Principles and Objectives

• The 70 findings and recommendations of the report of the Defence Efficiency Review are to form the key objectives of the Defence Reform Program.
• The Defence Organisation is to be structured for war and adapted for peace.
• The reforms are to act as a catalyst for substantial cultural change, away from the present preoccupation with current activities, cash and inputs, and towards management which addresses future requirements, priorities and outputs.

• The diarchy of the Chief of the Defence Force (CDF) and the Secretary of the Department of Defence will be retained, with responsibility for the overall direction of the Defence Organisation through the exercise of their single and joint responsibilities under legislation and Ministerial Directives.
• Revised Ministerial Directives will be issued to the CDF and the Secretary and CDF will issue Directives to each of the Chiefs of Services on their policy, command and corporate and management responsibilities.
• The Chiefs of Service will have an enhanced role in policy development at the strategic level.

• ADF Command arrangements, including the Commander Australian Theatre (COMAST) organisation will be implemented to enable the operation of ADF elements as Joint Forces. 
• An ADF Command Centre will support the CDF in the strategic command of the Defence Force.
• The Chiefs of Service will command and be the professional heads of their Services.
• COMAST will exercise joint operational command of the ADF, where necessary through a deployable headquarters and/or Headquarters Northern Command (NORCOM).

Defence Headquarters 

• There will be an integrated joint Defence Headquarters Staff under the direction of the Deputy Secretary Strategy & Intelligence and the Vice Chief of the Defence Force. The Defence Headquarters Staff will provide strategic policy and planning support to the CDF and Secretary.
• There will be a whole-of-Defence approach to longer term planning, capability development and acquisition. Committee structures will be revised accordingly.
• The Chiefs of Service and their immediate policy and management support staff (limited to 100 for each Service) will be included in the organisation of the Defence Headquarters Staff.

• The identities of the single Services and their individual, unit and formation competencies will be preserved.
• Single Service Programs will be retained with Executive, Combat Forces and training Sub-Programs.

• The Defence Signals Directorate, the Defence Intelligence Organisation and related integrated support services will form a separate Intelligence Program under the direction of Deputy Secretary Strategy and Intelligence on behalf of the Secretary and CDF.

• A joint Support Command (COMSPT) will direct, rationalise and, as appropriate integrate the base logistics and engineering support functions of the existing single Service Logistics and Support Commands.
• A Head of Joint Training and Education will direct the development and implementation of joint and integrated Defence training and education policy, and the rationalisation of officer education and common technical training.
• Training Commands will remain in each of the Services to undertake single Service specific training and tri-Service training as appropriate.
• A single Personnel Executive will be established to achieve increased commonality, integration and efficiency in the personnel management and administration of Defence Force and civilian personnel. Service career management decisions, other than for the most senior positions, will remain within the Services.
• The requirement for the Division Head responsible for civilian personnel matters as part of the Personnel Executive will be reviewed in two years following the implementation of current Public Service and Industrial Relations reforms.
• A single Defence Health Service will be formed as part of the Personnel Executive.

• The Acquisition organisation will be collocated and reorganised into functional groups focusing on common industry sectors or equipment types rather then being divided by Service. There will be integration of industry specialists with these functional groups. There will be a substantial progressive reduction in military staffing.

• The Science and Technology Program will be retained, with the Chief Defence Scientist as head of the Defence Science and Technology Organisation.

• The responsibilities of the Deputy Secretary Budget and Management position will be revised to include assistance to the Secretary in the management of the corporate management and support organisations set in place by the Defence Reform Program.
• A Defence Estate organisation will be responsible for the management of all Defence land and building assets, capital facilities projects and the accelerated rationalisation of existing assets.
• Operational and Corporate Information organisations will be responsible for information management policy and planning and the rationalisation, development and management of information technology and communications systems. An integrated Defence Information Organisation will be established in the medium term.
• A Corporate Support organisation will be responsible for the rationalisation and customer focused delivery of cost-effective central, regional and base administrative support across Defence, and the provision of an integrated joint Legal service.
• A Chief Finance Officer and the Inspector-General will provide respectively corporate resource and accounting management and systems, and independent audit and evaluation. These functions will be managed as a Finance and Evaluation Program. The Inspector-General will report directly to the CDF and Secretary on audit, fraud and performance evaluation matters.

• A chart of the restructured Defence organisation is attached.

• One-off savings in excess of $500m from the rationalisation of Defence facilities and stock holdings.
• Mature ongoing annual redirection of resources of at least $770m with the objective of rising to a target of $1000m. These resources will come from the elimination of duplication with associated personnel reductions, the streamlining of processes, a more coordinated use of information technology and the more aggressive pursuit of market testing.
• Net funded reductions of some 3,100 civilian and 4,700 military positions will be required over the next three years. About half of these military positions are expected to be redirected to combat and combat support areas. These reductions represent 8 per cent of the full-time military and 15 per cent of the full-time civilian positions as at 30 June 1996.
• A further 7,000 military and 5,900 civilian positions will be subject to market testing through an acceleration of the Commercial Support Program.
• Senior positions (Colonel [Equivalent] and 1 and 2 star, and Senior Officers A & B (and Equivalents) and SES) are to be reduced by the order of 20 per cent as part of these personnel reductions and market testing initiatives.
• Every effort will be made to continue Defence practice of reducing personnel numbers through redeployment, natural wastage, constrained recruitment above base level and as necessary, managed voluntary redundancies. The possibility of involuntary redundancies cannot be excluded. As with previous initiatives, central redeployment and placement processes will be established to assist potentially surplus staff.
• As part of the implementation of these reforms, early action is to be taken to negotiate productivity-based agency agreements for both the Defence Force and the civilian personnel of the Department of Defence (incorporating individual Australian Workplace Agreements as appropriate).

• Many of the major reform initiatives involve the rationalisation of common support and administrative functions and activities which are conducted across Australia. Until the planning for this rationalisation process is more advanced, it is not possible to provide reliable estimates of employment impacts on a State or regional basis.
• More significant reductions are most likely in those areas which have concentrations of logistics, support, training and administrative functions, while areas with concentrations of combat forces are likely to see increases in activity levels and some employment.
• The proposed rationalisation of headquarters and central management organisations will have a more direct impact on Canberra. Preliminary estimates suggest a longer term net reduction of some 1,500 positions from the current 12,000 Defence personnel in Canberra.

• The Chief of the Defence Force and the Secretary of the Department of Defence are responsible to the Minister for Defence for the implementation of the Defence Reform Program. Regular reports on progress will be provided.
• Progress with implementation will be centrally monitored with benchmarks being established against the 70 findings and recommendations of the Defence Efficiency Review.
• The basic framework of the restructured Defence Organisation will be reflected in the 1997-98 Defence budget allocations and will be in place on 1 July 1997, together with initial implementation plans.
• Commanders and managers will be responsible for the development of more detailed plans for progressive implementation over the next two to three years.

See also:

• Defence Efficiency Review Report
• Other Media Statements and Speeches
• Defence Home Page