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Program of Administrative Savings
In the context of the 2003-04 Budget, the Government agreed that Defence would absorb a range of cost pressures through a program of administrative savings. The five-year program is designed to deliver ongoing savings of $200m per annum by 2007-08. To date, net savings totalling $60.6m in 2003-04 and $127.6m in 2004-05 have been achieved through reductions in overheads, business process improvements and organisation/structure changes. The savings targets for 2003-04 and 2004-05 have been more than fully met and the initiatives underway will ensure that the 2005-06 target will also be achieved. Details are shown in Table 1.12 below:
Table 1.12 Program of Administrative Savings Targets
|
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
Ongoing |
|
$m |
$m |
$m |
$m |
$m |
$m |
| Savings target |
50.0 |
100.0 |
150.0 |
175.0 |
200.0 |
200.0 |
| Savings achieve/planned to date |
60.6 |
127.6 |
156.1 |
175.4 |
171.3 |
171.3 |
Savings to date have been achieved by:
- planned reductions in the civilian workforce over a three year period, in response to a significant APS workforce growth during 2002-03;
- reductions in non capability-related supplier expenses, including professional service providers;
- a 20 percent reduction in overseas travel;
- a 10 percent reduction in domestic travel;
- renegotiations of the Australian Defence Force Academy agreement, resulting in cost savings;
- a reduction in non-operational overseas positions of 110 personnel programmed in 2003-04 and in the years thereafter;
- removal from service of three P-3 Orion derivative training aircraft, following the introduction of the advanced flight simulator, resulting in operational savings which have been redirected to P3-C Orion aircraft logistics;
- the rationalisation of the civilian personnel administration centres from three to two locations;
- rationalisation of the former Public Affairs and Corporate Communication Division;
- introduction of PMKeyS Self Service, resulting in, printing savings and through electronic distribution of civilian and military pay summaries;
- introduction of the Defence Travel Card for domestic and overseas business related travel, including the Diners Club rebate, as part of the Defence Travel Reform;
- closure of the Defence Cash Offices and centralising receipting, resulting in, implementation of automated processes (Bill Pay and Phone Pay) and recovery of debt through salary;
- renegotiations of the Defence ComCover Insurance Premium, resulting in estimated savings totalling $22.5m in 2004-05, $20.8m in 2005-06, $19.1m in 2006-07, and $17.3m in 2007-08; and
- savings to date from the Regional Information, Communication and Technology Market Testing project.
cont/...
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