Turning hype into defence gains

Acting Prime Minister Richard Marles and Defence Industry Minister Pat Conroy used a lot of hype on Monday announcing what they termed the “biggest reform to the defence organisation in 50 years”. They heightened the drama with news that the Australian Defence Force was monitoring a Chinese People’s Liberation Army task group in the Philippine Sea.

It will continue to do so “particularly until we know that they are not coming in the vicinity of Australia”, Mr Marles said. The ADF did “not have a sense of where (the task group) is going”, and he refused to “get into hypotheticals” about whether the flotilla might circumnavigate Australia as other Chinese ships did earlier in the year.

It was worrying, in view of China’s regional aggression and the Australian Strategic Policy Institute’s new Critical Technology Tracker finding that China is leading the US in high-impact research across 66 of 74 advanced tech fields, as Ben Packham reported on Monday. As ASPI executive director Justin Bassi told The Australian, the West has never had a strategic adversary that was so technologically dominant.

In the context of the wider strategic picture, the Albanese government has far to go to bring Australia’s defences up to the level current circumstances warrant. Reshuffling the chairs at the top of the ADF will not suffice, which was the impression Mr Marles and Mr Conroy created.

Their objective is important – reforming the Defence Department to bring about a “much bigger bang for buck for the defence spend”, including the $70bn lift in defence spending over the next decade, the largest such increase in Australia’s peacetime history. The essence of the reform is amalgamating three branches of the department under a new Defence Delivery Agency to tackle cost overruns and program delays.

It will integrate Defence’s Capability and Sustainment Group, the Guided Weapons and Explosive Ordnance Group and the Naval Shipbuilding and Sustainment Group. A national armaments director will be appointed to lead the new agency, which will report to government ministers who will control its budget. The goal was to ensure the government could deliver projects “on time and on budget”.

But as Packham writes, for two ministers fond of talking up “speed to capability”, Mr Marles’ and Mr Conroy’s new agency will take a long time to establish, until July 2027. The plan also raises an important question. Why have the ministers not grasped the nettle to take better control of procurement for the past 3½ years, using current structures and senior personnel?

These include Defence Department secretary Greg Moriarty, Chief of the Defence Force Admiral David Johnston, and the chiefs of the navy, army and air force. Over time, it is not good enough for Labor to blame the Coalition for the current problems. That said, as Mr Conroy noted, it inherited a mess in 2022, with 28 major projects running 97 years late, not helped by the turnover of six defence ministers in eight years.

The big weakness of the announcement, however, is that it excluded the most important reform of all – extra spending needed to make the AUKUS nuclear-powered submarine program work, while simultaneously building a minimal credible force across other capabilities.

As Greg Sheridan wrote in October, Dennis Richardson, a former head of the Defence Department and the man chosen by Labor to guide it on elements of submarine policy, says Australia must spend significantly more than 3 per cent of GDP on defence to implement AUKUS and maintain its defence force. Angus Houston, whom the government chose to conduct its Defence Strategic Review, also argues defence spending needs to be 3 per cent of GDP. It is currently just over 2 per cent.

The next few years will tell if the anticipated gains materialise. Mr Marles flagged his reform agenda six months ago, announcing “everything is on the table”. The rumours have flown thick and fast since then, with as many as 40 officers and civilian managers tipped to depart through natural attrition, and up to 30 per cent of senior staff officers and program directors axed.

The reality looks more like a sheep in wolf’s clothing. Mr Marles denies the amalgamation will result in job cuts: “It is the same group of people who are working these three groups that will form part of the defence delivery group from July next year.”

Mr Conroy says Labor got rid of “a serious number of contractors and consultants”, but added “500 highly skilled public servants in these three groups”. He promises the “historic reforms” will “deliver with speed the capability to the men and women of the ADF”. But will a reorganisation and 500 extra public servants really bring about a transformation? It remains to be seen if it makes the nation more secure.