I want to talk to you today about the diarchy – the dual leadership of the Australian Defence Organisation by the Secretary of the Department of Defence and the Chief of the Defence Force.

This is an important subject, because how CDF and I work together has a major bearing on getting the most effective combat capability possible from the dollars that are made available – our core responsibility to the Government and, through it, to the people of Australia.

An obvious first question is what does diarchy mean? The Macquarie Dictionary refers to it as "…power (is) vested in two rulers or authorities."

Clearly, the CDF and I are not "rulers" in the usual sense of those words. In our system of government, the Portfolio Minister, the Hon John Moore, is responsible for the control and administration of Defence. As the Defence Act clearly states, the powers vested in the Secretary and CDF are "exercised subject to and in accordance with any directions of the Minister." No one should be in any doubt about who the boss is!

That said, the term "diarchy" provides a useful term for characterising what is an understandably rare organisational construct.

In our case, administration of a Commonwealth Department of State and command of the Defence Force is brought together in a single entity we call the Australian Defence Organisation.

I can think of no other comparable public entity in Australia. Like the US, UK and Canada, and some other Commonwealth countries, the Australian system derives from the Westminster system (or as some fans of "Yes Minister" say the Westminister system!). As far as I know, every Western democracy has this separation of powers and responsibilities.

It’s useful to reflect on how the diarchy came about. Obviously, I can’t cover every twist and turn over the years – otherwise, we’d be here all day. What I will do is focus on major issues that arose specifically in regard to the diarchy. This approach provides some rather nice insights into what the diarchy means and how it works.

Before doing so, however, I would like to make a couple of observations.

The term "diarchy" emerged shortly after the substantial reforms to Defence administration in the 1970s. In this address, I want to try and put some misconceptions about the diarchy, which have persisted and flourished, conclusively to death.

To see the diarchy as being about balancing power – or as some perceived it in the 1970s and 1980s as a power struggle between the civilian and military sides of the house – fundamentally misses the point in my view.

The Secretary and CDF, by legislation and Ministerial directive, have separate and joint responsibilities that they carry out under the policy direction and authority of Ministers and the Parliamentary Secretary.

The diarchy is not about striking a balance between "opposing powers". It is about bringing together the responsibilities and complementary abilities of public servants and military officials, to achieve the Defence outcome sought by the Government of the day. Those complementary abilities are about, on the one hand, giving the CDF unfettered focus on the command of the ADF and, on the other hand, allocating clear responsibility to the Secretary for the resource, policy and accountability functions of the largest Department of the Commonwealth Government.

The second observation is that the diarchy emerged during, and was shaped by, a time of fundamental change in our approach to Defence. Since the late sixties, we have moved from concepts of forward defence, which still saw our forces as primarily slotting in to those of our allies and close friends – to our present-day self-reliant defence posture, based on employing joint forces to protect our country and its interests.

No longer will Australia be sending expeditionary forces abroad in the way that we used to in support of our major allies, largely as the price for our defence. We are first and foremost our own caretakers. We do not anymore buy hardware designed for the rolling plains of Europe purely because we might be called upon to use it there. We have developed our own military doctrine, our own equipment needs consistent with our international obligations and our own, mature assessments of our national interests. The Guam Doctrine of 1969 was compelling in its strictures about national self-reliance.

This profound change in strategic direction influenced more than just the structure of Defence as regards the relationship between, and integration of, civilian and military personnel. It also fundamentally recast command responsibilities between the CDF and the Service Chiefs. And it required a Secretary whose responsibilities could focus on the policy and resource aspects of an independent Australian defence position developing a self-reliant national defence posture.

Turning to the evolution of the diarchy.

From the Second World War through to the early 1970s, Defence was a group of separate Departments – each with its own Minister and Secretary, plus the three Service Chiefs and their Service Boards.

The first stirrings of the diarchy can be traced back to the Morshead Committee in 1957. One of that Committee’s key recommendations was to amalgamate the existing Departments of Defence, Navy, Army and Air into one Department headed by a single Minister - as a way of building a more cohesive defence policy process.

The Government of the day decided not to take this step. But Prime Minister Menzies did issue a directive establishing the overall authority of the Minister for Defence and his Department in determining national defence policy. Menzies also created the position of Chairman of the Chiefs of Staff Committee, to try and strengthen coordination in the Defence Force.

This reform was aimed at getting the Services to focus on the equipment and training required in accordance with the officially endorsed strategic assessment.

These initiatives, however, were less than successful when measured against the statutory authority of the individual Service Ministers, the Chiefs and the Service Boards – and the resources at their disposal. And whatever virtues the three separate Service departments, their statutory military management systems and a Defence Department had in much earlier years, one must suspect that, even in the late sixties, the pursuit of Defence policy objectives must have been rather like having an affair with an elephant – much muscular activity but only frustration.

In 1968, Defence Minister Fairhall created the Joint Staff, made up of military and civilian officers, to provide policy support to the Secretary, the Chiefs of Staff Committee (COSC) and its Chairman. This move was aimed at strengthening policy advice and planning at the centre and bringing combined expertise to the defence task.

When combined with the introduction of five year programming, it was hoped that the Minister for Defence would have the practical means of getting the Single Services to conform to a single defence policy. The Minister, Malcolm Fraser, said "We need to ensure that each of the Services prepares for the same kind of conflict in the same places and in the same time scale." This did not succeed in Fraser’s short term and his successors did not pursue the matter.

By the late 1960s – early 1970s, then, there was a growing perception that Australia’s defence arrangements could be substantially improved, and that our changing strategic circumstances warranted such an improvement. Each Service was still preparing for the war that served it – arguing for carriers, an army of 60 000 supported by tanks, and air superiority fighters.

Of particular note here is that Australia’s involvement in the Vietnam War had exposed the inadequacies of our defence policy and higher command arrangements. We fought a long and complex war without an overall commander, with no strategic-level headquarters, and with a staff structure that was incapable of dealing effectively with the complex policy issues that continually arose. The use-by date of the departmental arrangements that had served Australia for decades had clearly been passed.

The diarchy had its true genesis in the "guiding principles" laid down in December 1972 by Minister for Defence Lance Barnard when he directed Sir Arthur Tange, the then Secretary of the Department of Defence, to report on reorganising the Defence Group of Departments.

Barnard tasked Tange with providing a blueprint for merging the Service Departments - and, in the event, elements of the Supply Department - into a single Department of Defence. The Government wanted to strengthen central control of resources applied to Defence – dollars, people, equipment and services; and put in place "more effective central control of operations and related military activities".

In the "guiding principles", Barnard stated that the Secretary of the Department of Defence would be "the principal adviser on policy, resources and organisation", and the Chairman of the Chiefs of Staff Committee "the principal military adviser", to the Minister for Defence.

The Minister now had two principal advisers, albeit with clearly distinct roles, and here we see the foundation stones for the subsequent evolution of the diarchy.

Tange went further by recommending creation of a new Chief of the Defence Force Staff (CDFS) as a statutory position, responsible direct to the Minister for command of the Defence Force. Sir Arthur wanted to guard against a situation where lack of authority over the three Services could frustrate the conduct of joint military operations, and inhibit a unified Defence focus.

A key objective was to create a clear line of accountability to the Minister in place of the system of multiple responsibilities between three star and two star officers. For example, the Chief of Naval Staff was not responsible for events and/or accidents in Navy as he did not command the Navy. A Naval Board of four serving officers plus a civilian (presided over by the Minister for the Navy at those meetings he attended) commanded the Navy, so no one person was ultimately accountable.

The wider significance of this should not be understated. As then Brigadier, later CDF, General John Baker, observed in 1988, "reorganisation had as one of its primary features, change to the higher command arrangements." The CDFS "for the first time was given command of the Defence Force for all joint and combined operations." Baker understood that command by committee just does not work, and that joint operations were the way of the future.

As for the Secretary, Tange believed that position should have the powers and duties of a Permanent Head under the Public Service Act, "subject to certain important accompanying arrangements" – a most important qualification.

Without going into detail, these arrangements defined the responsibilities of the CDFS, Service Chiefs and those jointly held by the Secretary and CDFS. They also involved what became known as the "joint process" – whereby civilian and military staffs were made responsive, as appropriate, to each other; and military officers were integrated into various parts of the Department, some being "two-hatted", with responsibilities to both the Secretary and a Service Chief.

Most of Tange’s recommendations were accepted by the Government. They were given effect in legislation and a set of Ministerial directives.

Again, I don’t propose to go into the detail. But the most significant changes to the Defence Act were to give the CDFS command of the Defence Force, and to make the Secretary and the Chief jointly responsible for "the administration of the Defence Force", except for matters falling within command or as specified by the Minister.

The Tange reorganisation was the subject of some criticism at the time, including an alleged lack of clarity between "command" and "administration" of the Defence Force, and for giving insufficient weight to professional military judgment in decision-making processes. As a matter of whimsical history, I am told that "administration" was chosen not for its breathtaking accuracy but because the English language does not have a more definitive term. But importantly, it in no way compromised the essential meaning of "command".

As I understand it, Sir Arthur declined to define command and administration on the grounds that definitions create boundaries around which disputes can arise. He believed it was better for the concepts to be undefined, with the balance of influence between the Secretary and CDFS to shift depending on circumstances; for example, towards the CDFS during operations and towards the Secretary during budget processes. His key was reasonable people working together for a common cause.

As was pointed out at the time, definitions of command did not embrace the civilian activities associated with programming, helping and advising the Services to sort out their competing claims within the Government’s expenditure limits, and producing capabilities that conformed to the strategic assessment.

The changes also generated a fair amount of friction within the newly created Defence organisation. Not just between civilian and military policy staffs at the centre, but also between the centre and the Service Offices – with charge and counter charge of self-interest, lacking professional military judgment, ignoring guidance, simplistic analysis, ill-considered decisions, and hidden agendas.

During the 1980s, there were two major reviews of the Defence Organisation as a whole

• one commissioned by the Government, reporting in 1982 and usually referred to as the Utz Review, after its chairman, John Utz (but which also included a retired CDFS as a member of the Committee);

• the other conducted by the Joint Committee on Foreign Affairs, Defence and Trade which reported in 1987.

Both set out to assess the suitability of the Defence Organisation for meeting the Government’s defence objectives.

Neither review saw anything to be gained by returning to the pre-Tange arrangements. Both responded to the on-going tension and friction that followed the mid-seventies reforms, but with different recommendations.

Utz concluded that substantial improvement had occurred in the development of cohesive defence policy and that the basic organisational framework was sound. Utz did not propose any major restructuring other than in regard to setting up the new – and short-lived – Department of Defence Support.

The Committee rejected proposals by various senior military officers to shift responsibilities, particularly in regard to strategic policy, force development, personnel and logistics policy, from the Secretary to CDFS, taking the view that this went beyond command responsibilities into Defence’s place in the wider business of Government.

Utz equally rejected proposals that would have circumscribed CDFS’s authority and meant a return to the less than satisfactory collegiate arrangements that existed before Tange.

The Committee did propose some clarification of formal responsibilities in new Ministerial directives. These were issued in 1985, following creation in the previous year of the Chief of the Defence Force. The new directive to CDF expanded on his responsibilities relating to command and for providing advice on strategic and capability issues.

The Utz Committee endorsed the "joint process", as it saw effective Defence administration as requiring "a collaborative and consultative relationship" between the Secretary, the CDFS and their subordinates. This, in turn, rested on those "responsiveness" mechanisms originally outlined by Tange.

The Committee regarded the criticisms made to it as reflecting not so much defects in structure or formal organisation but "either poor management practices and working habits, or misunderstandings by members of the Department and the Defence Force about their respective roles in the formulation of defence policy."

Utz saw no better way of addressing this than an exhortation, one that still rings true today – that the cohesion of an organisation rests on "a need to foster in a positive sense a corporate philosophy shared by all those in positions of authority and responsibility." This went to an understanding of the respective roles and contributions of the civilian and uniformed sides, and to explaining the "how" and "why" of the collaborative mechanisms.

The 1987 Joint Parliamentary Committee report reached some notably different conclusions.

The Committee was critical of the diarchy, seeing the separation of military and civilian staffs as causing confrontation and bargaining in policy processes rather than cooperation and collaboration.

Evidence of continuing rivalry and dissension pointed to a basic disagreement over the division of responsibilities, not helped by uncertainty over what was meant by "command" and "administration".

While the Secretary and CDF were ostensibly equal, the Committee saw the "balance of power" – their words, not mine – as being tilted in favour of the civilian hierarchy.

The Committee proposed that, as commander of the "operational element", the CDF should have primary responsibility for developing and implementing defence policy, and the day-to-day management of defence activities.

The Secretary would have an "enabling" role. He would assist the Minister in setting out the parameters within which the CDF would work. He also would ensure that this happened within the resources allocated and in accord with overall government policy. (This became the basis for the New Zealand model.)

Down the track, the Committee favoured moving to a single, unified higher defence organisation under one individual.

The Government response rejected these findings. (But it supported others I haven’t spoken about, such as those seeking to strengthen the joint focus of the ADF.)

The Government was critical of "the fixation on who has power to do what". The CDF and Secretary exercised their powers at the direction of the Minister, and that was that.

It was satisfied with the existing division of responsibility between the Secretary and CDF. Importantly, the Minister, Kim Beazley, expressed the view that "comprehensive and objective advice" could not come solely from the Department or the Defence Force. The only feasible way to get it was through a joint process.

The Government did not give a definitive response on the Committee’s proposal for a fully integrated organisation. But it did say that the Australian Defence Organisation should evolve to meet our unique circumstances. And it observed that models that had developed overseas – in the UK, Canada and US – all contained a military/civilian diarchy.

As alluded to earlier, it’s important to remember that the diarchy is not just about the civilian-military interface in the Defence organisation. It is also shaped and influenced by interfaces within the military.

Quite fundamental changes were occurring in the mid to late 1980s in respect of CDF’s place in the diarchy vis-à-vis the Service Chiefs.

The importance of building a unified command structure, focussed on the conduct of joint operations, was highlighted in several reports at the time. These included the 1986 Dibb review of Australia’s defence capabilities; the 1988 Baker study of ADF command arrangements; and the 1989 Sanderson review of higher ADF staff arrangements.

Joint operational commands – maritime, land and air – were created directly under CDF’s command for the conduct of operations. CDF also gained additional staff to enhance his capacity to undertake integrated military planning.

After the 1987 Joint Committee report, the diarchy was not addressed directly in a major defence review for the next ten years.

The friction that had been evident for much of the seventies and eighties was on the wane – due in part to the ascendancy of joint force concepts; to key players taking a more consensual approach (and being carefully chosen to do so); and to the pressure of more demanding issues. The destructive confrontation that sometimes occurred prior to this period, masquerading as "creative tension", owed more to personalities than structure in my view.

Certainly, the focus of attention shifted from how Defence was organised, to how to get maximum capability within increasingly constrained resources.

In October 1996, Minister for Defence Ian McLachlan established the Defence Efficiency Review to reform Defence’s management and financial processes.

The Review Panel started with a hard look at the diarchy. Although they didn’t say as much in their report, I suspect the private sector members of the Panel commenced their deliberations on the assumption that a business can’t be run by two bosses!

The Review report found that the diarchy slowed decision making and called for "compromise…great consideration and tolerance to work well". By the same token, it recognised that there was logic in separating military command from departmental administration. The benefits of both military and civilian input to strategic policy formulation and resource allocation were also acknowledged.

The Panel saw no way for making either the Secretary or CDF senior to the other, because of their particular responsibilities and expertise. In the same breath, they cautioned that consensus should not be sought at the expense of vigorous debate, clear decisions, and clear responsibility and accountability.

To this end, the Panel proposed making much clearer the separate and joint responsibilities of the CDF and Secretary through new Ministerial Directives.

A final point of relevance to the diarchy from the Defence Efficiency Review: the Secretary and CDF are unambiguously in charge of the Defence Organisation. To underscore this, and remove confusion that had built up over time about the role of the Service Chiefs, the Panel recommended that their new directives be issued by the CDF, and not the Minister as had been the case previously.

I have taken some time to describe the evolution of the diarchy because it has been – and remains – central to the leadership and direction of the Defence Organisation and how it is perceived.

This retrospective view, of course, is coloured by today’s perspective. Those senior people who were closely involved in the past may very well have quite different views. But it is how we see it now that shapes our future heading.

Which brings me to the question: "where do we stand now with the diarchy?" The first thing is to recognise the separate and joint responsibilities that CDF and I have. I haven’t gone into all the nuances of how these have shifted over time. What matters is what they are now. And that is:

As Secretary, I am the principal civilian adviser to the Minister – that hasn’t changed since 1972.

I am responsible for

• the efficient and effective administration of the Department;
• managing Defence resources;
• ensuring that corporate functions – such as capital acquisition, Defence science and technology, facilities, financial management and audit – are provided in support of the ADF; and
• ensuring that all processes under my direction accord with statutory requirements.

The management and resource responsibilities I exercise have their basis in law in the Public Service Act and the Financial Management and Accountability Act.

I also have to ensure that all Departmental staff are responsible and accountable to the CDF for those responsibilities he exercises under the Defence Act. The CDF has a similar responsibility. I would add that this very much reflects the "responsiveness" mechanisms that Tange spoke of and Utz endorsed.

As to the CDF, he is the principal military adviser to the Minister.

He is also responsible for

• exercising full command of the ADF;
• ensuring the Services are capable of providing joint forces for military operations;
• ensuring that the ADF is efficient and effective;
• submitting proposals for promotion to One Star and above, after consultation with the Service Chiefs and me; and
• establishing effective relationships with the leadership of other Armed Forces.

We have joint responsibilities for the administration of the Defence Force; for strategic assessment, long term capability planning that conforms to the Government endorsed strategic assessment, providing intelligence, and effective liaison with other departments on national security matters.

What all this tells me is that, with a function as big as Defence, it doesn’t make sense to try and do each other’s job – or to waste our people and resources trying to do that. We have to meet those separate responsibilities – we expect to be held accountable for that.

There are also important areas where we need to work jointly to progress Defence business. To do that, CDF and I need to be able to draw on the expertise and advice we need from all parts of the organisation.

East Timor has provided a further practical test of operations, showing just how far we’ve come on integration and jointery. We are putting a lot of effort into the lessons we’ve learned from that experience in shaping command arrangements, doctrine, logistics support and other ways in which we conduct our business.

Most evident in the seventies and eighties, but still lingering on today – is the view that civilians interpret civil control of the military as civilian control. That public servants use the bureaucracy to, in some way, frustrate what are perceived by some as the proper responsibilities of the military. This is not the view of senior executives in the Department; nor is it the view of senior Defence Force officers.

My response is that no informed person in Defence would dare presume to take on the mantle of Ministerial authority. This assertion also ignores the fact that the Defence bureaucracy – with its processes, procedures, regulations, committees and so on – is just as much military as civilian. Civil control means control by the Minister for Defence and the Government – it’s as simple as that.

To fight, and more importantly, to win is at the heart of the ADF’s purpose in life. But successive Governments have recognised that there is much more to the defence of the nation than simply that.

As Tange, Utz and others have quite rightly observed, Defence engages wider national interests – in the proper use of public resources, industry and infrastructure, science and technology, national security and foreign relations – where civilian responsibilities and expertise are to the fore. And at a practical level, we would also not want to waste scarce and costly military talent on functions that civilians are better placed to perform.

In wartime, if it came to that, the Government would want the Defence Force to concentrate on fighting, not trying to run a Department of State. The civilian side would be focussed fully on supporting the ADF in operations but I doubt very much that the fundamental responsibilities of the Secretary and CDF would change – if anything, they would become even more focussed on policy and command respectively.

As for arguments about the difficulty of separating "administration" from "command", I can do no better than quote General Baker from his 1988 study:

"Distinction is made between the departmental processes for seeking and allocating resources and the command of those resources once made available to the ADF. Once available, the resources are directed through joint and single Service command channels to meet the CDF’s requirements."

There continues to be some debate about the roles and responsibilities of the Service Chiefs. As I see it, they have three key roles. First, they are the naval (army, air force) adviser to the CDF; second, they are the navy (army, air force) capability manager for their output (ie the force element groups that they are responsible for, including raising, training, introducing and sustaining the equipment and personnel associated with the force element group sub-outputs); and third, they are the Chief of their Service, responsible for their tribe and all that involves in terms of ethos, morale etc. They have clear and collective corporate responsibilities to me and CDF.

There are, of course, other views. Some (mainly military or ex-military) argue that CDF should clearly be primus inter pares while others (mainly civilians) say that the Secretary is and should be the de facto Chief Executive Officer.

At the end of the day, it’s what the Minister for Defence and Government thinks that matters. The Minister for Defence can explicitly effect and affect the balance between the Secretary and CDF through the Directives he can issue under Section 9 of the Defence Act.

No organisation can mark time. As you probably know from media reporting, CDF and I are planning some significant changes in the way the Defence Organisation is structured and operates – an entirely new corporate governance framework, following consultation and approval by the Minister for Defence.

As our history has shown, structural change can only take us so far. How we work together is what matters most. We have to recognise the abilities of others and the contributions they can and should make.

We must ensure that those who have a stake in an issue are heard. But that doesn’t mean getting bogged down in consensus-building or nugatory committee meetings with no clear direction. Too often that leads to indecision. Those who are responsible must make the tough choices.

Our people – military and civilian – have different backgrounds, experiences and aspirations. There will always be an element of "creative tension" in Defence. What we have to do is harness and channel that to get the results that the Government through our Ministers and Parliamentary Secretary demand of us.

At the same time, we have to ensure that our military people are trained for the defence force of the future, where our ability to conduct joint operations will be critical to combat success. The setting up of the Australian Defence Force Academy was an important step in getting our new officer entrants to think and work in an integrated environment. We will take another big step in 2001 when our separate staff officer training is combined into the first Australian Command and Staff Course at the Australian Defence College.

Central to our success is our willingness and ability to adapt our thinking and our structures to meet rapidly changing world circumstances. There is no place for atavistic reminiscence about organisational arrangements. The advice which we provide to government must recognise a rapidly changing global society – not solely in countries’ military capability but in social, economic and political developments which determine the place of our military in terms of our overall public policy objectives. The successful military officer and the successful Defence public servant will search out innovative, resource and people-effective measures and apply intellectual acuity to deal with a dynamic and demanding world. Each will recognise the professionalism of the other. Just as the military is rich in tradition and deservedly proud of its history, its achievements, its heritage and its bravery, those who have chosen civilian public service are justified in their inconspicuous, but no less true for that, dedicated contribution to our national well-being.

There may be those who prefer to cherish earlier days when the military defence of Australia was a photocopy of Empire ambitions. They might reflect upon an aphorism of which the Irish are so fond: Nostalgia aint what it used to be.