Defence ordered to slash $10bn
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Defence ordered to slash $10bn
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.
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.
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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?
What's it cost to sharpen a government departmental pencil?
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.
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GB:
http://www.defence.gov.au/DefenceBlo...23.htm#Leaders
Also discussed here:
http://www.pprune.org/forums/showthread.php?t=318805
CL
http://www.defence.gov.au/DefenceBlo...23.htm#Leaders
Also discussed here:
http://www.pprune.org/forums/showthread.php?t=318805
CL
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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.
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.
on the end or is it one of those really flash pencils that looks like a pen and requires refills??
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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."
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."
Last edited by Wiley; 22nd Mar 2008 at 09:39.
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W19,
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...
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
Today 02:48
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Hey Indos - Come and get us - Doors open!
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.
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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 
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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!
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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?
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?
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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.....
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.....
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.
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.
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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 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
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
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Parkinson's Law
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. 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, 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.
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. 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, 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.
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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.
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.
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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.
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.
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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???????????
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???????????