Speech – The Political Cycle and Long Term Commitments – Australian Defence Force Academy

The political cycle and long-term commitments

‘The Long Road: The future of indigenous capacity development’ conference

Australian Defence Force Academy, Canberra, May 4, 2016

***Check against Delivery***

May I thank Professor Tom Frame for the kind invitation to address this importance conference, and to commend the Australian Centre for the Study of Armed Conflict and Society, and the Defence Science and Technology Group, for sponsoring it?

This conference is the first to examine Australia’s recent experience of ‘train, advise, assist’ missions and explores the Australian Defence Force’s future role in enhancing security among partner nations with presentations from a wide range of government agencies.

The agenda is broad, ranging from our overseas engagements to building domestic support for those missions.

It is in this context that I was asked to address the issue of the political cycle and long-term commitments.

What I offer is a personal perspective, having served in the Defence portfolio for a relatively short period of time, albeit at a time of considerable activity, reform and forward thinking. I acknowledge the many people who informed my thinking, while adding the usual caveat, that these reflections are mine alone. Nor should anything I say be interpreted as a reflection on any person.

The national compact

The first responsibility of a national government is the safety and security of its citizens. This is its ongoing, primary responsibility. It involves years- and decades-long considerations and commitments that run beyond the short political and electoral cycles. Our involvement in Afghanistan – which is now some 15 years in length, and our longest ever military engagement – is an example.

A series of long-term challenges face us today: the spread of Islamist terrorism through our region; the rise of an increasingly assertive China and the interplay of the great powers, America, China and Russia; and the risk of a failed nation state are all threats to peace and stability.

This is why we planned the recent Defence White Paper for the next two decades. It recognised the growing importance of the Indo-Pacific as the major trading region of the world, and the concomitant need for freedom of transit on the waters and in the skies.

Central to the primary responsibility to defend the nation – for all governments no matter their political persuasion – is a compact with Defence. The intention is to establish a long-term basis for action that is less susceptible to short-term political and economic disturbances.

This compact is the proper alignment between the Government’s strategic aspiration with the tasks Government asks Defence to undertake. Completing the ‘trinity’ of this compact is the resources Defence requires to develop the capabilities to perform the tasks.

This compact has not always been upheld with aspirations not matched with resources.

This compact, which differs from that formally operating in the UK, lies at the heart of the latest Defence White Paper.

It was also central to the First Principles Review, and the Competitive Evaluation Processes which I initiated, and will discuss shortly.

Just as Defence should be able to rely on the Government of the day for the provision of resources to meet national security aspirations, tasks and projects, the Government, on behalf of the citizens, should expect that Defence will operate in an efficient, timely and business-like manner.

The commitment to return Defence expenditure to over 2 per cent of GDP, and the 20 year outlook in the White Paper, including a costed 10 year acquisition plan, reflected our subscription to the compact.

Having established the compact, it is critical that future governments, regardless of political persuasion, adhere to it.

The quid pro quo of this response by Government is the efficiency and performance of Defence, which brings me to the First Principles Review.

First Principles Review

In the report of the First Principles Review of Defence, Creating One Defence,  the Review Team stated:

“In seeking to determine what has prevented Defence from changing, we noted three root causes which over the past decade have created complacency and inertia:

The high operational tempo and increasing national security demands over the past decade have demanded high levels of the senior leadership’s time and attention;

Budget uncertainty with $18.2 billion removed from the Defence budget from 2009–10 onwards which has led to reactive planning, deferred military capability and a hollowing out of enablers such as estate and information and communications technology; and

Leadership churn from 1998 to the present resulting in nine ministers with an average tenure of two years, six Secretaries with an average tenure of two and a half years and five Chiefs of the Defence Force with an average tenure of four years.”

The Team continued: “We note the Government has acknowledged the budget uncertainty issue and that it aspires to increase Defence spending to two per cent of Gross Domestic Product. We also note that the life of this review extends beyond the current economic cycle. It is therefore prudent to assume that Defence expenditure may again come under pressure.

“In any event, the current waste and inefficiency will continue if Defence remains in its current form, as it is neither equipped nor organised to make efficient use of whatever funding levels are available to it.

“Leadership churn and budget uncertainty is the critical root causes of the organisation’s complacency. The frequent turnover in Ministers and Secretaries, in particular, does not enable effective leadership of change. The state of the organisation is symptomatic of one that has not been materially reshaped for over a decade and has been allowed to drift.”

Since 1996, there have now been 11 Defence Ministers, not to mention numerous assistant ministers and parliamentary secretaries. In the past decade alone, there have been five different governments and seven different ministers. When you consider the shifting composition of the National Security Committee, the impact of change is compounded.

This churn exacerbates the impact of the short, three year political cycle which governments of all hues face at the Commonwealth level in Australia.

The reasons for the churn are multiple, but they need to be addressed. Otherwise, long-term commitments will always be in danger of the vagaries of the electoral cycle. In the past three decades, the period of 1984 – 1996 was noteworthy, with just two defence ministers in 12 years. Regardless of which party is in government, this level of stability is a critical component of long-term decision-making. It effects not only resourcing, but operational commitments.

The Government accepted the First Principles Review as a road map for Defence reform for the next five years.

Despite Defence’s outstanding operational record, it was clear that there needed to be a better balance between operational excellence and organisational effectiveness.

The First Principles Review of Defence delivered on a Coalition election commitment to ensure that Defence is appropriately structured and organised, and has the right business practices in place to support the Australian Defence Force in the 21st Century.

These reforms are the biggest since the Howard Government’s Defence Efficiency Review in 1997 and the Tange reforms of the early 1970s.

The Review found a proliferation of structures, processes and systems with unclear accountabilities, which in turn cause institutionalised waste, delayed decisions, flawed execution, duplication, over-escalation of issues for decision and low engagement levels amongst employees in parts of the organisation.

At its most basic, the Review found that Defence must move from the then inefficient, federated approach into a single, integrated organisation that delivers enhanced joint capability.

Implementation of the Review formally began on 1 July last year, and is now well-advanced.

For the Government to fulfil its commitments, these reforms were necessary to ensure Defence was fit for purpose and able to deliver and implement the Defence White Paper. But it’s also important to demonstrate that any additional public money invested in Defence will be well spent, especially in a fiscally constrained environment.

While the reforms are aimed at ensuring that Defence is fit for purpose in the coming years and decades, the process itself was significant.

The Review team, led by David Peever, involved a level of external scrutiny and comparison with other organisations and practices that had not occurred for decades.

It involved an alternate source of advice to me as the Minister, and to the National Security Committee. Equally importantly, I believe, was the decision to maintain the Review Team as an oversight body for the implementation phase.

The nature of the Westminster system means that ministers are not experts with years-, if not decades-long, experience in a particular field, as is the case, for example in the US system. Ministers, like all Parliamentarians, are generalists, who have to develop quickly a knowledge and understanding of a new portfolio. Some succeed, others don’t.

A successful minister needs to understand that he or she does not know what he or she does not know. “I don’t know what I don’t know,” was my oft-used comment in briefings with Defence. Equally, I would ask: “What haven’t I been told?” or “What else should I know that I don’t.”

This is critical where reform is being proposed and implemented if the sole source of advice is from the department. Aversion to change is normal; protection of vested interests is human. In 25 years in public life, I have observed that the greatest force in the political system is inertia!

Hence maintaining the oversight of the First Principles Review team was to provide a counter-balance of counsel to me as the minister. I could use it to test the advice and response from Defence and help to negate the natural aversion to change.

This approach is particularly important if there is a change of ministers and help to maintain long-term commitments.

There are parallels in this approach with my next issue, the acquisition and sustainment process.

Competitive Evaluation Process

It is not my intention this morning to address the institutional changes involving the replacement of the DMO with the new Capability Acquisition and Sustainment Group.

Instead, I wish to briefly examine one aspect which relates to the compact with Defence and long-term commitments.

As the current discussion about submarines illustrates, decisions about the acquisition of military equipment and resources have decades-long impacts. A careful balance between coming to a decision in a timely manner and having sufficient information to make the correct choice must be our aspiration.

To delay for years risks future capability and security; to make too hasty a decision risks getting it wrong with long-term, even existential, consequences.

This is why I implemented the Competitive Evaluation Process for submarines and surface ships.

A delay of another 5- 6 years for the usual tender process, on top of a previous delay of 5-6 years of indecision, risked our security in a decade’s time. Yet there had to be a process that was competitive, defensible and accurate.

Despite the criticism at the time, the Competitive Evaluation Process has demonstrated that major decisions can be made in an informed and timely manner.

However, this process does require additional safeguards. For this reason, I appointed the expert panel, headed by Professor Don Winter, the former US Secretary of Navy, to ensure that the process met probity requirements. Rather than being simply a ‘watch-dog’, the expert panel was able to act as a sounding board for all parties, including the department and the bidders.

Importantly, it provided the minister, the government and the citizens with a level of assurance about the process.

It is a process, I believe, that should be utilised with all major defence acquisitions.

Moreover, there is a strong case for maintaining the oversight of such a body throughout the acquisition phase, as a source of complementary advice and re-assurance.

I also suggest that there is a stronger role for the Parliament in the process. While the Foreign Affairs, Defence and Trade Committee can examine various Defence issues, there does not appear to be the level of scrutiny in Australia that exists, for example, in the US Congress. This could help to overcome the short-term vagaries of the political and electoral cycle.

Having the appropriate processes in place can also mitigate the political cycles that democracy entails. For example, the Defence White Paper commenced under my predecessor, was all but completed under me, and presented by my successor. The First Principles Review was also initiated by my predecessor and agreed to by me, and implemented by both myself and my successor. The Competitive Evaluation Process was initiated when I was minister and the results determined under my successor.

Conclusion

At the beginning of this paper, I outlined a number of security and defence issues facing Australia. They are ongoing challenges. Any military involvement, as we have seen in Afghanistan and Iraq is likely to be prolonged. There is a natural concern in defence that years-long ‘train, advise and assist’ missions might be subject to the vagaries of the domestic political cycle.

As part of the national compact I have spoken about, it is incumbent on the government and parliament of the day to ensure that the ADF has certainty about our national security and defence aspirations, and is provided the necessary long-term commitments where military engagement occurs.

As parliamentarians, we owe that certainty to the men and women who defend this country.

Ends.