ISSUE 3 | 2012
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Cover Story

Challenging Budget drives reform

by Alisha Welch

The 2012-13 Federal Budget announced on May 8 will have significant and challenging implications for Defence and its people.

DEFENCE will contribute $5.4 billion to the government's fiscal strategy across the Forward Estimates, including $971 million in 2012-13.

In total, the Defence Budget for financial year 2012-13 is $24.188 billion.

There will be no adverse impact on operations in Afghanistan, East Timor or Solomon Islands, and the provision of equipment to Defence people on operations will not be affected. Likewise, there will be no reduction of military personnel.

In a statement to the Defence workforce, the Secretary of Defence, Duncan Lewis, and Chief of the Defence Force, General David Hurley, outlined the changes people can expect in light of the Budget announcement.

They say a number of reductions to the Defence Budget will affect many aspects of our business, including the Defence Capability Plan, the Approved Major Capital Investment Program, the Major Capital Facilities program, administrative support, and the number of public servants working for Defence.

"Reductions in public sector spending are necessary to meet the government's budgetary targets, and government expects Defence to contribute to its share of savings," the Secretary and CDF say.

A number of considerations informed the Secretary and CDF's response to the Budget.

"We are extremely conscious of not repeating the past by creating a hollow organisation that is incapable of supporting the ADF in its business at war and peace."

In order to meet savings targets, Defence's public service workforce will decrease by 1000 positions.

"This will be achieved through natural attrition to the greatest extent possible," the leaders say.

"The reductions will be taken across all levels of the public service, including the Senior Executive Service. As we do each year, there will be some very limited and targeted voluntary redundancies considered. We do not, at this time, contemplate involuntary redundancies."

According to the Secretary and CDF, the way the Strategic Reform Program was originally envisaged now requires adjustment in light of the Defence Budget.

"The need to pursue deep cultural reform across the organisation has not changed, but we need to adjust our approach to include a real shift in the way we think about the organisation's wider reform agenda, including the recently released Pathway to Change strategy.

"We will also look at changes to Defence's group structure. We anticipate closer integration of the Defence Materiel Organisation, Defence Science and Technology Organisation and the service offices within Defence, and less duplication of systems and functions in all areas."

The Secretary and CDF recognise that the 2012-13 Budget is one of the "toughest financial challenges" for Defence in many years.

"It will impact each one of us in one way or another," they say. "No cuts are easy, but we are convinced that the savings chosen are those best able to be managed and absorbed."