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Secretary reflects on key themes

Photo by Phil Vavasour

We last met in February and it's been a busy time since then. Of course we've had the deployment to Al Muthanna - the task group - and that went extremely well in a number of senses: the military deployment side of it, the logistic side of it, the policy input and particularly the preparation of equipment and so on. All of that was tremendous across-the-organisation input.

Some fantastic work was going on in Sumatra when we met here last and it continued winning great credit for our country and for Defence, though of course that satisfaction was offset in part by the Nias tragedy. Of course we've now got a new government decision on Special Forces deployment to Afghanistan. Overall the budget went pretty well for us, though we were disappointed to find at the end of the year that we've had an underspend. I advocate a culture of economy as you know - I want savings, but I want them in our overheads. We must take this opportunity while we have money available to get it spent in the right areas - on capability, facilities and so on. We did struggle to achieve that last year, although happily I think I'm right in saying that supplier expenses were also down.

DMO's prescription was completed and that was a huge achievement. I want to acknowledge the work that went into that - the separation of the accounts, the completion of all the process work around it. I have said elsewhere and I'll say it again, that had you told me in September 03 that we'd have achieved that by 1 July 05, I'd have been incredulous. But we did achieve it, and I'm very grateful to the people who contributed so much.

I want to acknowledge as well the rest of the process of reform which has got under way in DMO under Dr Gumley's leadership team there. I think that's something that we ought to take a lot of satisfaction in. That said, I do want to emphasise though that while DMO is separate in the accounting sense, it is still part of Defence in every other way. Steve Gumley is still in the DC, the DCIC, the FSPB and all those alphabet soup bodies we have, and plays an even more important role than DMO has played in the past because of the very high quality of reporting that he is now able to bring to those bodies. And I think his role there just underlines how important is the continuing glue between DMO and the rest of Defence.

Looking ahead for the next five or six months we've got an extremely crowded agenda. Our deployments in Iraq and the ones we're about to make in Afghanistan will, I expect, become increasingly preoccupying. The deployment issues themselves are complex and the policy issues in both cases, no less so. I can see us being very strongly focused on those issues in the coming months. As well, we have to complete a Strategic Review which the Minister wants out by the end of the year. Work on that is quite well advanced.

We have to complete the affordability review of the DCP which is required of us by Cabinet. We're working with other Government agencies on that. We'll have to complete it by the end of the year, because the Strategic Review and the DCP Review will come together as we seek to address this issue of Defence funding beyond 2010-11. The 3% real growth that we got from the White Paper runs out in 2010-11 and Government has mandated us to work with other agencies to make some recommendations on Defence funding beyond 2010-11.

We'll need to be in a position to do this by the end of the year so that it can be treated in Budget by Cabinet early next year and that means bringing together these other two elements, the Strategic Review and the DCP Review.

We also have to conclude our financial statements. I don't expect the same amount of pain as I took last year, but I've got to say that neither will there be quite as much progress to report as I would have liked, notwithstanding the huge effort we've put in. That remains a very high priority for the organisation. Ken Moore is going to say more about it later today, but I can assure you that the Minister and others in Government are very strongly focused on our performance. Suffice to say here, as I've said elsewhere and I'll say again, we're into much more than just remediation, we're into a substantial change management program.

The overhaul of the military justice system will also demand our attention in the coming months, with the Government due to formally respond to the Military Justice Inquiry report in September. I stand alongside CDF and the Service Chiefs in a shared and firm commitment to a transparent and cohesive military justice system.

We have to begin work in the next few months as well on the DECA - in fact we've begun. A new DECA has to take effect, or has to be voted on at least, before 1 July 06, and we've got a good bit to do. I expect some changes in the DECA, in the tone and content of it. And of course we've got to find the money to pay for it.

We have to get some major facilities projects underway. The processes of getting projects approved are a bit attenuated and we have found it difficult to get the traction we wanted in the last financial year, we've got it now and so it's a matter of getting out there and getting the money spent. The good news is that the spending last year on facilities repairs, refurbishment, upgrading and so on was more than fully spent so we're making good use of that money.

We have to complete a review of the Command and Control arrangements. There is an expectation from Government that we will make savings in this area. Not unrelated to that, we've got to advance our work on the Bungendore Headquarters, hopefully through contract stage. We have to complete our work on IT outsourcing and the establishment of a new legal panel. We face - as you've seen from this morning's press - some very big issues in the area of medals on which we're behind schedule. Government decision making has been delayed, but when it eventually is completed we're looking at the issue of anything between 400,000 and a million new medals and that will place very big demands on our organisation.

These are just a few of the things that will be preoccupying us over the next few months. There's much more as well. So the period between now and the next SLG is going to be as busy and pressured as ever.

I essentially see today's SLG as an opportunity for you to hear from the CDF and the new Service Chiefs, but I want to convey three clear messages of my own.

The first is we still face challenges in ensuring that the quality of our management and our administration is as it should be. The attitude that we'll get on with what we are good at and let the rest of the management of the place look after itself isn't good enough. It hasn't worked and it affects our credibility and it also affects the effectiveness with which we can position ourselves to deal with the sorts of issues that Ken Henry foreshadowed last night.

Deputy Secretary Corporate Services, Alan Henderson, poses a question for the panel during the SLG Recall Day. Photo by Phil Vavasour

Second, CDF will be talking later about values, and I want to endorse in advance everything that he's going to say. He and I have talked about it at some length. We continue to see evidence that our organisation remains challenged in this area. It's as though not everyone has the same understanding of what each of the PLICIT Values means. With the overhaul that's likely for our military justice system, we have a great opportunity to address the issues of fair play, justice and so on that should underpin our organisation and to reinvigorate our approach to Values. CDF and I are as one in asking more of all of our senior leaders in this area.

And third, we still have much to do in regards to Defence Renewal. I've talked a lot in the past about the renewal, refreshment, or regeneration of our management. That's what I've called practical renewal. But we also have a lot to do in the area of cultural renewal.

And I was prompted to think more about this again after reading the Mick Palmer report on DIMIA. It drew attention to a number of questions that we should ask about our own organisation, our own organisation as a whole as well as our own particular work units, command units, branch, division whatever they are.

The issues that Palmer flags in DIMIA are not unique to DIMIA. Questions like:

• Is our culture open?
• How do we respond to criticism?
• Are we unduly self protective, defensive, do we assume that our critics, and there are plenty of them, are all wrong and misinformed or ill-intended?
• Or do we listen and say "Well, if there's that much criticism around maybe there's a point here?"
• Do we admit to errors, learn lessons and address them, or do we go into denial and worse, try to finesse our reporting of failures and put a spin on them?
• Are we complacent?
• Do we remain sensitive to changes in the environment in which we work, and work to be flexible and ready to change in response to them?
• And are our leaders sufficiently informed? Or do we still give them unpleasant surprises?

I'd ask you today to think about and consider how well your office or command or unit, or branch or Division stacks up. If we could measure up on all of those criteria, then we'd be a genuinely renewed organisation. Our Government, and particularly our own Defence people, want that of us.

An abridged version of the Secretary's address to the Senior Leadership Group at the Recall Day.

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