every year since 2011–12, the number of Australian Public Service (APS) employees is expected to reach its low-point for staffing levels in 2016–17, dropping to 17,350 personnel. This would represent a 20 per cent reduction over the previous five years, before an anticipated ‘stabilising’ at 18,200 personnel from 2018–19.

Table 1: Defence workforce data 2012–13 to 2020–21 (average workforce full-time equivalents (FTE))

  2012–13
(actual)
2013–14
(actual)
2014–15
(actual)
2015–16
(actual)
2016–17
(estimated
actual)
2017–18
(budget
estimate)
2018–19
(forward
estimate)
2019–20
(forward
estimate)
2020–21
(forward
estimate)
Navy 13 760 13 862 14 070 14 232 14 219 14 123 14 683 14 718 14 763
Army 28 928 28 568 29 366 29 635 30 352 30 672 30 874 30 936 31 115
Air Force 13 919 13 934 14 076 14 194 14 305 14 399 14 237 14 436 14 707
Total ADF 56 607 56 364 57 512 58 061 58 876 59 194 59 794 60 090 60 585
Change from
prev. year
  –243 1 148 549 815 318 600 296 495
APS 21 534 20 496 19 342 18 071 17 350 17 970 18 200 18 200 18 200
Change from
prev. year
  –1 038 –1 154 –1 271 –721 620 230 0 0
Total
Defence
79 812 78 141 76 854 76 132 76 226 77 164 77 994 78 290 78 785
Change from
prev. year
  –1 281 –6 –722 94 938 830 296 495

Source: Parliamentary Library estimate based on data derived from Department of Defence, Annual reports; Australian Government, Portfolio budget statements 2017–18: budget related paper no. 1.4A Defence Portfolio, p. 26.

 


[1].          The budget figures in this brief have been taken from the following document unless otherwise sourced: Australian Government, Portfolio budget statements 2017–18: budget related paper 1.4A: Defence Portfolio, p. 20.

[2].          N Towell, ’Defence boss on attack’, The Canberra Times, 20 February 2017.

[3].          Senate Foreign Affairs, Defence and Trade (FADT) Legislation Committee, Official committee Hansard, 30 March 2017, p. 52.

[4].          Australian Strategic Policy Institute, The cost of Defence: ASPI Defence budget brief 2016–17, May 2016, pp. 73–4.

[5].          Official committee Hansard, 30 March 2017, p. 51.

[6].          Department of Defence (DoD), First principles review: creating one Defence, 1 April 2015, p. 58.

[7].          T McIlroy, ‘Defence tops government travel spend at $155 million’, The Canberra Times, 8 May 2017.

[8].          J Massola, ‘Defence to cut hundreds of millions from travel costs’, The Sydney Morning Herald, 24 June 2014.

[9].          DoD, 2016 Defence white paper, 25 February 2016, p. 146.

 

All online articles accessed May 2017. 

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