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Chapter 3 - Annual performance statements


Annual performance statements are a new requirement of the Public Governance, Performance and Accountability Act 2013. The annual performance statements replace the section on performance included in previous annual reports. The statements provide an assessment of Defence’s performance in achieving the intended results described in the 2015–16 Defence Corporate Plan and the key performance indicators listed in the Portfolio Budget Statements (PBS) and Portfolio Additional Estimates Statements (PAES) for 2015–16.

Statement of preparation

I, as the accountable authority of the Department of Defence, present the 2015–16 annual performance statements of the Department of Defence, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). In my opinion, these annual performance statements are based on properly maintained records, accurately reflect the performance of the entity, and comply with subsection 39(2) of the PGPA Act.

Dennis Richardson's signature

Dennis Richardson AO
Secretary of the Department of Defence
28 October 2016

Performance overview

In 2015–16, Defence worked to deliver three outcomes for Government:

We worked to achieve these outcomes through the fulfilment of 10 purposes described in the 2015–16 Defence Corporate Plan:

Overall, Defence performed well in 2015–16, delivering its stated business outputs. Defence continues to conduct operations in support of achieving the Government’s national strategic objectives, while transforming the organisation through implementation of the First Principles Review. Defence delivered a range of new policy guidance with the publication of the 2016 Defence White Paper and its associated documents—the Integrated Investment Program and the Defence Industry Policy Statement.

The tempo within Defence is increasing as the organisation implements the changes recommended by the First Principles Review. This level of change to structures and business processes, coupled with the release of the 2016 Defence White Paper and in particular the Integrated Investment Program, is placing further pressure on the key risk area—the skills and capacity of the workforce. Management of the total workforce will be a focus for Defence in 2016–17, with the implementation of the Defence Strategic Workforce Plan.

Particular highlights in 2015–16 were:

  • working with the Government to deliver an array of new policy guidance with the release of the 2016 Defence White Paper, Defence Industry Policy Statement and Integrated Investment Program.
  • the development of a Defence International Engagement Plan to support implementation of the 2016 Defence White Paper, particularly its emphasis on extending the scope and nature of our engagement with partners in our region and around the world
  • ongoing conduct of a wide range of operations in support of the Government’s national strategic objectives, including Operation Okra (Iraq), Operation Highroad (Afghanistan), Operation Resolute (border protection) and Operation Fiji Assist (recovery after Tropical Cyclone Winston)
  • Exercise Talisman Sabre, which was conducted in July 2015 in partnership with the United States. In addition to its training value, the exercise serves a certification function for formally validating the preparedness of large-scale amphibious operations capabilities for Australia and the United States
  • achieving certification of the HMAS Adelaide landing helicopter dock operating capability earlier than expected. Together with HMAS Canberra and other platforms and systems, HMAS Adelaide provides a robust amphibious operations capability
  • the first year of implementation of the recommendations of the First Principles Review, with the completion of 36 of the 75 recommendations laying the foundations for the broader changes that are required.

An assessment of how Defence performed against each purpose is provided below, and each purpose is mapped to the relevant Portfolio Budget Statements outcome.

Purpose 1—Provide advice to Government

(Outcomes 1, 2 and 3)

Defence must provide high-quality, coherent and timely policy advice to Government. As part of implementing the First Principles Review, Defence has brought policy functions together to improve the quality of advice provided to Government.

Analysis of performance against Purpose 1

In 2015–16, Defence restructured its policy and intelligence functions into one Group, as recommended by the First Principles Review. The Strategic Policy and Intelligence Group also includes contestability and industry engagement functions to provide more timely, well-considered and higher-quality advice to Government.

The release of the 2016 Defence White Paper, Defence Industry Policy Statement and Integrated Investment Program provides Defence with long-term, strategic guidance about Government requirements. Defence provided the significant policy advice that underpins the development of these documents.

Performance information against the performance criteria related to Purpose 1 is available in tables 3.1 and 3.2.

Table 3.1: Performance results for criteria relating to Purpose 1

Performance in achieving the purpose

Performance criterion

Source

Results

Government has confidence in the relevance and quality of Defence advice.

2015–16 Defence Corporate Plan, p. 6

Defence provided significant policy input and advice regarding the global security environment and Defence capability to develop the 2016 Defence White Paper, which the Government released on 25 February 2016. In addition, Defence provided advice to the Minister and National Security Committee of Cabinet on other matters. This advice is becoming more robust through internal contestability, which ensures alignment with Government requirements.

Decision makers have a deeper understanding of Australian defence and national security and are better supported in developing and deciding policy.

2015–16 Defence Corporate Plan, p. 6

The 2016 Defence White Paper and 2016–17 Budget have provided alignment between strategy, capability and resources. The development of a stronger policy function, including contestability, is critical to maintaining this alignment into the future.

Table 3.2: Performance results for criteria relating to delivering the outcomes of Purpose 1

Performance in delivering the outcomes

Performance criterion

Criterion source1

Results

Policy guidance is forward looking, timely, innovative and practical.

2015–16 PBS Program 1.1: Office of the Secretary and Chief of the Defence Force, pp. 33, 35

Achieved.

Timely, accurate and widely consulted advice provided to Government.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Timeliness and quality of advice, including Cabinet documentation, provided by the department meets requirements.

2015–16 PBS Program 1.9: Chief Operating Officer – Defence Support and Reform, p. 60

Achieved.

Note:
1. Program 1.9 in the Portfolio Budget Statements for 2015–16 referred to the Chief Operating Officer. The position title changed to Associate Secretary from 1 April 2015. All references to the Chief Operating Officer will be replaced with the Associate Secretary in 2016–17.

Purpose 2—Conduct operations

(Outcomes 1, 2 and 3)

Defence advances Australia’s strategic interests by planning for, developing and maintaining the capability to deter and defeat armed attacks on Australia or on Australian interests. This includes planning for, conducting, controlling and evaluating Defence and/or coalition contributions to Government-directed operations. These operations include those that contribute to the security of the immediate neighbourhood and those that support wider interests.

Analysis of performance against Purpose 2

Defence met Government requirements by conducting operations as directed, both ongoing and at short notice, in the near region as well as globally. This included provision of capabilities and personnel deployed to the Middle East region. The Australian Defence Force also provided support to multiple operational and humanitarian activities.

Major operational commitments focused on supporting the US-led coalition to combat Da’esh and affiliate violent extremist organisations. The Australian Defence Force also supported the North Atlantic Treaty Organisation-led mission in Afghanistan and United Nations-led missions throughout the Middle East and North African regions; border protection; increased support to the Australian Antarctic Division; and rapid deployment of humanitarian and disaster recovery assistance to Fiji.

Maritime surveillance patrols, including those conducted in support of Operation Gateway (South-East Asia), protected national interests. Operation Solania supported the enforcement of Pacific Island nations’ fisheries laws and Operation Render Safe located and disposed of explosive devices of war in Pacific Island nations.

Domestic operations focused on delivering outcomes against strategic defence objectives, including implementing a comprehensive Defence counter-terrorism framework, meeting requests for domestic disaster relief, and surveillance and interdiction operations to protect our northern approaches.

Overall, unit ready days were achieved in accordance with plans. Landing helicopter dock HMAS Adelaide contributed additional unit ready days due to earlier-than-planned certification of capability to conduct humanitarian assistance and disaster relief tasks.

There are some issues affecting preparedness performance, such as ongoing maintenance of the Armidale class patrol boat fleet and skill shortages in specialist areas; however, these have not affected Defence’s ability to meet Government-directed tasks. Work to address these issues will continue in 2016–17.

Operational planning and performance oversight was conducted with strong departmental and interagency stakeholder engagement. Interagency partnerships were enhanced through stronger involvement in major exercises, facilitated by Joint Operations Command and the Australian Civil–Military Centre.

Performance information against the performance criteria related to Purpose 2 is available in tables 3.3 and 3.4.

Table 3.3: Performance results for criteria relating to Purpose 2

Performance in achieving the purpose

Performance criterion

Source

Results

Joint effects are delivered in accordance with Government requirements.

2015–16 Defence Corporate Plan, p. 6

Joint forces were certified, deployed and sustained efficiently and effectively, and in accordance with Government timeframes.

Chief of the Defence Force preparedness levels are achieved and maintained.

2015–16 Defence Corporate Plan, p. 6

Preparedness performance in the reporting period was consistent with the operational tempo, with most capabilities meeting requirements. Some capabilities did not meet, or only partially met, requirements principally due to a higher rate of commitment and rotation of these forces. This did not impact on Defence’s overall ability to meet Government requirements in 2015–16.

Operational deployments meet the requirements of Government policy.

2015–16 Defence Corporate Plan, p. 6

Government requirements were met through the planning and conduct of directed operations and activities.

Table 3.4: Performance results for criteria relating to delivering the outcomes of Purpose 2

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Achieve levels of preparedness as directed by the Chief of the Defence Force.

2015–16 PBS Program 1.2: Navy Capabilities, p. 37

Partially achieved. The preparedness of the Armidale class patrol boat fleet was impacted by emergent work identified during the hull-strengthening program.

Generate and sustain forces to meet the Government’s operational requirements.

2015–16 PBS Program 1.2: Navy Capabilities, p. 37

Achieved.

Achieve a level of training that maintains core skills, professional standards and baseline preparedness.

2015–16 PBS Program 1.2: Navy Capabilities, p. 37

Achieved.

Provide timely, accurate and considered advice on Navy capabilities to the Government, the Chief of the Defence Force and the Secretary.

2015–16 PBS Program 1.2: Navy Capabilities, p. 37

Partially achieved. Some advice did not meet benchmark timeframes.

Achieve HydroScheme data and surveying tasking requirements to meet national hydrographic surveying and charting obligations.

2015–16 PBS Program 1.2: Navy Capabilities, p. 37

Partially achieved. HydroScheme survey days were affected by changes to training schedules, leading to an overall survey day achievement of 76 per cent.

Unit ready days

Estimate

Actual

2015–16 PAES Program 1.2: Navy Capabilities, p. 33

Achieved.

Major combatants

3,233

3,206

Minor combatants

4,186

4,054

Amphibious and afloat support

859

859

Maritime teams

2,558

2,558

Hydrographic force

3,107

3,060

Unit availability days

Estimate

Actual

2015–16 PAES Program 1.2: Navy Capabilities, p. 33

Partially achieved. Overall, the Navy achieved 96 per cent of the unit availability days target. Minor combatants achieved 90 per cent due to the requirement to undertake additional work in the Armidale class patrol boat hull-strengthening program.

Major combatants

2,935

2,889

Minor combatants

3,677

3,305

Amphibious and afloat support

785

779

Maritime teams

2,558

2,558

Hydrographic force

2,266

2,248

HydroScheme products

Estimate

Actual

2015–16 PBS Program 1.2: Navy Capabilities, p. 39

Partially achieved. Technical staff shortages and reprioritisation of chart production effort affected achievement of charting projects. The Australian Hydrographic Service office suffered significant flood damage in March 2016, which affected chart production capabilities.

Maritime safety updates

1,100

1,183

Charting projects

15

9

Nautical publications

29

29

Flying hours

Estimate

Actual

2015–16 PBS Program 1.2: Navy Capabilities, p. 39

Partially achieved. S-70B-2 flying hours were affected by unserviceability issues with embarked aircraft. MH-60R flying hours were affected by instructor workforce shortfalls and an extended training pipeline.

* The Navy is operating MRH-90s; however, their flying hours have been included under ‘Army aviation’, as the Army is joint capability manager for the aircraft. The Navy has six aircraft and approximately 1,500 hours per annum in the mature state.

S-70B-2 (Seahawk)

2,250

2,021

AS350BA (Squirrel)

1,500

1,609

MH-60R

3,400

2,850

MRH-90* (multi-role helicopter)

0

0

Laser airborne depth sounder aircraft

980

946

Flying hours

Estimate

Actual

2015–16 PAES Program 1.3: Army Capabilities, p. 35

Partially achieved. The transfer of the MRH-90 to core support for Special Forces was suspended due to reliability and aircraft design shortfalls. Factors that affected achievement of flying hours include:

  • S-70A Black Hawk — fleet-wide maintenance issues and vacancies in contracted maintenance workforce
  • Bell 206B-1 Kiowa — reduction in trainee and flying instructor numbers
  • Tiger ARH — aspects of reliability, availability and maintainability
  • MRH-90 Taipan — higher-than-expected maintenance requirement exceeding capacity.

CH-47D Chinook

380

456

CH-47F Chinook

1,300

1,415

S-70A Black Hawk

4,575

4,090

Bell 206B-1 Kiowa

5,300

5,079

Tiger armed reconnaissance helicopter (ARH)

4,350

3,995

MRH-90 Taipan

6,250

5,575

Achieve levels of capability preparedness as directed by the Chief of the Defence Force.

2015–16 PBS Program 1.3: Army Capabilities, p. 43

Achieved.

Meet the Government’s operational requirements.

2015–16 PBS Program 1.3: Army Capabilities, p. 43

Achieved.

Generate, prepare and sustain land forces for each current operation.

2015–16 PBS Program 1.3: Army Capabilities, p. 43

Achieved.

Achieve a level of training that maintains core skills, professional standards and baseline capability preparedness.

2015–16 PBS Program 1.3: Army Capabilities, p. 43

Achieved.

Provide timely, accurate and considered advice on Army capabilities to the Government, the Chief of the Defence Force and the Secretary.

2015–16 PBS Program 1.3: Army Capabilities, p. 43

Achieved.

Flying hours

Estimate

Actual

2015–16 PAES Program 1.4: Air Force Capabilities, p. 37

Achieved.

* The PC-9/A replacement, P-8A Poseidon maritime surveillance and E/A-18G Growler electronic attack aircraft are not yet in service.

PC-9/A

16,104

15,581

PC-9/A replacement*

0

0

KA350 King Air

9,950

9,370

C-130J Hercules

7,350

7,300

C-17A Globemaster III

7,000

7,142

C-27J Spartan

1,200

853

KC-30A multi-role tanker support

6,000

5,924

737 Boeing business jet

1,500

1,445

CL-604 Challenger

1,903

2,003

AP-3C Orion

6,770

7,110

E-7A Wedgetail

3,240

3,532

F/A-18A/B Hornet

17,700

15,986

F/A-18F Super Hornet

5,200

4,866

P-8A Poseidon*

0

0

Hawk 127

7,000

6,627

E/A-18G Growler*

0

0

F-35A Lightning II

500

468

Meet the Government’s operational requirements.

2015–16 PBS Program 1.4: Air Force Capabilities, p. 47

Achieved.

Achieve levels of preparedness as directed by the Chief of the Defence Force.

2015–16 PBS Program 1.4: Air Force Capabilities, p. 47

Achieved.

Conduct force generation in a manner that balances operational commitments and contingency planning.

2015–16 PBS Program 1.4: Air Force Capabilities, p. 47

Achieved.

Achieve a level of training that maintains core skills, professional standards and baseline preparedness.

2015–16 PBS Program 1.4: Air Force Capabilities, p. 47

Achieved.

Provide timely, accurate and considered advice on Air Force capabilities to the Government, the Chief of the Defence Force and the Secretary.

2015–16 PBS Program 1.4: Air Force Capabilities, p. 47

Achieved.

Input to strategic-level decision-making committees on military options and operational matters, and other advice on the development of capability, is timely and accurate.

2015–16 PBS Program 1.5: Joint Operations Command, p. 50

Achieved.

Joint forces are certified, deployed and sustained efficiently and effectively, and in accordance with agreed timeframes.

2015–16 PBS Program 1.5: Joint Operations Command, p. 50

Achieved.

Australian Defence Force operations and non-operational activities are planned, controlled and conducted in accordance with the promulgated rules of engagement and operational governance requirements in the areas of medical administration and clinical governance, and personnel, logistics, financial and contract management.

2015–16 PBS Program 1.5: Joint Operations Command, p. 50

Achieved.

High level of engagement with Joint Operations Command, International Policy Division, Strategic Policy Division, Australian Civil–Military Centre, and other government agencies, for operational matters.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Australian Defence Force operational tempo is managed within concurrency constraints.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Australian Defence Force joint and combined operational capability is enhanced.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Australian Defence Force operations meet their stated objective within the Government’s guidance.

2015–16 PBS Program 2.1: Operations Contributing to the Security of the Immediate Neighbourhood, p. 84

Achieved.

Australian Defence Force forces are effectively deployed and sustained.

2015–16 PBS Program 2.1: Operations Contributing to the Security of the Immediate Neighbourhood, p. 84

Achieved.

Australian Defence Force forces are withdrawn for reconstitution when they are no longer required.

2015–16 PBS Program 2.1: Operations Contributing to the Security of the Immediate Neighbourhood, p. 84

2015–16 PBS Program 2.2: Operations Supporting Wider Interests, p. 87

Achieved.

Australian Defence Force operations meet their stated objective within the Government’s guidance.

2015–16 PBS Program 2.2: Operations Supporting Wider Interests, p. 87

Achieved.

Australian Defence Force forces are effectively deployed and sustained.

2015–16 PBS Program 2.2: Operations Supporting Wider Interests, p. 87

Achieved.

Defence’s contribution to national support tasks in Australia meets Government directives.

2015–16 PBS Program 3.1: Defence Contribution to National Support Tasks in Australia, p. 90

Achieved.

Defence’s response to requests for Defence Force aid to the civil authority is effectively managed, sustained and reported.

2015–16 PBS Program 3.1: Defence Contribution to National Support Tasks in Australia, p. 90

Achieved.

Defence’s response to requests for Defence assistance to the civil community is effectively managed, sustained and reported.

2015–16 PBS Program 3.1: Defence Contribution to National Support Tasks in Australia, p. 90

Achieved.

Purpose 3—Manage the capability lifecycle

(Outcome 1)

The capability lifecycle is a core business process that enables Defence to perform its mission of defending Australia and its national interests. In line with First Principles Review recommendations, Defence must redesign its processes to procure capability more efficiently and effectively. In 2015–16, Defence worked to establish a single end-to-end capability development function that creates fewer handover points, uses a risk-based framework to inform decisions, and promotes a closer relationship between customer and purchaser. This included the development of an internal contestability function to ensure decisions are aligned to strategy, technically feasible and affordable.

Analysis of performance against Purpose 3

A capability lifecycle process was approved during 2015–16 and projects are transitioning to the new process, which includes strengthened contestability arrangements. In 2016–17, Defence will focus on embedding the new lifecycle as business as usual, and enhancing the contestability function.

The smart buyer concept was endorsed during 2015–16 and is a core part of the capability lifecycle. Central to the smart buyer approach is a new risk-based, decision-making framework that enables capability managers and project teams to identify key project risks and use that risk analysis to develop tailored project execution strategies.

In accordance with the First Principles Review recommendations, an Investment Committee has been established which is responsible for all capital investments and for maintaining the integrity of the Integrated Investment Program, which in turn is an important part of Defence developing and acquiring future capability.

Performance information against the performance criteria related to Purpose 3 is available in tables 3.5 and 3.6.

Table 3.5: Performance results for criteria relating to Purpose 3

Performance in achieving the purpose

Performance criterion

Source

Results

The Integrated Investment Program is implemented in accordance with Government decisions.

2015–16 Defence Corporate Plan, p. 7

The delivery of the Integrated Investment Program is being managed through the Investment Committee in accordance with Government direction.

Improved costing fidelity between first and second pass.

A total-life-of-ownership costing model is implemented.

2015–16 Defence Corporate Plan, p. 7

The Chief Finance Officer is leading the development and implementation of costing methodologies that align with whole-of-government requirements and improve the efficiency and effectiveness of Defence’s costing activities.

Proposals, once approved by Government, meet agreed schedule and are delivered within agreed costs and scope.

2015–16 Defence Corporate Plan, p. 7

At 30 June 2016, Defence is managing 196 active major and minor capital equipment projects worth $107.5 billion, 65 active major capital facilities projects worth $11.3 billion and 46 information and communications technology capital/investment projects worth $136.1 million.

Major capital facilities projects are being delivered within agreed scope, schedule and cost. Military equipment projects are being delivered within the agreed parameters for scope and cost, with an average slip of 2.8 per cent against initial operational capability and 5.8 per cent against final operational capability, as measured against the schedule baseline in each project’s latest materiel acquisition agreement.

Government is satisfied capability proposals are fully contested, including the technical and cost components.

2015–16 Defence Corporate Plan, p. 7

A Contestability Division was established within the Strategic Policy and Intelligence Group to provide assurance that capability proposals are aligned with strategy, technically feasible and affordable.

Table 3.6: Performance results for criteria relating to delivering the outcomes of Purpose 3

Performance in delivering the outcome

Performance criterion

Criterion source

Results1

Approved major capital facilities projects are delivered within budget and schedule, compliant with legislative and other statutory requirements, standards and policies.

2015–16 PBS Program 1.9: Chief Operating Officer – Defence Support and Reform, p. 60

Achieved.

Strategic investment in consolidated networks, infrastructure, service-orientated architecture, applications and information management enables transition to a single information environment.

2015–16 PBS Program 1.10: Chief Operating Officer – Chief Information Officer, p. 64

Achieved.

Provide advice to the Secretary, the Chief of the Defence Force and the Minister within agreed timeframes.

2015–16 PBS Program 1.13: Capability Development, p. 72

Achieved.

Deliver Defence capability proposals with feasible schedule, cost and capability estimates.

2015–16 PBS Program 1.13: Capability Development, p. 72

Achieved.

Innovation activities contribute to current or future Defence capability, or de-risk capability development activities.

2015–16 PBS Program 1.13: Capability Development, p. 72

Achieved.

Submit test concept documents, early test plans, test evaluation master plans and trial reports in support of capability submissions.

2015–16 PBS Program 1.13: Capability Development, p. 72

Achieved.

Deliver major and minor capital equipment within the agreed parameters for schedule, scope and budget.

2015–16 PBS Program 1.1 (old Defence Materiel Organisation): Management of Capability Acquisition, p. 156

Achieved.

Capability Acquisition and Sustainment Group is meeting Government ministerial and departmental expectations and timeframes for provision of policy, advice and support and delivery of industry programs.

2016–17 PBS Program 1.7: Capability Acquisition and Sustainment, p. 59

Achieved.

Note:
1. Some projects experienced an in-year budget reprogramming and schedule delay.

Purpose 4—Integrate enabling functions to support operations and capability

(Outcomes 1, 2 and 3)

Defence’s corporate and military enabling functions are essential to the effective and efficient delivery of capability and in supporting operations. The enabling functions range from supporting the Australian Defence Force in the conduct of operations through information and communications technology (ICT) services and logistics and health support, to building and remediating the Defence estate. Over the next four years, the priority is to develop a service delivery system as recommended by the First Principles Review. This involves standardising services, removing duplication of functions, professionalising the workforce and ensuring there are clear lines of ownership and accountability.

Analysis of performance against Purpose 4

In 2015–16, military enabling functions were consolidated under the Vice Chief of the Defence Force, and corporate enabling functions were consolidated under the Associate Secretary. These changes have promoted a more coordinated approach to service delivery.

Reforms to service delivery began in 2015–16 and will continue in 2016–17. Investment in ICT and estate infrastructure were included in the Integrated Investment Program and are monitored by the Investment Committee. In-year management and delivery of other enabling services are managed by the Enterprise Business Committee.

The Joint Logistics Command and Joint Health Command provided effective and efficient logistics and health support to current operations, force preparation and raise, train and sustain activities and exercises.

During the reporting period, eight major science and technology capabilities were externally reviewed. A number of world-class and world-leading capabilities were identified. A partnership framework was implemented, resulting in alliances with 30 universities, 11 multinational companies and three publicly funded research agencies. International partnerships with the United States and the United Kingdom were strengthened, and engagement with Japan and South Korea was extended.

Defence also conducted strategic research during the reporting period to mitigate strategic surprise and invest in game-changing capabilities. Achievements in 2015–16 include:

  • the successful launch of a hypersonic test vehicle, HIFiRE 5b, from the Woomera test range
  • the delivery of a viral epidemic forecasting algorithm that was adopted by government.

Defence experienced some challenges in the ICT domain in 2015–16, including an increased number of disruptions or degradation of service incidents due to ageing infrastructure and/or external circumstances, such as power outages. This will be addressed by the modernisation of Defence ICT, which is outlined in the 2016 Defence White Paper.

Performance information against the performance criteria related to Purpose 4 is available in tables 3.7 and 3.8.

Table 3.7: Performance results for criteria relating to Purpose 4

Performance in achieving the purpose

Performance criterion

Source

Results

Services are costed and benchmarked demonstrating value and return on investment.

2015–16 Defence Corporate Plan, p. 8

A performance measurement framework was established to monitor the performance of corporate enabling services. The framework includes the creation of service delivery key performance indicators for each enabling function that measure the progress of service delivery reform and the results of various customer engagement mechanisms and benchmarking against industry for the four functions where comparable industry data is available (finance, ICT, human resources and non-materiel procurement).

Services are customer-focused and integrated at the regional level.

2015–16 Defence Corporate Plan, p. 8

Service delivery improvement programs implemented by each corporate enabling function are intended to enhance the focus on customers. Customer feedback through six-monthly customer satisfaction surveys is used to target improvement initiatives. Integration at the regional level commenced, with regional service delivery personnel engaged to implement an integrated service delivery model focused on improving the customer experience. The model includes an integrated web portal, transition to one phone number for all services (1800 Defence), and face-to-face centres to facilitate integrated service delivery outcomes for customers.

Defence has established enterprise-wide frameworks for architecture standards and master data management.

2015–16 Defence Corporate Plan, p. 8

Target-state architectures for each Defence information domain were identified, with the majority of architecture standards now complete.

Defence has implemented a roadmap to standardise business and information processes and their supporting applications.

2015–16 Defence Corporate Plan, p. 8

High-level roadmaps were completed for each of the information domains. The roadmaps articulate the planned rollout of information management capabilities out to 2025 for each domain.

Information management investment is included and prioritised in the Integrated Investment Program.

2015–16 Defence Corporate Plan, p. 8

The Integrated Investment Program included and prioritised information management investment.

Estate investment is included and prioritised in the Integrated Investment Program.

2015–16 Defence Corporate Plan, p. 8

Estate investment is now considered and prioritised by the Investment Committee, in accordance with the Integrated Investment Program.

The estate is aligned with the requirements of the current and future force.

2015–16 Defence Corporate Plan, p. 8

A Future Defence Estate Profile project was initiated to establish an optimal estate footprint that aligns the estate with current and future force requirements, and that is sustainable, efficient and safe. Eleven property disposals were actioned and provided gross proceeds of $22.5 million to be reinvested in Defence.

Table 3.8: Performance results for criteria relating to delivering the outcomes of Purpose 4

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Australian Defence Force operations and exercises receive effective and efficient logistics and health support and services.

2015–16 PBS Program 1.1: Office of the Secretary and Chief of the Defence Force, p. 33

Achieved.

The Defence estate is managed and maintained to meet current and future Defence capability and Government priorities.

2015–16 PBS Program 1.9: Chief Operating Officer – Defence Support and Reform, p. 60

Achieved.

Agreed base support and other corporate services are prioritised and delivered to enable Defence capability requirements.

2015–16 PBS Program 1.9: Chief Operating Officer – Defence Support and Reform, p. 60

Achieved.

ICT capabilities are developed and sustained in accordance with agreed stakeholder priorities.

2015–16 PBS Program 1.10: Chief Operating Officer – Chief Information Officer, p. 64

Achieved.

ICT security is maintained to an appropriate level.

2015–16 PBS Program 1.10: Chief Operating Officer – Chief Information Officer, p. 64

Achieved.

ICT shared services reforms are effective in reducing costs and increasing productivity across Defence.

2015–16 PBS Program 1.10: Chief Operating Officer – Chief Information Officer, p. 64

Achieved.

ICT services and service support are delivered in accordance with the Defence ICT Services Delivery Charter and the Defence ICT Services Catalogue.

2015–16 PBS Program 1.10: Chief Operating Officer – Chief Information Officer, p. 64

Partially achieved. The number of disruptions or degradation of service incidents increased due to ageing infrastructure and/or external circumstances, such as power outages.

Defence’s science and technology capability is contributed to by:

- a workforce with world-class expertise and facilities, measured through benchmarking and client feedback; and

- appropriately leveraged science and technology engagement and partnerships with research organisations, industry and academia, including international government agencies.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

The applied research program is strategically balanced and aligned with the needs of Defence in support of operations, the current force, capability development and acquisition, and the needs of national security agencies.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

Research program outputs enable enhanced Defence and national security capability, treat risks and save resources.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

Strategic research is focused on supporting future Defence capability; it enables game-changing capability in the longer term, to both prevent and create strategic surprise.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

Program outcomes are delivered on time, in scope and within agreed resources.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

Purpose 5—Enhance intelligence and security capability

(Outcomes 1, 2 and 3)

Defence intelligence capabilities support Australian Defence Force planning and operations, other government agencies and Government decision making. The increasing mobility, sophistication and agility of potential adversaries require Australia to have access to advanced signals and geospatial intelligence technologies, along with timely strategic advice. Defence intelligence needs to be able to exploit collection opportunities, analytical tools and space-based imaging capability to support the Australian Defence Force and other government agencies. Defence needs to protect its information, capabilities and people from security threats to ensure that it can meet national strategic priorities, support national-level decision making and guard against serious damage to national security.

Analysis of performance against Purpose 5

As a result of the First Principles Review, policy and intelligence functions were consolidated in 2015–16. The full value of this consolidation process is expected to be realised in 2016–17. Responsibility for security capabilities transitioned to the Associate Secretary in 2015–16, as it is one of the core corporate enabling services for Defence.

Cyber and intelligence capabilities became increasingly important in 2015–16, as discussed in the 2016 Defence White Paper. Cooperation with other agencies and international allies is a critical part of enhancing these capabilities. In 2015–16, Defence partnered with the Australian Cyber Security Centre to enhance cyber security awareness, and will continue to build on this relationship in 2016–17.

The Defence intelligence agencies developed capability through the professionalisation of the Defence Intelligence Organisation’s intelligence analysts, investment in analytic tradecraft resources and improved cyber security awareness.

Performance information against the performance criteria related to Purpose 5 is available in tables 3.9 and 3.10.

Table 3.9: Performance results for criteria relating to Purpose 5

Performance in achieving the purpose

Performance criterion

Source

Results

Current intelligence capabilities: Defence meets Government’s intelligence requirements.

2015–16 Defence Corporate Plan, p. 9

The Defence intelligence agencies produced timely and high-value intelligence, particularly in support of Australian Defence Force operations.

Current intelligence capabilities: Collaboration with cross-government intelligence partners is strengthened.

2015–16 Defence Corporate Plan, p. 9

The Defence intelligence agencies partnered with both Australian and allied agencies to maximise collaboration opportunities across a broad spectrum of intelligence targets and topics.

Next-generation intelligence capabilities: Defence meets Government’s intelligence requirements.

2015–16 Defence Corporate Plan, p. 9

The Defence intelligence agencies enhanced their intelligence capabilities. In particular, the Defence Intelligence Organisation focused on the requirement for ongoing professionalisation of intelligence analysts and strengthened investment in analytic tradecraft resources and innovative recruitment strategies.

Next-generation intelligence capabilities: Collaboration with cross-government intelligence partners is strengthened.

2015–16 Defence Corporate Plan, p. 9

The Defence intelligence agencies strengthened collaboration with cross-government intelligence partners by leveraging existing processes and forums and identifying new opportunities.

There is a reduction in the number of security incidents.

2015–16 Defence Corporate Plan, p. 9

During the reporting period, there was a small increase in incident reporting due to greater reporting of minor incidents by Defence personnel as a result of the heightened security threat environment and an increase in security awareness and training.

Managers actively work to fulfil their security obligations.

2015–16 Defence Corporate Plan, p. 9

During the reporting period, Defence issued a new Supervisor Security Handbook, which provides tailored security guidance for supervisors and reinforces their contribution to meeting Defence security obligations.

The Australian Government Security Vetting Agency services meet customer expectations.

2015–16 Defence Corporate Plan, p. 9

The time taken to complete baseline and negative vetting clearances is close to benchmark, with more that 70 per cent of customers satisfied with the services provided. A positive vetting remediation program is addressing a backlog of clearances to achieve benchmark timeframes.

Table 3.10: Performance results for criteria relating to delivering the outcomes of Purpose 5

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Deliver intelligence and security services to meet Defence and Government requirements.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Achieved.

Develop next-generation intelligence, geospatial and security assessment capabilities, including geospatial intelligence, signals intelligence and cyber.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Partially achieved. Defence made progress in developing its geospatial intelligence, signals intelligence and cyber capabilities in 2015–16. Defence will implement innovative recruitment and retention plans in 2016–17 to grow the specialist intelligence workforce needed to meet the requirements set out in the 2016 Defence White Paper.

Strengthen the approach to security across Defence and government.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Achieved.

Deliver strategic guidance and management support to meet Defence’s foreign language requirements.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Partially achieved. Due to the specialised nature of particular foreign language requirements and some resource constraints, not all priorities were achieved. Updated strategic guidance is being implemented to support the achievement of the required foreign language training and testing.

Achieve best practice in governance and compliance.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Achieved.

Ensure that the intelligence and security workforce is developed and skilled.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Partially achieved. Defence is fostering a culture of ongoing improvement and professionalisation of the intelligence and security workforce to ensure high-quality products can be delivered now and into the future. Efforts in 2016–17 will focus on recruiting and retaining the highly specialised workforce needed to sustain the required rate of effort in support of Defence and whole-of-government requirements.

Deliver intelligence capability dividends through international and national partnerships.

2015–16 PBS Program 1.6: Intelligence Capabilities, p. 52

Achieved.

Advice to Defence and the Government on science and technology matters is valued through its contribution to improved Defence and national security outcomes.

2015–16 PBS Program 1.12: Defence Science and Technology, p. 70

Achieved.

Purpose 6—Understand and shape Australia’s international security environment

(Outcomes 1 and 2)

The Government expects Defence to play an active role in contributing to regional security and stability, and to contribute to coalition operations across the world where our interests are engaged. Delivering on these expectations requires 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.

Analysis of performance against Purpose 6

The release of the 2016 Defence White Paper provided Government direction about how Defence is expected to shape the international security environment. The consolidation of policy and intelligence functions will assist in providing clear advice to the Government about the international security environment and Defence’s role.

During 2015–16, the conduct of international engagement activities, including bilateral exercises such as Exercise Talisman Sabre 15, provided the opportunity for Defence to certify capabilities and enhance interoperability with the United States, a key Defence partnership. International engagement activities, such as the United States Marine Corps rotation and training of military and security forces in the Middle East, also contributed to the effective management of Australia’s security interests.

The sixth United States Marine Corps rotation began in 2016 in the Northern Territory, comprising around 1,250 Marines, four Bell UH-1Y Venom helicopters and supporting equipment. During the reporting period, Australia and the United States worked collaboratively to develop sustainable policy and governance arrangements.

On 2 April 2016, Australia’s export controls were strengthened by the implementation of the Defence Trade Controls Act 2012. Detailed statistical information is available at www.defence.gov.au/deco/Statistics.asp.

The Australian Civil–Military Centre achieved its goals in 2015–16, including delivery of the Government-directed East Asia Summit Rapid Disaster Response: Search and Rescue lessons-learned seminar in Sydney in September 2015. The seminar was co-chaired by Australia and Thailand.

Performance information against the performance criteria related to Purpose 6 is available in tables 3.11 and 3.12.

Table 3.11: Performance results for criteria relating to Purpose 6

Performance in achieving the purpose

Performance criterion

Source

Results

The Defence International Engagement Strategy is implemented as agreed with Government.

2015–16 Defence Corporate Plan, p. 10

The Defence International Engagement Strategy was developed and, along with the Defence International Engagement Policy, informs subordinate plans, directives and Defence’s program of engagement activities.

Table 3.12: Performance results for criteria relating to delivering the outcomes of Purpose 6

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Policy guidance is forward-looking, timely, innovative and practical.

2015–16 PBS Program 1.1: Strategy, pp. 33, 35

Achieved.

Defence’s international engagement activities contribute to the effective management of Australia’s security interests.

2015–16 PBS Program 1.1: Strategy, p. 35

Achieved.

Defence’s export control system is effectively managed, and balances proliferation concerns and Australia’s trade objectives.

2015–16 PBS Program 1.1: Strategy, p. 35

Achieved.

Staff skills are developed and continually enhanced.

2015–16 PBS Program 1.1: Strategy, pp. 33, 35

Achieved.

Australian Civil–Military Centre delivers its goals effectively and efficiently in accordance with Government instructions.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Defence activities to implement the force posture initiatives are identified and completed in accordance with arrangements between the Australian and United States governments.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

Purpose 7—Partner with industry to enhance Defence capability

(Outcomes 1 and 2)

Australia’s defence industry is a major partner in the Government’s plans for current and future defence capabilities. It is vital that Australia maintains a science and technology base and defence industry capable of supporting Defence’s acquisition and sustainment requirements during peacetime and operations. Defence is working with industry to implement a shared policy agenda that supports the growth and competitiveness of Australian businesses. A highly skilled and capable Australian defence industry is necessary for Defence to achieve its strategic objectives and deliver large-scale, complex projects and sustain military capability.

Analysis of performance against Purpose 7

The release of the 2016 Defence Industry Policy Statement clearly identified that Defence needs to build a closer collaboration with industry to meet the challenges of the future and deliver the Government’s program of work. An essential element of the First Principles Review’s new capability lifecycle is the institutionalising of Australian industry as a fundamental input to capability. This new approach was reflected in Defence’s work to mature the new lifecycle in 2015–16.

A new Industry Policy Division was established in the Strategic Policy and Intelligence Group and will work closely with industry in 2016–17 and beyond to build industry skills and drive competitiveness and export potential while harnessing Australian innovation and expertise.

A number of major capability decisions in 2015–16 entailed significant long-term Australian industry involvement. This included the commitment to the construction of future submarines and the continuous build of surface vessels in Australia; the acquisition of 1,100 Australian-designed and manufactured Hawkei protected mobility vehicles; the Wedgetail airborne early warning and control system upgrades and sustainment contracts; and the strategic munitions interim contract utilising Mulwala and Benalla facilities.

Defence will implement a number of initiatives in 2016–17, including the Centre for Defence Industry Capability, Defence Innovation Hub, and Next Generation Technologies Fund to connect Defence capability needs with the innovation expertise of the Australian industry and academic base.

Performance information against the performance criteria related to Purpose 7 is available in Table 3.13. There were no programs or performance criteria related to this purpose in the 2015–16 Portfolio Budget Statements or Portfolio Additional Estimates Statements.

Table 3.13: Performance results for criteria relating to Purpose 7

Performance in achieving the purpose

Performance criterion

Source

Results

The Defence Industry Policy Statement is published in accordance with agreed Government timeframes.

2015–16 Defence Corporate Plan, p. 10

The Defence Industry Policy Statement was released on 25 February 2016 as part of the 2016 Defence White Paper package.

The public version of the Integrated Investment Program is provided to industry.

2015–16 Defence Corporate Plan, p. 10

The Government released the 2016 Defence White Paper, the Integrated Investment Program and the Defence Industry Policy Statement in early 2016.

Purpose 8—Recruit, retain and skill a diverse Australian Defence Force and Australian Public Service workforce

(Outcomes 1, 2 and 3)

An integrated Australian Defence Force and Australian Public Service workforce is the foundation for delivering the organisation envisaged in the First Principles Review. It is also necessary to ensure Defence is fit for purpose and able to deliver its long-term strategy as outlined in the 2016 Defence White Paper. Defence needs Australian Defence Force personnel and Australian Public Service employees who have the right attitude, the right skills, and are in the right roles to achieve the Defence mission.

Analysis of performance against Purpose 8

Workforce diversity improved during the reporting period; participation rates improved for females (permanent Australian Defence Force from 15.3 per cent to 15.5 per cent, and Australian Public Service from 40.6 per cent to 41.2 per cent), Indigenous Australians (permanent Australian Defence Force from 1.5 per cent to 1.8 per cent, and APS from 1.2 per cent to 1.7 per cent), and people with disability (APS from 3.3 per cent to 3.5 per cent). Improving workforce diversity continues to be a priority for Defence to enable access to the broadest available talent in Australia and create a more inclusive culture.

Recruiting and retaining the required intelligence workforce remains a challenge for Defence. Work will continue in 2016–17 to improve security clearance timeframes and to trial more innovative approaches to intelligence workforce recruitment.

A key recommendation from the First Principles Review was the development of a strategic workforce plan. This has commenced and will be finalised in 2016. It is being developed based on an analysis of Defence’s workforce needs; identification of initiatives to improve recruitment and retention of personnel with critical skills; and identification of key skills that need to be developed in existing staff.

Performance information against the performance criteria related to Purpose 8 is available in tables 3.14 and 3.15.

Table 3.14: Performance results for criteria relating to Purpose 8

Performance in achieving the purpose

Performance criterion

Source

Results

Demand and supply are both aligned and well managed; people, skills and positions are matched for optimal performance outcomes.

2015–16 Defence Corporate Plan, p. 11

The development of a Defence Strategic Workforce Plan commenced in 2015–16 and identified 10 initiatives that will enable Defence to better align the demand and supply of skills. The Defence Strategic Workforce Plan will be implemented in 2016–17.

Defence engages effectively with the market to recruit, train and retain a skilled workforce.

2015–16 Defence Corporate Plan, p. 11

In addition to the Defence Strategic Workforce Plan, a Defence People document was drafted, detailing the key White Paper actions to deliver key people initiatives.

Australian Defence Force members and families’ health and welfare requirements are delivered within agreed targets.

2015–16 Defence Corporate Plan, p. 11

Defence provided an average 125,000 episodes of care to Defence members each month, a 9 per cent increase since 2014–15. Wait times for non-urgent medical appointments decreased and customer satisfaction increased. Take-up of the National Australian Defence Force Family Health Program was 63 per cent for entitled members.

Workforce diversity has year-on-year improvements.

2015–16 Defence Corporate Plan, p. 11

Workforce diversity improved during the reporting period; participation rates improved for females, people with Indigenous heritage and people with disability.

Defence has implemented a revised individual performance management system that is consistently applied, recognises and rewards high performance and introduces consequences for underperformance and failure to deal with it.

2015–16 Defence Corporate Plan, p. 11

Defence delivered a new performance framework for the Senior Leadership Group, with agreed leadership behaviours that reinforce a culture of accountability.

Increased staff satisfaction that workforce issues are being resolved promptly.

2015–16 Defence Corporate Plan, p. 11

Survey data showed no statistically relevant change in the level of staff satisfaction with the management and handling process of complaints and incidents of unacceptable behaviour. Seventy reviews of actions and 749 complaints of unacceptable behaviour were finalised.

There is a year-on-year decrease in the number of work health and safety breaches.

2015–16 Defence Corporate Plan, p. 11

The number of notifiable work health and safety events/incidents declined during the reporting period. In 2015–16, the number of notifiable incidents was 13,031, a reduction of 1,380 from 14,411 in 2014–15.

Table 3.15: Performance results for criteria relating to delivering the outcomes of Purpose 8

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Delivery of learning outcomes meets Defence capability requirements.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Timely, accurate and widely consulted advice on nature of service classifications.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Planning and policy frameworks to enable the contribution of the Reserves to Defence and the wider community are enhanced.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Governance and accountability frameworks that enhance the youth development experience within the Australian Defence Force Cadets and the Defence Work Experience Program.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Advice to the Secretary, Chief of the Defence Force and Government on people issues is timely and of a high quality.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

People reform through the First Principles Review, Defence White Paper, and human resource services is effective in improving customer-focused service delivery.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Projects and initiatives described in Pathway to Change and the People chapter of the Defence Annual Plan, which are aimed at delivering a sustainable people capability in Defence, are completed in a timely manner and achieve the desired outcomes.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Implementation milestones are achieved for an updated strategic workforce plan, including for each APS job family.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Implementation of a strengthened performance management system.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Partially achieved. Improvements to the performance framework for the Senior Leadership Group were implemented. Improvements to the APS performance management system are pending, following the agreement and implementation of a new Defence Enterprise Agreement. Defence has increased the take-up of leadership programs with a focus on performance culture and reform.

Completion of the Australian Defence Force Total Workforce Model for implementation by the Services.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Implementation of a new modern military superannuation arrangement for people joining the Australian Defence Force from 1 July 2016.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Enhanced support to wounded, ill and injured members of the Australian Defence Force is provided in conjunction with the Department of Veterans’ Affairs.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Implementation milestones are achieved on schedule for the Defence work health and safety strategy and the diversity and inclusion strategy.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Provide timely and professional support services to Australian Defence Force members and families, including delivery of family support programs and bereavement support in the event of death and serious casualties.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Achieve Australian Defence Force recruiting targets.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Partially achieved. A focus for 2016–17 will be on improving Reserve recruitment and pursuing greater diversity within the Australian Defence Force.

*This only includes recruitment of ab initio personnel (those with no prior military service) and applicants with prior service that are recruited through Defence Force Recruiting. Personnel with prior military service enlisted through lateral transfers and re-entry are not included.

Permanent Force entry

Target: 5,207

Applicants enlisted*: 4,734

Enlistment achieved: 90%

Gap Year entry

Target: 445

Applicants enlisted: 445

Enlistment achieved: 100%

Reserve Force entry

Target: 1,686

Applicants enlisted: 1,249

Enlistment achieved: 74%

Ensure timely recognition of Australian Defence Force members, ex-serving members and APS employees in accordance with the Australian and imperial honours and awards systems, and the civilian long service recognition schemes.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Staff skills are developed and personnel management practices successfully balance competing priorities.

2015–16 PBS Program 1.11: Chief Operating Officer – Defence People, p. 68

Achieved.

Delivery of Defence APS learning and development meets Defence job family and capability requirements.

2015–16 PAES Program 1.12: Defence People, p. 47

Achieved.

Provision of timely payments to the Commonwealth Superannuation Corporation and quality administration of Defence Forces Retirement Benefits (DFRB) Scheme, Defence Force Retirement and Death Benefits (DFRDB) Scheme and Military Superannuation and Benefits Scheme (MSBS) employer and member contributions.

2015–16 PBS Program 1.15: Defence Force Superannuation Benefits, p. 77

Achieved.

Provide quality administration services for DFRB, DFRDB and MSBS nominal interest transactions.

2015–16 PBS Program 1.16: Defence Force Superannuation Nominal Interest, p. 78

Achieved.

Members respond to and take up the Defence Home Ownership Assistance Scheme.

2015–16 PBS Program 1.17: Housing Assistance, p. 80

Achieved.

Ensure that interest rates provided to Australian Defence Force members by the panel of home loan providers are competitive with other interest rates in the market.

2015–16 PBS Program 1.17: Housing Assistance, p. 80

Achieved.

Purpose 9—Mature enterprise governance and decision making

(Outcomes 1, 2 and 3)

The One Defence business model recommended by the First Principles Review is based on strong alignment between strategy, funding and capability. This requires transparency in decision making so that any resource trade-offs are resolved explicitly. Effective corporate planning and performance monitoring are vital to ensure that the direction set by Government and the Defence Committee is effectively cascaded through the organisation and leaders are held to account for their performance. In line with the Public Governance, Performance and Accountability Act 2013, Defence is improving the way it plans, prioritises and manages resources to achieve Government-directed outcomes.

Analysis of performance against Purpose 9

Defence has progressed a significant amount of work to improve enterprise governance, planning, performance management and accountability.

During the reporting period, three senior committees were established (the Defence Committee, the Enterprise Business Committee and the Investment Committee) and an enterprise performance management framework and an enterprise risk management policy were developed and endorsed for implementation, which will occur throughout 2016–17. This work ensures Defence is compliant with the Public Governance, Performance and Accountability Act 2013.

Performance information against the performance criteria related to Purpose 9 is available in tables 3.16 and 3.17.

Table 3.16: Performance results for criteria relating to Purpose 9

Performance in achieving the purpose

Performance criterion

Source

Results

Defence complies with the Public Governance, Performance and Accountability Act 2013 and related legislation.

2015–16 Defence Corporate Plan, p. 11

The 2015–16 Defence Corporate Plan was delivered in accordance with Public Governance, Performance and Accountability Act 2013 requirements. An enterprise performance management framework designed to support the operation of the One Defence business model was endorsed by the Defence Committee in May 2016.

Managers use data to understand risk, inform planning and to support reporting of actual performance against planned objectives.

2015–16 Defence Corporate Plan, p. 11

In 2015–16, more than 40 per cent of the Defence Senior Leadership Group either attended, or nominated to attend, an enterprise risk management workshop designed to enhance the ability of attendees to use risk-based information in decision making.

Internal reporting documents provide senior leaders with an evidence-based view of organisational performance.

2015–16 Defence Corporate Plan, p. 11

Three internal, classified, Defence performance reports provided the Senior Leadership Group with information about Defence’s progress in achieving the intended results in the internal Defence business plan and, through this, the Defence corporate plan.

Table 3.17: Performance results for criteria relating to delivering the outcomes of Purpose 9

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Advice is readily sourced and made available to the offices of the Chief of the Defence Force and the Vice Chief of the Defence Force to support strategic decision making.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Timely and accurate advice on strategic communications.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Group-specific outcomes and programs are delivered on time and within agreed resources.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Achieved.

Defence meets its non-financial performance management and risk management obligations under the Public Governance, Performance and Accountability Act 2013.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

The Defence internal audit work program is provided to address high-level strategic risks that are linked to the enterprise risk management framework.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

The Defence fraud and anti-corruption plans are to prevent and detect fraud and corruption through the promotion of ethical behaviours across Defence, and the public interest disclosures are managed in accordance with the Public Interest Disclosure Act 2013.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

Defence meets its legislative and regulatory obligations.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

Defence legal support, including specialist legal advice, is provided to Defence Ministers, the Secretary, the Chief of the Defence Force and the Government in support of effective decision making and policy engagement.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

Australian Defence Force operational capability is supported, including through the deployment of Australian Defence Force lawyers to provide access to relevant and timely legal support.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.

Provide timely and high-quality financial advice to the Minister, the Secretary and Chief of the Defence Force.

2015–16 PBS Program 1.14: Chief Finance Officer, p. 75

Achieved.

Produce Defence’s budget, financial statements and the annual Defence management and finance plan within agreed statutory timeframes.

2015–16 PBS Program 1.14: Chief Finance Officer, p. 75

Achieved.

Maintain unqualified financial statements.

2015–16 PBS Program 1.14: Chief Finance Officer, p. 75

Achieved.

Accurate accounting and reporting of ‘Other Administered’.

(‘Other Administered’ comprises interest on overdue accounts, interest on operational bank accounts, interest on loans to build accommodation, dividends and tax equalisation receipts from the Defence Housing Authority and royalty receipts.)

2015–16 PBS Program 1.18: Other Administered, p. 81

Achieved.

Purpose 10—Implement First Principles Review and 2016 Defence White Paper

(Outcomes 1, 2 and 3)

The First Principles Review, Creating One Defence, found that Defence’s existing organisational model and processes were complicated, slow and inefficient. Through implementation of the recommendations of the review, Defence is making changes to accountabilities, structures, systems and processes. This will ultimately change behavioural mindsets, with leaders focusing on what is best for Defence overall to ensure that the organisation can deliver Government policy requirements set out in the 2016 Defence White Paper.

Analysis of performance against Purpose 10

The release of the 2016 Defence White Paper provided clear policy direction from the Government. It provides a comprehensive and responsible long-term plan to ensure Australia’s national security and requires Defence to take a more proactive approach to engaging with regional and global partners to contribute to the stability of our region and to the maintenance of a stable, rules-based global order.

It included a fully costed, 10-year Integrated Investment Program that brought together all capability-related investment including new weapons, platforms, infrastructure and science and technology to ensure Defence is able to achieve its mission of defending Australia and its national interests both now and into the future.

The First Principles Review required Defence to establish a stronger strategic centre to strengthen accountability and top-level decision making. In 2015–16, important work occurred that focused Defence’s strategic centre on setting direction, providing the best possible advice to the Government and monitoring the organisation’s performance in achieving Government-directed outcomes.

The first year of First Principles Review implementation saw significant transformation in how Defence undertakes capability management. The disbandment of the Defence Materiel Organisation and the standing up of the Capability Acquisition and Sustainment Group as an integral part of Defence occurred on 1 July 2015. A new, more streamlined end-to-end capability development process was developed. Defence commenced transition to the new capability lifecycle in April 2016, with the Capability Development Group disbanded and its functions moved to other parts of Defence, and the Investment Committee took responsibility for all Defence investment decisions, including estate and infrastructure, information and communications technology, and major capability acquisitions.

Significant work undertaken in 2015–16 to drive cultural change, particularly around strengthening accountability and leadership behaviours, included:

  • delivery of an updated ministerial directive that clearly describes the individual and shared accountabilities of the Secretary and the Chief of the Defence Force
  • reinforcing personal accountability through the introduction of a role charter for each member of the Senior Leadership Group
  • significant changes to the Defence senior committees providing greater clarity for decision making.

The aim of this organisational transformation was to position Defence to deliver on Government policy direction as outlined in the 2016 Defence White Paper.

Performance information against the performance criteria related to Purpose 10 is available in tables 3.18 and 3.19.

Table 3.18: Performance results for criteria relating to Purpose 10

Performance in achieving the purpose

Performance criterion

Source

Results

Defence’s implementation of the First Principles Review recommendations delivers the intent of the review within the two-year timeframe.

2015–16 Defence Corporate Plan, p. 13

The first year of First Principles Review implementation provided a solid foundation for the broader change to come in 2016–17, with 36 of the 75 recommendations now completed.

The 2016 Defence White Paper implementation plan is delivered.

2015–16 Defence Corporate Plan, p. 13

The 2016 Defence White Paper implementation strategy was delivered and endorsed, with implementation underway. The Defence Committee is leading the coordination of strategy, capability and resources across Defence. Implementation will continue in 2016–17 and beyond.

Table 3.19: Performance results for criteria relating to delivering the outcomes of Purpose 10

Performance in delivering the outcomes

Performance criterion

Criterion source

Results

Group-specific reform and savings have been achieved.

2015–16 PBS Program 1.7: Vice Chief of the Defence Force, p. 55

Partially achieved. Some forecast savings associated with Defence logistics reforms are now expected in 2017–18 due to delays in implementing a new and more efficient warehouse management system.

Business outcomes are improved as part of broader Defence reform.

2015–16 PBS Program 1.8: Chief Operating Officer – Defence Executive Support, p. 58

Achieved.