Key changes set for Defence after ‘biggest reform in 50 years’
Richard Marles announced that three key Defence delivery branches would be mothballed and merged into a single agency. Here’s what it means.
Defence Minister Richard Marles on Monday announced the “biggest reform in 50 years” for the Department of Defence, delivering sweeping changes in an effort to combat cost overruns and program delays.
The overhaul, designed to give taxpayers a “much bigger bang for buck for the defence spend”, comes after the federal government committed to increasing the country’s defence spend by about $70bn over the next decade.
What do the changes entail?
The primary aim of Labor’s overhaul is to amalgamate three struggling defence capability delivery groups under a brand new agency, set to report directly to the Defence Minister.
Under the move, Defence’s Capability, Acquisition and Sustainment Group, the Guided Weapons and Explosive Ordnance Group and the Naval Shipbuilding and Sustainment Group will fall under a new Defence Delivery Agency.
The government is set to appoint a national armaments director, who will lead the new agency, and whose responsibilities will include providing advice on acquisition strategies and the delivery of projects.
Though the government said the reforms would not result in job cuts, it is unclear how the structure of senior management in the new agency would include all three of the current branch heads.
“We are not seeing job cuts here, 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 Marles said.
Reports have been swirling in Canberra that up to 30 per cent of senior staff officers and program directors could be axed as part of the changes.
Why the change?
In a joint statement, Mr Marles and Defence Industry Minister Pat Conroy said the move would allow ministers control over the agency’s budget and would enable “co-ordinated and holistic delivery of defence capability and growing our sovereign defence industrial base”.
The department has been plagued by cost blowouts and project overruns but Mr Marles stopped short of admitting that defence funding had been wasted, instead suggesting the government “could always do better”.
Mr Conroy flagged that there were 28 projects running a combined 97 years over time when Labor took office.
The move comes six months after Mr Marles flagged a sweeping reform agenda, with everything on the table.
The government has also committed to increase defence spending to the tune of $70bn over the next decade, with Mr Marles suggesting the government “felt an obligation to ensure that money is spent in the best possible way”.
“We need to ensure going forward, as there is more money being spent in the Defence portfolio, it’s being done in a cost-effective way but that programs are being delivered on time and on budget,” he said.
“It puts a focus on delivery and will ensure that it is much more sharp in the way in which it is undertaken.
“It will mean that advice comes to government much more early in the process about the challenges that are facing any particular program, any particular project, so that we can ensure those projects are delivered on time and on budget.”
When will the overhaul be implemented?
Mr Marles confirmed the changes would come in two stages, with the three branches set to be integrated into the Defence Delivery Agency on July 1, which will then be turned into an independent, autonomous agency a year later.
He flagged that the search for the position of National Armaments Director would begin “shortly”.
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