Chapter 2 - Reform issues
Term of reference (b) required the Committee to
inquire into the effects of the Defence Reform Program (DRP). In so doing, the
Committee also assessed other reforms which preceded it, as some of the
efficiency and rationalisation reforms of the DRP were begun earlier in the
The purpose of these initiatives was to improve the operational capability of
the ADF by moving military personnel from administrative to operational
functions. However, much of the evidence was highly critical of these
rationalisation measures, particularly the DRP. In this chapter, the Committee
considers the reforms made over the last decade and assesses their effects on
Defence, in the light of evidence received during the inquiry.
A history of reform
In 1991, Defence embarked on a program of force
structure adjustments and reform. This was precipitated by a requirement to
contain growing cost pressures within a decreasing resource base. The key reforms are outlined
Force Structure Review (FSR)
This Review restructured the ADF and enhanced
its combat capabilities by:
reducing personnel numbers in headquarters and base support
extending western basing for Navy;
extending northern basing for Army; and
enhancing the forward deployment capacity of the Air Force.
The Commercial Support Program (CSP)
This program required the transfer of non-core
support activities to the civilian sector where operationally feasible,
practicable and cost effective.
The Defence Logisitics Redevelopment Project
This initiated a national storage and
The Defence Reform Program (DRP)
Triggered by the Defence Efficiency Review
(DER), the DRP dictated:
establishment of a Defence Headquarters program and further
reductions in personnel numbers in operational level headquarters;
rationalisation of the Defence Acquisition Organisation;
reduction of military staffing in the Defence Acquisition
establishment of a military Support Command;
establishment of a single Defence Personnel Executive to achieve
greater integration and efficiency of personnel administration and management
amongst the three Services;
merging and contracting out of all basic non-military training
across the three Services; and
rationalisation of medical services.
These reforms have increased the proportion of
personnel assigned to combat and combat-related duties, but reduced the overall
strength of the ADF. The proportion of personnel assigned to combat or
combat-related duties increased from 40percent in 1990 to
62per cent in 2001. ADF strength decreased by 29per cent from about
70,000 personnel in 1989 to approximately 49,500 in May 2001.
Effects of reform on
recruitment and retention
The heart of the recruitment and retention
problem lies in the fact that, during the 1990s, Defence initiated a number of
efficiency and rationalisation measures in order to enhance the ADF’s
operational capability. In the process, the ADF’s strength was reduced by 27
per cent and a workplace environment was established that undermined the
principal reasons for service in the ADF.
The scope of the recruitment and retention
challenges confronting the ADF were encapsulated during the initial public
hearing with the Department of Defence on 25 June 2001, which reported:
Recruiting targets have not been achieved since
financial year 1997-98.
A net annual loss of 1,500 personnel so that the
organisation will not be able to meet a target force of 53,555 personnel by the
Under the DRP, the Defence Force Recruiting
Organisation (DFRO) was required to realise savings of $10 million over
financial years 1997-98 to 1999-2000.
Permanent staffing was reduced from 511 to 421 personnel (military and
The advertising budget was also reduced.
This observation was confirmed by the
Committee’s visit to Career Reference Centres (CRCs) in Darwin and Townsville.
Staff in each location reported that, due to a shortage of uniformed personnel,
they were not able to devote enough time to:
interviewing and screening potential recruits; and
visiting community centres and schools.
Several witnesses in other regions of Australia
noted the reduction of uniformed personnel in recruiting centres:
We have reduced numbers here. We have lost a lot of people in
recruiting centres... We have civilianised recruiting,... Consequently people walk
into the recruiting centres and are lucky to see a uniformed person in that
cell. Our uniformed people down here are not out in the streets any more,
because three quarters of the jobs are civilianised.
It was felt that shortages in uniformed
personnel in recruiting units created a vicious cycle of recruitment and
retention problems. Firstly, some recruits were not correctly screened,
resulting in their discharge early in the recruit training process and obvious
waste of resources. Secondly, some recruits did not receive comprehensive
information on the demands of military service, resulting in their
disillusionment with service life and election for discharge at the end of
their initial engagement. This cycle was confirmed in some written submissions
I am an ex–career adviser for the Defence Force. I believed that
Defence personnel are (sic) able to do a better job at recruiting than
civilians. My reasons at the time were: how can a civilian tell you what it
really is like in the Defence Force?
During a visit to the Headquarters of the DFRO
the Committee was informed that a plan had been implemented to increase
permanent staffing levels, particularly in the Headquarters, from January 2002. The Committee welcomes and
supports this initiative.
Reduced respite postings
In an effort to position a greater proportion of
personnel in the combat force, Defence has reduced the availability of respite
posts for personnel. Respite posts include shore billets for Navy members after
two years at sea, and posts away from operational units in the other two
Services. It also means respite from service in tropical or remote areas, such
as in the Northern Territory or northern Queensland. As one witness explained:
I am in a writers category. My category was cut back from 510 to
276. It seems the Navy wants to concentrate purely on having a Navy at sea.
They took away all our shore billets and they have civilianised a lot of
Another closely-linked issue is that commercial
contractors have taken over many of the technical functions previously carried
out by military personnel to maintain and enhance their trade skills. It
appears that some core support activities may have been allocated to commercial
contract rather than merely non-core support activities. This was explained by
one witness as follows:
In the case of a marine technician who might ordinarily have had
to take out a gearbox and replace it, some of these types of tasks are now
going to contractors, and the marine technician is left to sit idle. So these
kids, despite the fact that they have a will to progress themselves
technically, to progress their competencies, just do not have the opportunity
to progress because there is a civilian person doing the tasks that they could,
and in my view, should be doing.
Another sailor said:
The civilians do the contracts. The government sees them doing
the contracts cheaper and so they say, ‘Okay, we’ll hand out more contracts.’
consequently they headhunt more navy personnel. Consequently the experience
level drops. There are electronics technicians down in the workshops who have
never fixed a piece of kit. That is no exaggeration. they have been in the
navy four to five years now and they have never fixed a piece of kit.
This is particularly serious in the Navy.
Sailors in technical musters are not allowed to do anything but the most menial
of technical tasks ashore. It means that they get no opportunity to practise
their trade skills ashore. Their work is therefore unsatisfying and
frustrating. It becomes questionable whether their skills fall below the
required standards for sea postings. With minimum manning, that could also pose
a serious problem for a ship in a naval operation.
The reduction in the number of respite postings
available to personnel has been the most detrimental of all effects created by
Defence reform. This is due to the fact that it has created a retention problem
and experienced personnel are finding it more difficult to continue their
service in the ADF. Defence must review the number of uniformed positions in
training and base support locations and create worthwhile respite positions to
enable the rotation of its combat personnel.
The Committee recommends that the Department of Defence
review all uniformed personnel listings at training and base support locations
to ensure that:
Positions are available for uniformed ADF personnel to
undertake respite posting.
Positions are available for uniformed ADF personnel to
practise their trade skills.
In base after base visited by the Committee,
particularly those involved in training or support functions, which provide
many of the respite posts, significant manning shortages were identified.
These shortages resulted in the remaining staff having to do the work of more
than one person. Consequently, they have to work long hours, which not only
affects their own well-being but also puts pressure on their families or
relationships. In effect, the work tempo in these bases was no better than
many of the operational bases, which was defeating the purpose of providing
respite for members who had come from operational units or sea postings.
It also means that they are also unavailable to
attend various training and promotion courses, possibly putting them at a
disadvantage in their career. This issue was a consistent theme throughout the
inquiry. For example, a witness at Norforce in Darwin, albeit not in a respite
position, explained her situation:
One thing, on the regular side, is that I am a private soldier
and I am posted into a corporal’s position – this is within Norforce itself –
and I also do the jobs of a regular sergeant and a reserve private. The
corporal job that I do is a specialist job: nobody else can do it, because they
do not have the training in it. Since being in Norforce I have missed out on
two truck driver courses which would have extended my qualifications. I have
also missed out so far on two promotion courses. I am hoping to get on the one
at the end of the year.
The witness told the Committee that she was
regarded as being indispensable in her current position and therefore could not
be released to attend courses. This was affecting her career:
Without a hook or even two hooks on your arm you are – I am
still – the lowest denominator. Even though I am doing that job [that of a
corporal], and I am doing the sergeant’s job as well, without those there is
nothing. I am being posted at the end of the year, and unless I have at least
one hook I will go back to the bottom of the barrel again because I am going to
Many other members complained about not being
released to attend trade, general and promotion courses because of
under-manning at their bases. It was regarded as being detrimental to their
careers and a source of annoyance and frustration. In the Navy, the Committee
was told that the only way to attend courses was to lodge a discharge notice.
A Chief Petty Officer Writer, a fourth
generation member of the Navy, made a submission to the Committee about the
effects of the DRP and CSP reforms. The frustration with the implementation of
the reforms comes through clearly in this heartfelt submission. This
submission is reproduced in Appendix 6 as an example of the way in which the
reforms are hurting ADF personnel.
Reduced levels of base support
The decision to transfer non-core support
activities to commercial contract also appears to have had a negative effect on
ADF personnel. The Committee received evidence that the standard of base and
administrative support provided to the ADF by commercial contractors varied
around Australia. This may be due to the fact that many base support contracts
were locally arranged at short notice and loosely defined. However, the decline
in levels of support to personnel is affecting morale, as related by the
We would probably argue that we do not get the same service from
the areas that have been civilianised, particularly when it comes to computer
support and investigative capability.
Several witnesses suggested that the quantity
and quality of food provided at base mess facilities had been reduced under
commercial contract arrangements.
Many argued that the standard and frequency of barracks cleaning services had
Others explained that commercial contractors did not understand military
requirements, were not responsive to customer demands after hours and actually
created extra work for military staff:
...either they stuff it up and we have got to do it again anyway
or they do what they call a rebuild by respray: they just paint the part and
send it back to Army. There is no accountability for that sort of repair. You
could hear many horror stories from the guys in the room about the equipment we
have got back from civil repair where nothing has been done. All they have done
is wire brushed it off, given it a spray paint and sent it back to the Army,
and they charge the Army an arm and a leg for the equipment they repaired.
Clearly, the Department of Defence’s rush to
achieve savings resulted in contracts, which, in many cases, have provided a
lower level of service than had previously been provided. It has also
inconvenienced and frustrated serving members on various bases, particularly as
the looseness of the contracts provide the ADF with no recourse to have
services improved. Before service and facility contracts are renewed, the
Department of Defence must review the standard of service provided at each base
and ensure that future contracts do not expose ADF personnel to sub-standard
levels of service and facilities. Although standards should, as far as
possible, be uniform throughout Australia, the range of services provided by
commercial contractors should be appropriate to each location.
The Committee recommends that, as contracts expire, the
Department of Defence review all base support commercial contracts to ensure
that an ADF–wide standard of base support is provided and that a range of
services, such as those included below, be provided as appropriate to each
catering services that meet the diverse needs of ADF
secure, safe and hygienic living accommodation;
financial services; and
basic retail services.
Management of reform
The Report of the Defence Efficiency Review
recommended the establishment of an Implementation Team to assist line managers
to prepare, commit and implement the detailed plans of reform. Further, the Report
recommended a special group be created within the Implementation Team to
‘coordinate personnel adjustments and liaise with personnel authorities’. The Committee could find no
evidence to suggest that these recommendations had been followed through during
reform activities. Rather, it appears that commercial contracting has been
arranged on a regional basis and personnel reductions have been directed
without proper liaison with personnel authorities.
Undoubtedly, the series of efficiency and
rationalisation reforms instigated within the Department of Defence during the
1990s, and particularly the DRP, while possibly achieving their initial
short-term aims, have had serious ramifications for retention and recruitment.
The frustration, disillusionment and even anger stemming from the negative effects
of civilianisation, outsourcing and reduction in manning of support functions
in all three Services around Australia was very evident, both in public
evidence and in private discussion. The long working hours for some people,
the menial and boring tasks for others and the lack of joy and satisfaction in
their work and Service life are taking their toll among all levels of ADF
personnel. Many are discharging from the Services at the earliest opportunity.
As serving members discharge, greater pressure is placed on the remaining
members, who will have to work harder and longer, until they decide, too, that
it is no longer worthwhile remaining in the Services.
Alternatively, contractors, which have contracts
for work previously done by ADF members, poach qualified and experienced
members with offers that many cannot refuse. They can offer lucrative
remuneration packages because they do not have to train their staff; they lure
trained staff from the Services who, in most cases, were trade trained by the ADF.
It is the cost of all the training that members undertake and their experience
that are lost when members discharge before Defence is able to recoup its
investment in them. The Committee understands that ten years is about the
break-even point for members with technical skills. Wherever the break-even
point is for individual members, whenever members discharge prior to that time,
The recent high attrition rate includes many
serving members who are discharging after their initial period of service,
generally four or six years. There is copious evidence to suggest that many of
these short-serving members are discharging mainly because of the effects on
them of the efficiency and rationalisation reforms.
It is not just the serving members themselves
who are affected by this problem. Their families or partners also suffer.
They have to take the brunt of all the disadvantages of regular moves,
sometimes poor housing or housing on the periphery of towns and cities where
facilities and amenities are basic or lacking, difficulties in getting spouse
employment and educational problems for the children. It is often the families
who rebel first, giving ultimatums – leave the Service or we leave you.
The savings achieved by the efficiency and rationalisation
reforms that have been implemented are already or will be false economies. It
is almost certain that the detrimental effects of those reforms will cost the
ADF a lot more than the ADF saved through the economies introduced by the
reforms. The cost of having to recruit and train new serving members to fill
the places of people, who discharged as a direct result of the reforms, is a
senseless waste of effort and resources. Although the ADF is change weary,
until something is done to change the worst elements of the efficiency and
rationalisation reforms, the Services will continue to haemorrhage in terms of
personnel retention, and the cost of replacing those who leave because of the
reforms will continue to escalate.
The Committee believes that there was no
strategic planning for the efficiency and rationalisation reforms. It was not
so much the concept but the implementation that was at fault. The
ramifications of the implementation of the reforms for the ADF and serving
personnel, in particular, were not properly assessed.
It is important that future reform of the ADF be
carried out only after a study has been done of the likely effects of the
reform on ADF personnel. Such a measure should avoid the mistakes that were
made in the implementation of the DRP. Should future reform be substantial and
widespread, it should be controlled, supervised and monitored from a central
body within Defence. If it were to include contracts with commercial operators
in different States and Territories, the contracts should be drawn up or at
least closely vetted by a central body within Defence, to ensure that the
contracts protect the interests of Defence and its personnel. Evidence given
to the Committee indicated that commercial contracts under the CSP were, in
many cases, documents which were poorly drafted and did not protect the
interests of Defence personnel. It was clear that many ADF personnel were
frustrated or irate that the contracts allowed contractors to escape their
responsibilities in providing adequate services on some bases.
The Committee recommends that future Defence reform
should not be undertaken without:
an ADF Personnel Environment Impact Study (PEIS); and
an accepted Implementation Plan which incorporates the establishment
of an Implementation Team.
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