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

asked the Minister for Defence, upon notice, on 5 March 2012:

As at 31 December 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 2011 12 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 2011 12 Budget, what specific projects are planned for approval in 2011 12.

(7) (a) What programs in 2011 12 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: (a) Why has the number of civilian employees to be cut been reduced from the forecast 3 125; and (b) What is the new figure.

Bob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

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

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

- reprogramming of the Defence Capability Program (DCP), reprioritisation of lower priority initiatives and reprogramming of facilities program (primarily Single Leap 2) to better align its cash provision to the revised construction timetable ($436.1 million);

- existing capability projects ($402.3 million); and

- an amount of $73.5 million 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) There was no reprogramming in the 2009-10 budget.

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

Capital Investment reprogramming was undertaken in the 2011-12 budget as shown in the Portfolio Budget Statements 2011-12 (Page 28, Table 11: Defence 2011-12 Budget Measures and Other Budget Adjustments).

(4) (a) and (b). As per Annex A.

(5) The total Major Capital Investment Program is $5,128.6 million in 2011-12 and $16,015.6 million over the 12-13 to 14-15 forward estimates period (refer Table 14 of the Portfolio Budget Statements 2011-12). The amounts in each year of the Major Capital Investment Program is not managed on a percentage increase basis but rather reflects the cash flow required to support the delivery of particular projects. This may or may not be a linear relationship.

(6) Significant Defence Capability Plan (DCP) projects in development for consideration by Government were provided on pages 90 to 92, tables 44 and 45 of the Portfolio Budget Statements 2011-12. Updated projects that have been approved are provided on page 63, tables 39 and 40 of the Portfolio Additional Estimates Statements 2011-12. The DCP and its associated regular updates are available through the Defence website (refer http://www.defence.gov.au/dmo/id/dcp/dcp.cfm )

(7) (a) and (b) As shown on page 28, table 11 of the Portfolio Budget Statements 2011-12, the following programs have been absorbed within Defence's existing operating budgets in 2011-12:

- National Security—Baghdad embassy. Defence will absorb costs associated with the final transition to civilian security arrangements;

- Coastal surveillance; and

- RAAF base Williamtown—Improving aircraft noise management.

The total amount to be absorbed by the Department of Defence for Operations and Enhanced Force Protection Capabilities in 2011-12 is $367.9 million as shown on page 32, Table 13 of the Portfolio Budget Statements 2011-12. The absorbed funding for Enhanced Force Protection Capabilities will predominantly be funded from Defence's existing capital investment program.

(8) The Strategic Reform Program (SRP) 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) (a) and (b) 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 per cent 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 (WSSR) and Non Equipment Procurement Streams. The total workforce growth is 1,416 (Civilianisation 535 and Contractor Conversions 881) across the decade realizing approximately $1 billion 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 Full Time Equivalent (FTE), 5 FTE associated with Australian Defence Force (ADF) Gap Year reductions and 0.7 per cent 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 Average Funded Strength (AFS) Efficiency savings, civilianisation of 535 positions, 239 AFS associated with ADF Gap Year reductions and 455 AFS for 0.7 per cent Productivity savings. Further savings of up to 38 AFS associated with Logistics Stream reform are yet to be finalised.