David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

asked the Minister representing the Minister for Defence, upon notice, on 21 March 2011:

(1) From which areas of expenditure will the enhanced force protection measures be made.

(2) What specific programs will be cut or deferred to meet this cost.

(3) Why did the Government cease disclosing deferrals in expenditure in the 2008-09 Budget which has continued through to the 2010-11 Budget.

(4) (a) What are the specific deferrals in expenditure since 2008-09; and (b) why have these deferrals been made.

(5) What percentage increase, if any, will be made to enable future capital equipment initiatives over the forward estimates period.

(6) As it is not clear in the 2010-11 Budget, what specific projects are planned for approval in 2010-11.

(7) (a) What programs in 2010-11 will now have to be resourced through absorbed costs; and (b) what programs have been cancelled or deferred to enable these costs to be absorbed.

(8) Of the $20.6 billion worth of savings under the Strategic Reform Program (SRP) it would appear that $4.6 billion of this involves the re-allocation of funds and is not a savings item at all - how can this claim of savings be made when it is in fact a reallocation of funds.

(9) Under the SRP, why has the number of civilian employees to be cut been reduced from the forecast 3 125 to 1 708.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

The Minister for Defence has provided the following answer to the honourable senator's question:

(1) As at 31 December 2010:

The Defence funded component of the Force Protection Review, $912 million has been funded as follows:

Reprogramming of the Defence Capability Program, reprioritisation of lower priority initiatives and reprogramming of facilities program (primarily Single Leap 2) to better align its cash provision the revised construction timetable ($436.1m), Existing capability projects ($402.3m); and An amount of $73.5m reallocated within Defence by rebalancing a very small number of DCP projects.

(2) Defence has either delayed or revised the expenditure spread for a total of 11 Defence Capability Plan Projects to fund the Force Protection Review.

(3) Defence has not ceased disclosing information. As a consequence of the 2009 Defence White Paper, a new funding model was applied to the Defence budget and therefore there was no appropriation reprogramming in the 2009-10 budget.

Appropriation reprogramming was again undertaken in the 2010-11 budget as shown in the Portfolio Budget Statements 2010-11 (pg 22, Table 10: Budget Measures and Other Budget Adjustments).

(4) (a) and (b). As per Attachment A (available from the Senator Table Office).

(5) Defence has allocated funding to capital investment programs on the basis of indexation rates weighted specifically to the relevant industries, as recommended in the 2008 Defence Budget Audit.

(6) Planned project approvals for 2010-11 are provided in Tables 33 and 34 of the Defence Portfolio Budget Statements 2010-11(PBS 2010-11). An update of major projects that have been approved since the PBS 10-11 is also provided at Table 39 and 40 of the Defence Portfolio Additional Estimates Statements 2010-11.

(7) (a) and (b). In the 2010-11 Budget, the Government agreed to an investment of $1.1 billion for enhanced force protection capabilities, for which the Government provided new funding of $221.6 million. The remainder will predominately be funded from Defence's existing capital investment program as follows:

Reprogramming of the Defence Capability Program, reprioritisation of lower priority initiatives and reprogramming of facilities program (primarily Single Leap 2) to better align its cash provision the revised construction timetable ($436.1m), Existing capability projects ($402.3m); and An amount of $73.5m reallocated within Defence by rebalancing a very small number of DCP projects.

(8) The Strategic Reform Program is a comprehensive program that features many aspects of reform that are not directly focused on efficiency. The reallocation of funds in the "Other Cost Reductions" component reflects an increase in the efficiency with which Defence allocated resources. It also reflects improved Defence planning and understanding of the Defence Budget. These are all key outcomes of the Strategic Reform Program.

(9) As recommended by the Defence Budget Audit (DBA), Defence undertook a detailed diagnostic to validate the DBA findings to ensure reform is sustainable and achievable. This meant that Defence's approach to specific reform initiatives diverged from the initial analysis provided in the DBA. While workforce implications have changed following the diagnostics, the overall cost reduction target of $20 billion by 2018-19 will still be achieved.

Members of Parliament and other interested parties have combined workforce reductions from efficiency savings and the 0.7% productivity to give DBA workforce reduction totals of 3125 civilians and 1713 military compared to SRP reductions of 1708 civilians and 859 military.

The difference is attributed to adjustments to DMO and DSTO workforce savings, removal of operational and capability related workforce from the baseline and savings, inclusion of Efficiency and Effectiveness savings for DMO and DSTO, and inclusion of Logistics workforce savings.

Within SRP, there is growth within civilian positions under the Workforce and Shared Services Reform and Non Equipment Procurement Streams. The total workforce growth is 1,416 (Civilianisation 535 and Contractor Conversions 881) across the decade realising approximately $1b in savings due to the reduced cost of employing civilians into these support roles.

Total APS efficiency improvements comprise APS WSSR efficiency savings of 1374 FTE, 5 FTE associated with ADF Gap Year reductions and 0.7% Productivity savings of 729 FTE. The net workforce impact by 2018-19 after taking into account FTE workforce growth associated with Contractor Conversions and Civilianisation is a saving of 1573 FTE.

Further savings of up to 124 FTE associated with Logistics Stream reform are yet to be finalised.

The ADF efficiency improvements comprise 400 AFS Efficiency savings, civilianisation of 535 positions, 239 AFS associated with ADF Gap Year reductions and 455 AFS for 0.7% Productivity savings. Further savings of up to 38 AFS associated with Logistics Stream reform are yet to be finalised.