Defence ordered to slash $10bn

[wessex19]

source; The Australian

Patrick Walters, National security editor | March 22, 2008

THE Defence Department has been ordered to find $10 billion worth of savings over the next decade, including possible staff cutbacks, as the Rudd Government tries to exert greater financial discipline across big-spending departments.

The crackdown on spending could force a cut in the department's 20,000-strong civilian workforce, which has ballooned by almost 4000 personnel, or more than 20 per cent, since 2001.

The Government has guaranteed that the Defence budget will continue to grow by 3per cent a year in real terms.

The department's non-civilian operations are also insulated from the budget cuts sought across the public service by Finance Minister Lindsay Tanner, including the 3.25per cent "efficiency dividend" affecting every other department.

But Defence Minister Joel Fitzgibbon ordered the crackdown on costs within Defence after being advised of massive blowouts in projected spending, including equipment, personnel and operating costs.

Mr Fitzgibbon admitted this week that the $22 billion defence budget was "a mess", with the cost of operating and sustaining the defence force "alarmingly underestimated and underfunded".

He said the shortfall in operating and personnel costs over the next decade could be up to $6billion, and acknowledged that some major equipment projects were proving "more than problematic".

An internal Defence Department memorandum obtained by The Weekend Australian - dated March 20 and signed by departmental head Nick Warner and defence chief Air Chief Marshal Angus Houston - says Defence must identify savings of $1 billion a year, or up to 5per cent of its annual budget.

The memorandum was sent one day after Kevin Rudd this week announced the appointment of new heads to the army, airforce and navy, and extended Air Chief Marshal Houston's tenure by three years.

The pair identify significant financial challenges, including: expected new cost pressures flowing from the imminent 2008 defence white paper; the already-identified shortfall in personnel and operating costs; and the management of new capital equipment projects, as well as weapons, munitions and explosives.

"Following extensive discussions with the minister, we have decided that to meet these challenges we must find efficiency and economy opportunities in the order of $10billion over the 2008-18 Defence Management and Finance Plan," they said.

"Given the size of our funding base and its commitment to future growth, the Government expects us to identify significant savings to fund higher priority capabilities. Our aim is to instil an enhanced culture of efficiency and economy in Defence. As we become more efficient there may be a need for less Australian Public Service staff."

But analysts said it would be impossible for Defence to realise the current 10-year, $50 billion capability plan, including the purchase of new warships and fighter planes, even if the 3per cent pledge was honoured by the Government.

Defence will not be able to afford all its planned major new acquisitions over the next decade, led by the $16billion joint strike fighter.

Defence costs across the board, including equipment, operating and personnel costs, have been increasing at well above the rate of inflation.

The Defence Department is already subject to the Government's 3.25per cent "efficiency dividend" but this applies only to civilian administration and not to defence force operations, meaning only $2.4 billion of the $22billion defence budget is affected.

The Government has capped recruitment of civilians into the ADF as it seeks to cut expenses. Hiring of uniformed staff remains unaffected, but the ADF has been restricted to recruiting within the federal public service to fill its civilian vacancies.

In their memo to staff, the defence chiefs acknowledge that finding $10billion worth of savings will be tough.

"To meet these challenges Defence must find efficiencies which free up resources. We need to identify lower priority activities and ask whether they are as important as new priorities. We must challenge the need, scope and cost of new priorities," Mr Warner and Air Chief Marshal Houston write.

They say that any civilian personnel cuts would be managed in line with Australian Public Service Commission guidelines.

[Milt]

Defence Spending a lost cause when regulations require that licensed electricians have to be sent from Canberra to Cooma to change a light globe or fluero tube at a defence site. Cost around $350.

What's it cost to sharpen a government departmental pencil?

[Going Boeing]

The memorandum was sent one day after Kevin Rudd this week announced the appointment of new heads to the army, airforce and navy, and extended Air Chief Marshal Houston's tenure by three years.

Can someone advise who the new heads to the army, airforce and navy are?

[ChickenLips]

GB:

http://www.defence.gov.au/DefenceBlog/2008/0317_0323.htm#Leaders

Also discussed here:

http://www.pprune.org/forums/showthread.php?t=318805

CL

[slow n low]

Milt,

Lets see, by the time you account for the pencil implementation project management team, the DMO study into making an "Australian" version of an off the shelf pencil sharpener, manufacture and through life support of said sharpener, and of course the 3 day training package for all defence members....

That comes to $3184.50 per pencil. :E:E

[wessex19]

does this pencil have a rubber (yes eraser):rolleyes: on the end or is it one of those really flash pencils that looks like a pen and requires refills??

[Wiley]

Poor bloody Angus... he's going to pay a very high price for being the only one from among all the top level uniforms who served under the last government to receive a "vote of confidence" from our own New Labor.

I'll bet that three years from now, he'll be wishing he'd taken the bowler hat along with everyone else and got himself a highly paid job as a Canberra gun runner. Ooodles more cash, lots more time to play golf and be with the family, a boss who actually appreciates the work you put in, and far fewer ulcers.

One thing we can all guarantee - he'll have infinitely more difficulty removing just one low grade clerk from Russell Hill - or anyone who doesn't wear a uniform - than he will in slashing and burning operational units to the quick.

And I'll bet the people who made the decisions on the Seasprite will be as safe as houses from any cutbacks. (Hurrumphs in best Sir Humphry style): "We can't afford to lose top level people of that calibre, Minister."

[Green on, Go!]

W19,

does this pencil have a rubber (yes eraser) on the end or is it one of those really flash pencils that looks like a pen and requires refills??
Today 02:48


No the pencil is fitted for but not with an eraser, however project AIR6666 has been raised to develop and implement a world-first 'dual-eraser' system to improve capability and provide much needed redundancy...;)

[Spaz Modic]

:D Tanner the Spanner has got out his torque wrench and putting the squeeze on everything in his tunnel vision. He is a d******d of the highest order.
Aussie voters got what they wanted. :E

[Angle of Attack]

I'd like to know the real story behind it rather than this stupid media sensationalism, I understand they want 1 billion a year savings for 10 years on the administration (about 5% of annual budget) but the government has also pledged if you read fine print in some reputable news organisations of 3% per year in real money terms to the front line operations (In this day and age it is around 6-7% per year increase. depends on inflation of course) So is this just a cut from one area and give to other? Sounds to me they want to encourage a reduction in all the red-tape in the office towers and redistribute some money to where it counts. Anyway wait until the budget to get the real story :confused:

[The Voice]

A of A - of course there has to be another side to the story - here's something to ponder; as part of the retention plan, on 1 Jul 08 the new housing assistance scheme kicks off - surely thats going to cost a bomb to finance on it's own!

[Naked_recommiting]

While I'm all for red tape cost cutting and a squeeze on Defence public service spending, I'd hate for this to be another costly exercise to confirm whats going on is 'about right'. Perhaps an 'although the previous government has put us in a tight spot, we're going to pioneer ahead with the same policy... now just delayed 6 months' type spin (bit like the stuper hornet?).

Voice - I think the home assistance scheme (thread drifting) is actually seen as some what a cost saving measure - most members will be receiving less actual $'s support than what they would have otherwise received through rental assistance - not to mention that reduced workload on those poor people at DHA - surely some investigation could be done into what occurs behind those doors?:hmm:

[Mr YSSY]

So, say they slash the so-called bloated 4,000 non-uniform jobs. Assuming an average salary package of $80,000, and adding the usual 10% for office space, telephones, computers, etc, this comes to a saving of around $352m pa.

Nowhere near the $1b pa they are talking about.

Maybe Joel will need to wait for the result of a review to understand what is really going on before he opens his mouth. Hang on, sounds like the Super Hornets.....

[Stationair8]

Perhaps if we bought new choppers instead of 1960's Seasprites that might help, for starters.

What about getting some corporate sponsorship for the big ticket items ie McDonalds could put their logo on the new FA-18's,
KFC could do the same for the Roulettes,
Jack Daniels could sponsor an Army regiment, although a bit tricky in those Middle East countries that forbid alcohol.

[Capt Wally]

scrap the whole defence system (would save zillions) & put up a really really really high fence around the whole country to keep out the 'tea towel heads 'etc. Signs can be placed on that high fence saying "keep out, or trespasers will be forced to watch a thousand TV eposodes of 'Home & Away'in a row:E As for aerial attacks? well if it's Syd their going to attack then they'll have to hold like everyone else !:)
All just a joke but so is the new Govt, the rot is starting!


CW:ok:

[altonacrude]

Major C Northcote Parkinson predicted in his 1958 book, Parkinson's Law, that the Royal Navy would eventually have more admirals than ships. Which raises the question as to whether the RAAF will eventually on the current trend have more Air Vice-Marshalls than aircraft.

Parkinson's Law, as presented in his book, was that in a bureaucracy, work expands so as to fill the time available for its completion (http://www.heretical.com/miscella/parkinsl.html). This is clearly what has happened in the Australian Department of Defense, resulting in creation of thousands of additional civilian jobs.

While emphasising emphatically that I have no sympathy whatever for their objectives, I notice that the Afghan Taliban have no requirement for any sort of helicopters, nor F-whatever fighter aircraft nor Abrams A-something tanks nor aircraft large enough to hold a sitting of federal parliament inside to ferry the tanks around because they are too heavy to travel by rail or road anywhere in the region. Yet the Taliban seem to be holding their own perfectly well without any of these.

That seems also to be true of insurgents in East Timor, PNG, Bouganvillea, Fiji and the Solomon Islands.

I enormously admire the exploits of Australia's Special Forces in world trouble spots, sketchy as reports about them are. But I wonder whether, with all these bureaucrats and all this military hardware, none of which seems to work quite as it should, the defenders of our nation have somehow missed the point.

Defence Minister FitzGibbon announced on Wednesday the preparation of a new White Paper (http://www.smh.com.au/news/national/government-recruits-former-crucial-howard-adviser/2008/03/18/1205602385185.html), which will address Australia's expected security needs for the next 20 years. It will be interesting to see what conclusions it reaches. The last government defence White Paper was prepared in 2000. The world has changed since then.

[Capt Wally]

yes 'pas' I could give Labor some advice but they won't "Ruddy" well listen !:E


CW

[dsham]

Anyone who has ever had the pleasure to visit defence plaza on Pitt St will know what i am talking about. The amount of oxygen thieving solitaire championing defence civilians that are entombed in that building astounds me.

Get rid of them and go back to the old days when if you needed something you saw a defence member about it - not be directed to the local customer support cell - which is actually on another base.

[BombsGone]

altonacrude you wrote: "I notice that the Afghan Taliban have no requirement for any sort of helicopters, nor F-whatever fighter aircraft nor Abrams A-something tanks nor aircraft large enough to hold a sitting of federal parliament inside to ferry the tanks around because they are too heavy to travel by rail or road anywhere in the region. Yet the Taliban seem to be holding their own perfectly well without any of these."

A common fallacy that if we aren't deploying tanks/fighters we don't need them. If the Taliban could win in open battle they would, they can't because of the high end war fighting assets deployed by the US and others. The armour and air assets they owned previously have all been destroyed. They have the requirement they just cant fill it, so are left fighting a guerrilla war because that is all that is available to them. If they were able to engage in open warfare our casualties would be orders of magnitude higher. I wouldn't say they are holding their own so much as haven't yet been totally erradicated.

[tio540]

I am somewhat confused. The defence minister announced last week that defence was under funded , by the previous Liberal government,
6 Billion dollars

Now it is announced, by the same minister, that the defence budget is to be cut 10 Billion dollars.

So is it under or over funded?

HUH???????????

[mmciau]

Now all the projected savings will enable Rudd to fund the old Labor favourite

"Artists and Poets-in-Residence" at every capital city's Trades Hall!!

Mike

[Defenestrator]

It's beyond me how the nation voted the d1ckhead in. Given that JW was running amok but anything is better than Rudd. All any party has to do is stand up and they'll flog the clown at the next election. Tis a sad reflection on the state of the nation.

D:yuk:

[Lead Balloon]

Pass a Frozo

In your partisan diatribe, you fail to mention Seasprites! All of the pitiful savings mention by Brendan Nelson are a factor of 10 less than the monumental srew up that was the Seasprite project. Nor do mention other blunders like the inability to shift enough combat troops to Dili in 1999 (3 years after taking office)... Ain't politics grand.

Milton Freidman; was an advocate of smaller government, Conscription was un-economic, wanted to get rid of the Reserve Bank and pushed for the legalisation of weed. He was a truly great economist and probably the most influencial person in the last Century - so how is it you think the last lot aligned with his philosophy???

[slow n low]

erm.... wasn't the Seasprite an orphan child of the previous Labour government? :confused:

[Lead Balloon]

Got to love the duality here Mr Frozo!

So when "The Last Government" did it - its only bad if it wasn't a Government of your persuasion... I suggest you re-read your posts.

Interfet... Think back... Think... Remember the fallout from only having just enough troops to do a lousy 3000 person deployment internationally - then started the belated big spend by the warrior prime minister, Howard. Check Hansard...

You still didn't respond to how Freidman was honoured by the last lot!

Don't take this as support from me for the Crudd Government - they lost me on copying the vote grabbing tax cuts during a forecasted inflationary expansion.

Like all Governments - First term for screwups, Second term for good stuff, third term for decline.

[Wiley]

Major cockups with weapons systems for the Navy preceded the Seasprites, When the FFGs first arrived from the US, there was no helo in the RAN inventory to put on them (robbing the ship of a, if not the major part of its ASW capabilities). The fix the Navy put into place was classic - they flew a Kiowa out from Nowra to bung on the helideck as each new FFG steamed into Sydney Harbour and the Oz medjia and public didn't know (or care) any better.

[teresa green]

While you are having a go at Nelson, have you forgotten that Bomber Beazley bought subs that sounded like tractors underwater. Now there's a smart move:D

[Ducksbum]

So anyway, getting back to the thread. In the spare nanosecond I had today I thought I would read the Defence wide email from the secretary for defence as I needed a good laugh. Was amused to see that he suggested we could save money by:
turning off lights;
printing double sided;
only using one piece of toilet paper etc...
and......
FLY LESS!

WTF!

[tio540]

"My vision for the future of Australia". Quote Keven RUDD

It just doesn't include the military, home ownership, electricity, petrol or anything you might actually need.

http://getup.org.au/promisewatch/

[Like This - Do That]

A related rumour I've seen & heard is that Brother # 1 Commissar Rudd Brother Doctor Dada told some of the blokes who have black tape over their eyes that Campbell Barracks (that's beachside Swanbourne in Perth) was too valuable to remain in defence hands.

So Campbell Barracks closed and redeveloped and the [sssshh] Regt moved to where? Bindoon? That'll do retention a world of good ..... imagine the joy: "Darling I've got good news and bad news - the good news is I'm in and you'll only see me for 2 months a year; the bad news is you'd better get used to ticks and no mobile phone coverage 'cos we're moving to Bindoon". :}

Maybe it's just a rumour and they're moving to Cultana instead :E

Don't blame me - I didn't vote ALP

[control snatch]

Interesting I didn't know the Bs were planning that one. That would be a huge slap in the face for a regiment that has done so much good in recent times.

Navy seems to have done well over the years to hang on to arguably the most pristine real estate in the country.

[Chronic Snoozer]

Campbell Barracks would have to be worth at least '......One M-i-l-l-i-o-n dollars'

[Truckmasters]

A 300 square metre block will be worth about 1 million dollars in that location.
Just tell me how many housing blocks of that size you'll get from Campbell barracks and then you'll have the real estimate of its worth.

[Agony]

Paffie,

No amount of money or time was ever going to allow the Seasprite any capability of note. At least not with regard to safety....................:cool:

[Condition lever]

I know - stop paying P.A.F.!!!!!! ;)

[Chronic Snoozer]

Yeah, I know mate, I was doing a poor rip off of Dr Evil......

[Tibbsy]

While you are having a go at Nelson, have you forgotten that Bomber Beazley bought subs that sounded like tractors underwater. Now there's a smart move

And this is the sort of uninformed twaddle spouted by those who believe the things they read in a sensationalist and uniformed media... :=

[teresa green]

Tibbsy, perhaps you should read a copy of problems of the "Collins class Sub" after the first left ADL. To say it was a heap of S$%# was putting it mildly. In fact they had to call in the yanks to get things sorted out. Did I say tractor under water, I will amend that, try Harvester. And that from the mouths of her crew. Now she ok,but sadly lacks enough crews to use them to their full potential. (you just wanna hope the Kiwis never get nasty)!!

[Going Boeing]

Teresa, the Collins class subs did have some serious teething problems but they have now matured into world class subs. The early problems were heavily embellished in the press because the "surface Navy" types (who leaked all the information) were hell bent on ensuring that the two optional additional subs (No's 7 & 8) in the original contract, were not built. If the options had been taken up, they were concerned that there would be less money available to build more "floating gin palaces" for them to strut around in.

To a submariner, there are only two types of vessels:- submarines and targets!

[tio540]

If you wanted to procure a submarine, surely you would approach the Americans, Germans, or Brits, with an history of construction. Why would you purchase the Collins, an "on paper" design from a small neutral country, which hadn't even built that particular vessel?

It's a good thing we don't have a space program, it would probably be bought from Nigeria, second hand.

[Tibbsy]

Teresa, no doubt you are talking about the McIntosh-Prescott 'Report to the Minister for Defence on the Collins Class Submarine and Related Matters' which indeed found that the submarines were not fit for combat until several technical issues were resolved. The problems were not surprising given that the project was the most technically complex industrial endeavour in Australian manufacturing history. Similarly, F111s experienced several technical hurdles and a similar level of uninformed and short sighted bashing from the media. Expect much of the same with the Lightning.

From the mouths of her crew you will hear that they are a world class diesel boat, something that many of Collins's 'targets' on RIMPAC and other exercises will attest to.

Criticising Beazley for buying the subs is a bit rich given their capability today supports the decision.

As for buying them from Sweden, why should that matter Tio540? You infer they (Kockums) had no experience in subs when in fact the Collins was the culmination of five or six generations of very successful Kockum's designed and built subs. Once again, the capability of the subs stands as testimony to the acquisition decision.

Of course Tio540, if you maintain a masters degree in defence acquisition or have some relevant experience in what you're talking about, I'd be happy to defer to your opinion.

[tio540]

Tibbsy, you appear passionate about them which is great. On one of the first exercises to demonstrate the stealth Collins Class capability, the sub was found visually, without technical aids, within 30 mins of the exercise beginning.

[Brian Abraham]

sub was found visually, without technical aids, within 30 mins of the exercise beginning
Given the usual constraints placed on exercises means nothing really. Once found a sub on an exercise while flying a Huey with nothing more sophisicated than the Mark 1 Mod 0 eyeball. Did have a cunning foriegn submariner on board though. Sub was wondering why he couldn't see out his periscope - rotor wash driven spray. :ok:

[teresa green]

Well they are back in the news today, sadly called "dud subs" problems once more, (if you can believe the sunday papers). I am all for anything built in Australia with Australian tradesmen (and women) getting the work and experience but gee they have become a headache Tibbsy for all concerned.

[oldpinger]

At least when they are bashing collins the Sea Sprite is off the front page....:E

B Abraham- Once had the embarrassment during an exercise of a harrier pilot find the sub in the opposite direction to where all the ASW sea kings and Frigates were looking:O

[altonacrude]

I previously posted that:

While emphasising emphatically that I have no sympathy whatever for their objectives, I notice that the Afghan Taliban have no requirement for any sort of helicopters, nor F-whatever fighter aircraft nor Abrams A-something tanks nor aircraft large enough to hold a sitting of federal parliament inside to ferry the tanks around because they are too heavy to travel by rail or road anywhere in the region. Yet the Taliban seem to be holding their own perfectly well without any of these.

BombsAway responded:

A common fallacy that if we aren't deploying tanks/fighters we don't need them. If the Taliban could win in open battle they would, they can't because of the high end war fighting assets deployed by the US and others.

His cry against common fallacy has not been heard loudly enough around the world. The New York Times reports that US Defense Secretary Robert Gates is now suffering from the same fallacy (http://www.nytimes.com/2008/04/22/washington/22cnd-military.html?ex=1366603200&en=c4d7c59393d8e86f&ei=5124&partner=permalink&exprod=permalink) (emphasis added):


The Air Force allows only those officially rated as pilots to sit at the remote-controls of its unmanned reconnaissance vehicles, a policy that Mr. Gates says has limited how many of these aircraft it can deploy. The Army allows enlisted personnel and noncommissioned officers to apply for those jobs. The push to add surveillance to the war zones also may require a rethinking of how the current crop of jet-fighters are outfitted for war, as well as whether to look at low-tech fixes, such as using off-the-lot Cessnas outfitted with surveillance gear.

[aussie027]

Collins Class subs are in fact the most advanced SSK's in the world. Period.
The media always blows all the "alleged" facts out of all proportion.
They dont report the actual facts if they don't make a good story.

One thing that is never printed or reported anywhere but is true none the less is that designing and building a modern submarine, such as the Collins class from scratch required the same level of engineering expertise as designing and building the B-2 bomber from scratch!!!
That is , an extremely advanced stealth platform, after all that is what a submarine is!!
Point I am making is that subs are one of the most complex type of vehicles made,along with advanced aircraft and spacecraft.
Obviously such an enormous and complex task will run into problems. Some of the problems on Collins should certainly not have occurred as the technology in the problem areas in many cases was already extremely mature, eg periscope design.
Flow noise from poor design of sail/hull join and other places would hopefully have been pretty much eleminated at earlier hydrodynamic design phases but for various reasons was obviously not.
Then again with all the wind tunnel and CAD models etc with aircraft design similar minor aerodynamic flaws are still discovered later during flight testing on occasion that then require tweaking. That is what flight testing and test pilots/engineers get paid for.
Collins class subs have achieved a remarkable level of success over the years in international exercises and I have seen reports from naval officers saying they are damn glad we will be allies in any future conflict as they would hate to be fighting our subs.
RAN crews are top notch and can kick major nuclear powered butt.:ok:

[tio540]

So why does no one else buy them?

[aussie027]

Tio540,
No one else probably wants them due to cost and the fact that they are the largest non nuclear subs afloat. They were designed specifically for Australia's requirements.
All other non nuke SSK's were too small in size anyway for the RANs enormous 2 ocean patrol zones, Indian and Pacific and other areas of interest in times of conflict.
Most other navies in Asia and sub continent are using other smaller Western designs or Russian Kilo class versions.
Besides, for security and too ensure a capability gap we shouldn't want anyone else operating them.:E