Budget 2014 will see major cuts to Defence bureaucracy

THE Federal Budget will see the start of major cuts to the defence bureaucracy as the first steps are taken towards a Japanese model.

THE Federal Budget will see the start of major cuts to the defence bureaucracy as the first steps are taken towards a Japanese model.

Australia will base its future military to civilian staff ratio more closely on the Japan Self Defence Force — where one civilian is employed to support 10 troops.

Currently, we employ one bureaucrat for every 2.5 people in uniform.

It is understood the government does not believe 10 to one is a viable figure for Australia, but it is clear the existing ratio is no longer acceptable.

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A ratio of three to one or about 19,000 bureaucrats is seen as a reasonable first step.

Experts have warned the raw figures might be misleading because many Japanese military personnel are employed in administrative jobs at even higher cost.

Defence is being largely quarantined from the Abbott Government’s savage deficit busting budget as it stays on track to boost defence spending to two per cent of national economic activity. However, there will be cuts in areas including the civilian workforce, generous superannuation benefits and the costly employment packages of so-called ‘star’ ranked senior military officers.

Australia has the highest per capita ratio of brigadier and generals of any first world defence force and the new Defence Chief, Air Marshal Mark Binskin, who holds a Harvard MBA and will take over in July, will be immediately tasked with cutting the cost of the top brass.

The Defence Material Organisation, which employs about 7500 staff, will also be hit hard but many of its job losses will come in the government’s first Defence White paper due out later this year.

The National Commission of Audit recommended that the Military Superannuation and Benefits Scheme should be replaced by something cheaper.

The scheme is a defined benefit scheme, paying a percentage of final salary as a fortnightly pension for life and it is boosted twice a year in line with the Consumer Price Index.

Employer contributions are generous, rising to 28 per cent of final salary after 20 years of service and payable as a lump sum on retirement compared with 9.25 per cent for other workers.

The commission also identified the top-heavy military and civilian workforces as areas ripe for cutting.

Since 2000 the senior executive has boomed by 63 per cent, from 103 to 168, and the number of star-ranked officers has jumped by 58 per cent from 120 to 190.

During the past 18 years the number of three-star officers — Lieutenant Generals, Vice-Admirals and Air Marshals — has expanded from four to seven and the number of deputy secretaries from four to 14.

Other areas of government with indirect links to Defence, such as foreign aid, will be hit with big funding cuts on Tuesday.

It is understood that the government’s rapidly growing network of domestic and overseas spies and the costly diplomatic service will also be hit as the government shares the anti-deficit pain.

JAPAN SELF DEFENCE FORCE

Military staff = 248,000

Civilian staff = 23,000

AUSTRALIAN DEFENCE FORCE

Military staff = 58,000

Civilian staff = 23,000

Originally published as Budget 2014 will see major cuts to Defence bureaucracy