Richard Farmer’s Chunky Bits, Item 15, yesterday, makes a good point in principle about the need to reconstruct the Department of Defence in detail. But in recommending Allan Hawke, a former secretary of that department, to do it (perhaps tongue in cheek) Farmer misses two salient points. First, the department under Hawke remained thoroughly unreformed to say the least, and it was a previous secretary, Sir Arthur Tange, who created the bureaucratic monstrosity in the first place when given sole and unimpeded power to do so by Gough Whitlam.

The clear lesson (as with the recent Henry review of tax policy) is no head of a department (or former head) should ever be given sole or primary responsibility to review his or her own departmental structure, role or major policies.

On the broader subject of actually reforming the Department of Defence, this needs to start with a genuine first-principles review of its constitutionality, purpose and structure. It also needs to include re-instituting the appropriate constitutional relationship between ministers and the ADF (civil control of the military), and re-inforcing the appropriate professional relationship between the ADF and the Public Service — which is often institutionalised cultural poison under current structural arrangements.

Those who disagree with such a first-principles approach need to ponder three key questions left hanging by the 12 odd reviews of the department instituted since 1981 (following the amalgamations in 1974 there was a seven-year cooling-off period). First, why have so many reviews been needed (at fairly regular 2-3 year intervals)? Second, why do they keep being needed? Third, why have none of them ever solved the fundamental problem of ever-increasing departmental unaccountability despite every one of them claiming all the problems had been found and would be fixed?

Richard notes that Defence has grown into a “giant beast [that] has become wastefully unmanageable” since its incorporation of the three service (and supply) departments in 1974. Defence now has 13 deputy-secretary equivalents, up from four in 1997 and one in 1974. This is a bureaucratic record in Australia. It also now has a desk-bound public service strength many times larger than 1974 (as the 1974  total included the thousands of workers in the then Defence-owned factories and shipyards). The public service strength is now half as big again as the NSW Police Force and little short of the total size of the regular Army. While the defence force is some 30% smaller than in 1991, and 50% smaller than in 1974, the Department of Defence has kept growing, uncontrollably, into a gargantuan, top-heavy, tortuous, ponderous, self-regarding and unresponsive bureaucracy with institutionalised, insufficient, ministerial supervision structurally and numerically.

Assuming Farmer’s quip about reverting to four or five separate departments to be said in jest (because this should not, nor can be done), there are still some constitutional and practical lessons from that era, and from modern comparative practices overseas, that are worth examining and/or  instituting and reinstituting.

First, proper civil control of the military in a democracy (rather than constitutionally inappropriate control by civilian bureaucrats) means Defence always needs at least three full-time ministers. There needs to be integrated civil control by a senior portfolio minister assisted by two junior ministers; one supervising the defence force and the other the Defence Materiel Organisation (DMO) and the Defence Science and Technology Organisation (DSTO), following the UK model. None of them should have any other permanent or temporary ministerial responsibilities such as the veterans affairs portfolio (Bruce Billson, Warren Snowdon, etc) or helping fix stuff-ups in the Department of the Environment (Greg Combet)

Second, the department should be run by a statutory board answerable to Parliament as the three Service departments and the Supply Department (sort of like the DMO) were before 1976. There were no serious procurement stuff-ups caused by mismanagement under the old boards because someone, including ministers, was always accountable and made sure of it. As with the old boards, the ministers should be full members not pop-in visitors (indeed the Minister for the Navy chaired the Naval Board). Other members should be the CDF, VCDF, Service Chiefs, the Chief of Capability Development, the Secretary and the Chief Finance Officer. Two or three outside members from commerce (who were not retired ADF officers or public servants) would also help.

Third, a solid look needs to be taken at Defence’s unique, two-boss, diarchic structure, which no other governmental or commercial organisation in Australia,  or indeed elsewhere, has ever copied. Not least because  it doesn’t work despite every review since 1981 saying it is finally fixed. Moreover, even allowing for the differing strategic responsibilities, force and population sizes, for example, the NZ method of formally separating the defence force and the department (under the same minister) has resulted in much smaller and leaner defence force headquarters and department than in Australia.

No objective review of the diarchy is likely to recommend its retention. None of our other federal or state uniformed services (police, fire, emergency, customs, etc) or security agencies have diarchies in control. Even though nobbled by her restricted terms of reference, the last review of Defence led by Elizabeth Proust in 2007 recommended that if the diarchy was to be retained, then real accountability meant the respective responsibilities of the CDF and the Secretary needed to be defined in detail so that joint responsibilities and therefore the risk of institutionalised unaccountability (both structurally and culturally) would be minimised or abolished. Guess which two of the review’s 52 recommendations were rejected by the Defence hierarchy?

Picking an objective review team will be part of the solution as will it having broad, first-principles, terms of reference. Why not Elizabeth Proust again, assisted by Professor Peter Leahy from the University of Canberra (a former Chief of Army) and Dr Mark Thomson from the Australian Strategic Policy Institute (a former Defence scientist and the only person in the country who fully understands how Defence’s finances work and should work)?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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