Defence Update — Govt Defence Priorities

One encouraging sign is that the five years retention bonus introduced for experienced air traffic controllers (ATCs), who were steadily being attracted by better paid civilian ATC jobs, seems to be having a positive effect.

During a recent briefing for members of the Australian Defence Correspondents’ Association, Mr McLachlan said he is looking to Bronwyn Bishop “to really make some major recommendations in the personnel areas because we have some real problems”.

Since her appointment in March, Mrs Bishop has been extremely active in discussing personnel issues face to face at bases around Australia. Apart from that, the new Government has indicated that important recommendations set out in the Glenn Review of personnel issues late last year will be implemented.

Mr McLachlan said Mrs Bishop had the day-to-day responsibility for personnel issues as she did with defence industry and science. “… if we are going to make any major changes, for example, how we pay people, how we excite them enough to stay for years longer than otherwise, then I would get involved,” he said.

“But at the point of recommendation from her. So if we are going to make major changes in personnel, science and industry, then obviously I have to be involved because I have the overall responsibility, and we understand that absolutely,” the Minister added.

However, he added that dealing with personnel issues is about more than just money. “Defence personnel want to feel that they’re wanted, that they’re needed and that they’ve got exciting things to do,” he said.

“When we look at submariners, the comparison between living in a very small hull and general life is a much greater separation than it was before.

“For example pilots, and I know we’re just looking at the top end, but we pay pilots about as well or more than the commercial pilots roughly up to about the age of 25 or 26,” Mr McLachlan said.

“At that point (it changes), with us going one way and the commercial airlines another. Now we have to look at a return of service arrangement that encourages, and if possible keeps our pilots until they are at least 32. Then we’d get the best from them, and the commercial airlines could have the best after that.

“That’s going to cost us money, but to clarify that, it isn’t all money. It’s to do with whether people feel they are rewarded for what they went in there for in the first place.”

The Minister said another matter being examined was whether more skilled ADF people might be able to serve with UN missions overseas and therefore increase the satisfaction level. He added that it would be expensive to do so, but that he wanted to make sure ADF personnel were not frustrated.

Personnel issues, delays in some important projects like the new Collins Class submarines and JORN (the Jindalee Operational Radar Network), overseas trips to Indonesia and the USA in late June, and the annual Australian-United States Ministerial discussions (AUSMIN) in Sydney in late July, were among the topics canvassed by Mr McLachlan or in answers to questions.

He also reiterated his remarks to a recent regional security conference in Canberra on the new Liberal-National Coalition Government’s defence priorities.

These include holding the line on annual budget spending and forward estimates to around the present $10 billion a year for the next three years. However, it is planned to make administrative savings in the Defence Department of about $125 million a year over the next three years so that this money can be put towards increasing the ADF’s combat capability. Both were Coalition election campaign promises.

Mr McLachlan also restated his belief that in the past there has been too much emphasis on the fact that the defence of Australia finishes at the shoreline. He said it is the security of the whole Asia-Pacific region that would leave Australia in a peaceful state.

“To that extent we need to give the ADF more mobility and to increase our combat power on the battlefield wherever that might be,” he said. He also said the Coalition Government wanted to improve alliance arrangements with the United States, and with the nations in Asia.

The Minister admitted to some annoyance at finding out about what he called unsatisfactory contractual arrangements on several projects. One is that the secondhand US Navy LSTs purchased to close a capability gap in Navy training and ADF seaborne helicopter support require an unexpected cost of $23 million to deal with rust problems, plus further funds for habitability and other improvements. But he fully supports the capability need.

Further, due to combat software development and integration problems, the first Collins submarine, which is due to be commissioned in late July, is not expected to become fully operational until late 1998, two years behind schedule.

“We’ve expressed some reservations about the overrun of time, not cost, because it’s a fixed price contract, in the Collins project, and the possibility that the combat software wouldn’t come together,” the Minister said. However, Mr McLachlan was impressed when he recently went to sea in South Australian waters for 17 hours on the first Collins. He acknowledges that when it all comes together, the six submarines on order should represent major advances in conventional submarine technology in the world.

“I thought the Collins submarine looked to be a wonderful piece of machinery, and I’m told that all sorts of people – Americans and others who have visited – are extremely impressed with the way it has all come together,” Mr McLachlan added.

He also said the Government would not be making a decision on whether to order a further two submarines (to a total of eight) for another year. He expressed the hope that other countries might buy submarines from the Australian Submarine Corporation (ASC), and therefore it is important to get the project running properly.

If anything, he is somewhat more concerned that the revolutionary JORN, which also is leading edge technology, is unlikely to be fully operational until about the end of the decade. Such a delay would mean it would be about three years behind the original schedule.

The Jindalee project seeks to provide over-the-horizon radar surveillance over vast distances – out into what is called the northern sea-air gap – from two transmitting and receiving sites, one in southern Western Australia and one in central western Queensland.

At the briefing, the Defence Minister revealed he remained extremely unhappy with the project and had called for an urgent report by the Secretary of Defence (Mr Tony Ayers) on the project.

“It’s most unsatisfactory,” Mr McLachlan said. “I’ve had a number of detailed briefings. The contract is worth about $1.1 billion, and it’s three years late already.

“I have to say this is a pretty unsatisfactory arrangement. Admittedly, like the Collins project, it is right at the front end of technology and difficult. But we can’t keep on having projects that are over budget or are late.”

The Minister ruled out the prospect of subsidising defence exports, saying the best level of support for defence exports is to have a competitive Australia. “Usually this will be through joint venture arrangements which win contracts because they are internationally competitive which produce results which attract other people to buy (their products),” he said.

“We will do everything we can to encourage Australian defence industry, but the best way to pick winners is to let the country be a winner,” Mr McLachlan said. “In other words it means getting our cost structures right and delivering on time. I’m optimistic we’re coming to that.”