Annual Report 2003-04

Year in Review

Review by the Secretary and the Chief of the Defence Force

Australia's strategic environment continued to present complex challenges in 2003-04. Defence remained focused on contributing to global and regional efforts to combat terrorism, and to fostering regional stability. The post September 11 demands on Defence continued to broaden, with increasingly close involvement in whole-of-government national security responses. We have responded well to expanded Government requirements, and it has been a rewarding year for Defence in terms of the Australian Defence Force's (ADF) performance on operations.

In the area of Defence management, much has been achieved in implementing the Kinnaird review's recommendations for improving Defence's performance in capability acquisition and procurement and for further reform of the Defence Materiel Organisation. We have continued to work at resolving challenging financial management matters and improving internal coordination. The groundwork for enhanced performance has been laid, but more needs to be done to improve asset and liability accounting.

As we write, approximately 2,000 ADF personnel are deployed on operations, around 1,100 of them overseas. They are on Coalition operations in the Middle East, and working with regional partners to help restore the rule of law in the Solomon Islands and to establish a basis for a peaceful democratic future for that nation. They are assisting Customs and Coastwatch to protect our borders and are supporting counter-terrorism security operations at home. Their operational success is made possible by the work of their ADF and civilian colleagues based around Australia.

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Australia's Strategic Environment

In the three years since the terrorist attacks of September 2001, we have adjusted to the changed circumstances in our strategic environment and demonstrated our ability to respond quickly to emerging crises, building greater versatility and flexibility into our force structure and planning processes.

The threat of terrorism has had a major impact on the environment in which Defence operates. The bombing outside the Australian Embassy in Jakarta this year (after the period reviewed in this annual report) underscored again the intent of transnational terrorists to attack Australian interests abroad. This asymmetric threat has diminished the value of borders and geographic distance, fundamental to Australia's traditional security posture. Proliferation activities, and the risk of terrorism and weapons of mass destruction coming together, give a particular urgency to Defence's responses to our changed strategic circumstances.

Good, actionable intelligence has been key to our response. Continued investment in the Defence intelligence agencies over this past year has enabled them to develop new technologies to help combat terrorism, and systems to provide enhanced support to ADF commanders in the field.

Over the same period, our counter-terrorist capabilities have been strengthened and successfully exercised, with Special Operations Command Headquarters achieving full strength and capability, and expenditure on new capability on course. The Incident Response Regiment is now operationally capable and will reach full maturity by December 2005. Defence's participation in the whole-of-government counter-terrorism Exercise Mercury 2004 demonstrated our capacity to operate simultaneously in two geographically separate regions, and the readiness of the Reserve Response Force to support counter-terrorism operations at short notice. Our hosting of a Regional Special Forces Counter-Terrorism Conference in Australia in June 2004 brought together senior special forces commanders and counter-terrorism officials from 16 countries within the Asia-Pacific region to discuss cooperative counter-terrorism measures across the region.

Defence has been a key agency in the multinational Proliferation Security Initiative (PSI), which is working to prevent the transshipment of weapons of mass destruction, contributing ADF assets and policy support to the first multilateral PSI interdiction exercise in September 2003, hosted by Australia in the Coral Sea. We also provided expert advice on the export of defence and dual use items from Australia to limit the potential for exports from Australia becoming components of weapons of mass destruction.

Over the past year, Defence has also been involved in whole-of-government efforts to foster national stability, integrity and cohesion in our immediate neighbourhood. Some regional nations, including East Timor, Papua New Guinea and other Pacific Island states, are vulnerable because of internal stresses caused by economic disparity, population pressures and governance challenges. The ADF's support of Australia's intervention in the Solomon Islands, at the invitation of that country's Government, was a key regional success. And Defence's cooperation program continued to deliver practical assistance to the region through initiatives such as the Pacific Patrol Boat Project and the Papua New Guinea Defence Force Reform Program.

In support of national peacetime security tasks, we contributed to whole-of-government domestic security activities in aviation and maritime security during the year, and provided counter-terrorism support to major public events such as the Rugby World Cup 2003 and the visits by the Presidents of the United States and the People's Republic of China.

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