Captain
Because the ADF is not a business, and therefore is not concerned with turning a profit. Their primary concern is producing the required number of pilots of the required standard.
Sounds like a good reason to outsource the whole thing then... maybe the taxpayer would get a bit more accountability and better value - and better pilots if the process was not so focussed on achieving 'the standard' by rejection. No-one wants you to make a profit but we do want you to be good at what you do... If you find it nescessary to reject so many then maybe you're not so good at what you do?
The financial and human cost of doing it your way maybe needs looking at!