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Chapter 2 - Departmental overview


Purposes

Purposes are defined in the Public Governance, Performance and Accountability Act 2013 (PGPA Act) as ‘the objectives, functions or role’ of an entity.

Defence’s primary role is to protect and advance Australia’s strategic interests through the provision of military capabilities, to promote security and stability, and to provide support for the Australian community and civilian authorities as directed by Government.

In the 2016–17 Defence Corporate Plan, the Defence purposes were revised from 10 in the previous year’s plan to a focus on three core functions:

  1. Provide advice to Government
  2. Deliver and sustain Defence capability and conduct operations
  3. Develop the future capability Defence needs to conduct operations.

Further information on the three Defence purposes is included in the 2016–17 Defence Corporate Plan, which is available at www.defence.gov.au/publications/corporateplan. Defence’s performance in achieving its purposes during the 2016–17 reporting period is described in Chapter 3—Annual performance statements.

Strategic direction

The Government expects Defence to be able to defend Australia and its national interests, to play an active role in contributing to regional security and stability, and to contribute to coalition operations around the world where our interests are engaged. Delivering on these requirements requires the strong, unified and integrated One Defence organisation being created through implementation of the First Principles Review recommendations, which will continue into 2017–18.

Through the 2016 Defence White Paper, the Government has identified Australia’s strategic defence interests as a secure and resilient Australia; a secure near region, encompassing maritime South-East Asia and the South Pacific; and a stable Indo-Pacific region and a rules-based global order that supports our interests. Securing these interests will require Australia to build on its strong network of bilateral and multilateral relationships. Through regular dialogue and practical cooperation, Defence is strengthening its engagement with partners to support shared responses to shared challenges.

This engagement will be supported by the Government’s commitment to stable and sustainable funding growth to invest in a more potent and capable defence force. Defence expenditure will be increased to 2 per cent of GDP by 2020–21, equating to $34.6 billion in 2017–18 and $150.6 billion over the forward estimates.

Defence will continue to build its strategic centre to strengthen accountability and top-level decision-making and improve policy formulation and the quality of advice provided to the Government. The strategic centre sets the performance requirements for Defence, provides the resources to the Groups and Services to operate, and monitors and measures performance to ensure Defence delivers on Government policy direction effectively and efficiently.

Defence portfolio structure

As at 30 June 2017, the Defence portfolio is supported by three ministers:

  • Senator the Hon Marise Payne as Minister for Defence
  • the Hon Christopher Pyne MP as Minister for Defence Industry
  • the Hon Dan Tehan MP as Minister for Defence Personnel.

In addition to the Department of Defence and the Australian Defence Force, the Defence portfolio consists of some smaller entities, including a number of statutory offices, trusts and companies. Legislation that established the services trusts and companies in the Defence portfolio are the Services Trust Fund Act 1947 and the Royal Australian Air Force Veterans’ Residences Act 1953, as well as the Corporations Act 2001.

The portfolio also contains the Department of Veterans’ Affairs and associated bodies, as designated in the Administrative Arrangements Order.

Figure 2.1: Defence portfolio structure as at 30 June 2017.

Figure 2.1: Defence portfolio structure as at 30 June 2017

Notes:

  1. Mr Greg Moriarty was appointed as the Secretary of Defence with effect from 4 September 2017.
  2. Appointments made under the Defence Force Discipline Act 1982.

Changes in ministerial responsibilities

On 19 July 2016, a new ministry was sworn in following the federal election held on 2 July 2016. Senator the Hon Marise Payne continued as the Minister for Defence. New ministerial appointments were made, with the Hon Christopher Pyne MP sworn in as the Minister for Defence Industry and the Hon Dan Tehan MP sworn in as the Minister for Defence Personnel. These appointments replaced the roles of the Assistant Minister for Defence, held by the Hon Michael McCormack MP, and the Minister for Defence Materiel, held by the Hon Dan Tehan MP.

The Ministers and their portfolio responsibilities are as follows:

Senator the Hon Marise Payne, Minister for Defence

  • Strategic policy
  • Australian Defence Force operations
  • International engagement
  • Budget
  • Defence White Paper implementation
  • Force structure
  • Development of capability requirements
  • Capability/cost trade-off during capability life cycle
  • Intelligence and security
  • Information and communications technology
  • Science and technology policy and support to operations

The Hon Christopher Pyne MP, Minister for Defence Industry

  • Delivery of capability acquisition and sustainment projects
  • Development of Australian industry involvement during capability life cycle
  • Delivery of defence industry agenda
  • Support for, and development of, Australian defence industry
  • Encouragement of Australian defence industry involvement in global supply chains
  • Implementation of Naval Shipbuilding Plan
  • Centre for Defence Industry Capability
  • Defence Innovation Hub
  • Science and technology engagement with Australian industry
  • Next Generation Technologies Fund

The Hon Dan Tehan MP, Minister for Defence Personnel

  • Estate
  • Garrison and personnel support
  • Estate and equipment disposals
  • Military justice
  • Honours and awards
  • Australian Defence Force Cadets
  • Reserves
  • Parliamentary exchange program

These ministerial responsibilities are correct as at 30 June 2017. Details of the current allocation of portfolio responsibilities for Defence are available online at www.minister.defence.gov.au.

Outcomes and programs

Defence’s annual Portfolio Budget Statements (PBS) detail the outcomes and programs structures for the Defence portfolio. Within this framework, the outcome is the intended result, impact or consequence of our actions. We work towards achieving our outcomes through undertaking activities and delivering results for each program.

Figure 2.2 shows Defence’s three outcomes for 2016–17, together with the related programs. The PBS describe the performance criteria and targets to be used in assessing and monitoring the performance of Defence in achieving government outcomes.

Figure 2.2: Defence’s outcomes and programs, 2016–17

Figure 2.2: Defence’s outcomes and programs, 2016–17

Note: Defence outcomes and programs have been realigned and renumbered in the Defence Portfolio Budget Statements 2017–18 to reflect the strategic intent of the 2016 Defence White Paper, the First Principles Review, and the purposes in the 2017–18 Defence Corporate Plan. This annual report covers performance against the outcomes and programs described in the Portfolio Budget Statements and Portfolio Additional Estimates Statements for 2016–17.

Organisational structure

The Secretary of the Department of Defence and the Chief of the Defence Force jointly manage the organisation as a diarchy. The term ‘diarchy’ reflects the individual and shared responsibilities and accountabilities of the Secretary and the Chief of the Defence Force in ensuring that Defence meets Australian Government requirements. The manner in which the diarchy operates is further set out in directions given to the Secretary and the Chief of the Defence Force by the Minister for Defence.

Implementation of the First Principles Review, Creating One Defence, necessitated changes to the accountabilities, structures, systems and processes that build and operate the required organisational capacity. It also introduced the One Defence business model, which focuses Defence’s organisational capacity on achieving Government-directed outcomes. The business model has three key features:

  1. A stronger strategic centre able to provide clear direction, contestability of decision-making, as well as enhanced control of resources and monitoring of organisational performance
  2. An end-to-end approach for capability development
  3. Enablers that are integrated and customer-centric with greater use of cross-functional processes, particularly in regional locations.

Figure 2.3 shows the elements and relationships of Defence’s organisational structure as at 30 June 2017.

Figure 2.3: Defence organisational structure as at 30 June 2017

Figure 2.3: Defence organisational structure as at 30 June 2017

Note: This organisational chart is correct as at 30 June 2017. For a more current view, visit www.defence.gov.au. Biographies and high-resolution images of key Defence leaders and senior managers are available at the Defence Leaders site, www.defence.gov.au/leaders.

Changes in senior leadership

The following changes in senior leadership occurred during 2016–17:

  • Mr Stephen Meekin, the previous Deputy Secretary Intelligence and Security, retired from the Australian Public Service on 13 July 2016.
  • Ms Rebecca Skinner, the previous Deputy Secretary Defence People, was appointed Deputy Secretary Strategic Policy and Intelligence on 12 September 2016.
  • Mr Peter Baxter, the previous Deputy Secretary Strategic Policy and Intelligence, retired from the Australian Public Service on 14 November 2016.
  • Ms Roxanne Kelley was promoted and appointed Deputy Secretary Defence People on 16 November 2016.
  • Mr Dennis Richardson, the previous Secretary of Defence, retired from the Australian Public Service on 12 May 2017. Mr Brendan Sargeant was appointed as Acting Secretary on 13 May 2017.

Financial summary

Defence has a sound financial position, with sufficient cash reserves to fund its debts as and when they fall due. Defence’s departmental net cash spend was $31.9 billion in 2016–17. This was an underspend of $30.5 million when compared to the revised estimate in the Defence Portfolio Budget Statements 2017–18.

Defence received an unqualified audit report on the 2016–17 financial statements from the Australian National Audit Office. These statements are in Chapter 11—Financial statements [PDF-820KB].

See Chapter 4—Financial performance for a financial overview of 2016–17.

People summary

Defence’s workforce includes Australian Public Service (APS) employees and Australian Defence Force (ADF) members of the Navy, Army and Air Force.

The ADF’s actual funded strength at 30 June 2017 was 58,612, compared to 58,578 at 30 June 2016. The APS actual full-time equivalent workforce at 30 June 2017 was 17,308, compared to 17,423 at 30 June 2016.

Detailed information on Defence’s workforce is provided in Chapter 7—Strategic workforce management.

Cyber security capability

Defence continued to develop its cyber security capabilities in 2016–17. Key achievements during the year included:

  • enhancement of our cyber security support to military operations and exercises through the establishment of a dedicated military capability manager for joint cyber capabilities to drive workforce and technology improvements
  • enhancement of our use of cyber threat intelligence to guide our cyber security activities through the introduction of automated tools and a more highly skilled workforce that better understands threats and their appropriate mitigations
  • enhancement of our cyber threat and security awareness and education activities to ensure a more cyber security–aware workforce, reducing the risk of cyber threats within Defence
  • growing the numbers and skills of our cyber security workforce through a targeted recruitment and training program, allowing us to scale our capability to new and emerging threats and to protect our military and corporate systems
  • delivery of information and communications technology (ICT) infrastructure upgrades that enhance security, including newly deployed and strategic ICT systems and networks, ensuring cyber resilience across Defence’s single information environment and better preventing or mitigating cyber threats.

Defence Cooperation Program

The Defence Cooperation Program (DCP) has made a significant contribution to Australia’s international defence engagement and its strategic interests since the 1960s. In line with those interests, the DCP priority countries and regions include Papua New Guinea, Indonesia, Timor-Leste, the South-West Pacific, South-East Asia, Pakistan and the Middle East. The program’s objective is to maximise Australia’s security through developing close and enduring links with partners that support their capacity to protect their sovereignty, work effectively with the ADF and contribute to regional security.

To achieve its objectives, the DCP suite of activities includes training, personnel exchanges, capacity building, military secondments, strategic dialogues, subject matter expert exchanges, infrastructure support, exercises and operations. These activities focus on enhancing the ADF’s operational familiarity with different environments and on building partner capacity in humanitarian assistance and disaster relief, peacekeeping, counterterrorism, maritime security, military governance and professionalism.

Pacific Patrol Boat and Pacific Maritime Security programs

A key element of the DCP, and the centrepiece of Australia’s defence engagement in the South Pacific, is the Pacific Patrol Boat Program, through which Australia has provided 22 patrol boats (with associated advisory personnel, training support and maintenance assistance) to 12 countries. The program enables Pacific navies and police maritime wings and is designed to help Pacific Island countries improve their ability to independently monitor and protect their maritime zones. Under the follow-on Pacific Maritime Security Program, Australia is replacing the fleet with new steel-hulled vessels. Austal Ships Pty Ltd was selected to construct up to 21 replacement patrol vessels in Australia, for gifting to Pacific Island nations from 2018. The Pacific Maritime Security Program will also provide contracted civilian aerial surveillance and enhanced regional coordination support to Pacific Island countries.

Papua New Guinea

In 2016–17, our Defence Cooperation Program with Papua New Guinea (PNG) focused on building the Papua New Guinea Defence Force’s major event security capability in the lead-up to PNG’s hosting of the Asia–Pacific Economic Cooperation summit in 2018. The program also built military and professional skills through the provision of approximately 300 training courses to PNG defence organisation personnel. Our support for infrastructure rehabilitation increased in 2016–17, and included a project to develop the communications centre at HMPNGS Tarangau, where PNG’s maritime assets are based.

Women, Peace and Security seminar

The DCP funded a Women, Peace and Security seminar in December 2016. The Australian Department of Defence brought together female officers with operational experience from the Australian and Indonesian defence organisations for a workshop on having a gender perspective on peacekeeping operations. As Australia and Indonesia will be co-chairing the Experts Working Group on Peacekeeping Operations—under the auspices of the Association of Southeast Asian Nations (ASEAN) Defence Ministers’ Meeting – Plus—for the next three years, seminar participants were tasked with making recommendations for how to advance the women, peace and security agenda during our co-chairing period. The seminar was very successful, with most of the participants’ recommendations being accepted by the Australian and Indonesian co-chairs of the experts working group.

Timor-Leste

Defence’s longstanding cooperation with Timor-Leste continued to build core skills and competencies throughout 2016–17, most notably through the ongoing success of our extensive English language training program. Australia also led the largest yet iteration of the multinational engineering Exercise Hari’i Hamutuk in October 2016, which saw over 110 personnel from four nations (Australia, Timor-Leste, the United States and Japan) working together to refurbish and improve infrastructure at various military establishments across Timor-Leste.

Middle East

Australia has longstanding economic and security interests in supporting the stability and security of the Middle East region. Among other lines of effort in support of those interests, Defence maintains cooperation programs with a number of countries in the Middle East, including Egypt, Lebanon and Jordan. The major focus of these programs is the provision of training and education to members of the armed forces of these nations. In 2016–17, DCP activities included the offering of short-term courses on a variety of topics, including rules of engagement, maritime operations, law and peace operations, as well as longer-duration positions at the Australian Command and Staff College, and the Centre for Defence and Strategic Studies at the Australian Defence College. In addition to training and education, as part of our DCP with Jordan, Defence also conducted an annual dialogue with the Jordanian Armed Forces to discuss cooperation and regional dynamics.