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Section 2report on performance

CHAPTER 3 Outcome performance

Chapter 3Outcome performance

Defence outcomes

Defence achieves its mission through the successful delivery of the six departmental outcomes and one administered outcome.10

The six departmental outcomes are:

Command of operations in Defence of Australia and its interests

Navy capability for the Defence of Australia and its interests

Army capability for the Defence of Australia and its interests

Air Force capability for the Defence of Australia and its interests

Strategic policy for the Defence of Australia and its interests

Intelligence for the Defence of Australia and its interests.

The administered outcome is:

Superannuation and housing support services for current and retired Defence personnel.

10. More information can be found later in this chapter.

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overview of the Defence outcomes anD outputs

Defence outcomes are the results that the Government seeks from Defence, and are achieved through the successful delivery of outputs, to the standards set in the Portfolio Budget Statements 2006–07 and, where applicable, revised in the Portfolio Additional Estimates Statements 2006–07. This chapter outlines achievement against these targets, in both financial and non-financial terms.

The outcome and output structure has remained consistent for 2006–07 and covers 28 departmental outputs and three administered outputs.

Defence’s departmental outcomes exceeded the revised estimate by $731.5m as detailed in Table 3.1. Tables 3.2 and 3.3 show the cost to government of Defence outcomes.

The seventh outcome, ‘Superannuation and housing support services for current and retired Defence personnel’, covers activities not directly connected to the delivery of the capability outcomes and outputs. Outcome 7 and its three outputs are described later in this chapter.

Defence continues to refine its cost attribution rules in order to improve the accuracy of its output costs. There are a number of variables that can influence output costs, including changes to preparedness levels and activity rates, changes to operations, and redirection of funds to meet changing priorities and emergent cost pressures.

Some of the variation evident between the revised estimate and actual result reflects accounting adjustments and refinements to attribution rules.

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Table 3.1—Total cost of Defence outcomes and outputs, 2006–07

Outcome/Output

Budget estimate[1]

($’000)

Revised estimate[2]

($’000)

Actual result

($’000)Variation[3]


(%)

OUTCOME 1: COMMAND OF OPERATIONS IN DEFENCE OF AUSTRALIA AND ITS INTERESTS

1.1 Command of operations 432,842 403,418 415,064 11,646 2.9

1.2 Defence force military operations and exercises 559,667 706,514 850,266 143,753 20.3

1.3 Contribution to national support tasks 21,188 23,823 67,792 43,969 184.6

Total for Outcome 1 1,013,697 1,133,755 1,333,122 199,367 17.6

OUTCOME 2: NAVY CAPABILITY FOR THE DEFENCE OF AUSTRALIA AND ITS INTERESTS

2.1 Capability for major surface combatant operations 1,572,470 1,831,218 1,834,908 3,690 0.2

2.2 Capability for naval aviation operations 597,690 612,033 587,952 -24,081 -3.9

2.3 Capability for patrol boat operations 310,642 247,941 298,674 50,733 20.5

2.4 Capability for submarine operations 724,138 790,227 828,609 38,382 4.9

2.5 Capability for afloat support 295,361 235,230 267,747 32,517 13.8

2.6 Capability for mine warfare 398,607 356,569 361,322 4,753 1.3

2.7 Capability for amphibious lift 422,430 394,313 447,448 53,135 13.5

2.8 Capability for hydrographic, meteorological and oceanographic operations 294,180 218,831 258,225 39,394 18.0


OUTCOME 3: ARMY CAPABILITY FOR THE DEFENCE OF AUSTRALIA AND ITS INTERESTS

3.1 Capability for special operations 534,256 561,801 651,972 90,171 16.1

3.2 Capability for medium combined arms operations 938,457 955,478 905,557 -49,921 -5.2

3.3 Capability for light combined arms operations 977,728 1,006,738 1,014,530 7,792 0.8

3.4 Capability for Army aviation operations 570,665 569,055 580,106 11,051 1.9

3.5 Capability for ground-based air defence 125,526 115,905 104,521 -11,384 -9.8

3.6 Capability for combat support operations 439,935 435,626 435,373 -253 -0.1

3.7 Capability for regional surveillance 156,546 152,728 138,555 -14,173 -9.3

3.8 Capability for operational logistic support to land forces 587,745 579,795 600,158 20,363 3.5

3.9 Capability for motorised combined arms operations 593,810 595,904 679,110 83,206 14.0

3.10 Capability for protective operations 980,216 1,061,933 982,180 -79,753 7.5


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outcome performance : chapter 3

Outcome/Output

Budget estimate[1]

($’000)

Revised estimate[2]

($’000)

Actual result



(%)

OUTCOME 4: AIR FORCE CAPABILITY FOR THE DEFENCE OF AUSTRALIA AND ITS INTERESTS

4.1 Capability for air combat operations 1,593,252 1,587,820 1,749,414 161, 594 10.2

4.2 Capability for combat support of air operations 954,466 933,936 878,282 -55,654 -6.0

4.3 Capability for surveillance and response operations 1,181,018 1,145,121 1,192,709 47,588 4.2

4.4 Capability for airlift operations 1,108,955 886,148 993,332 107,184 12.1


OUTCOME 5: STRATEGIC POLICY FOR THE DEFENCE OF AUSTRALIA AND ITS INTERESTS

5.1 International policy, activities and engagement 179,237 174,960 219,828 44,868 25.6

5.2 Strategic policy and military strategy 45,392 58,527 57,543 -984 -1.7

Total for Outcome 5 224,629 233,487 277,373 43,886 18.8

OUTCOME 6: INTELLIGENCE FOR THE DEFENCE OF AUSTRALIA AND ITS INTERESTS

6.1 Intelligence 466,986 516,073 487,981 -28,092 -5.4

Total for Outcome 6 466,986 516,073 487,981 -28,092 -5.4

NET COST OF DEFENCE DEPARTMENTAL OUTCOMES 17,063,404 17,157,664 17,889,158 731,494 4.3

Approved allocated profit/(loss) – – -667,496 -667,496 –

DEPARTMENTAL APPROPRIATIONS FROM GOVERNMENT 17,063,404 17,157,664 17,221,662 63,998 0.4

OUTCOME 7: SUPERANNUATION AND HOUSING SUPPORT SERVICES FOR CURRENT AND RETIRED DEFENCE PERSONNEL

7.1 Superannuation support services for current and retired Defence personnel 1,963,000 2,051,390 2,094,372 42,982 2.1

7.2 Housing assistance for current and retired Defence personnel -63,912 -65,400 -67,102 -1,702 2.6

7.3 Other administered revenues and expenses -3,000 -4,793 -12,511 -7,718 161.0

NET COST OF ADMINISTERED OUTCOMES 1,896,088 1,981,197 2,014,759 33,562 1.7

TOTAL COST OF DEFENCE OUTCOMES 18,959,492 19,138,861 19,236,421 97,560 0.5 Notes1. Budget estimates are consistent with Portfolio Budget Statements 2006–07 (page 104).2. Revised estimates are consistent with Portfolio Additional Estimates Statements 2006–07 (page 78).3. Variation figures are the difference between the revised estimate and the actual result.

Table 3.1 continued

defence annual report 2006–07 / volume one

chapter 3 : outcome performance

48

SECTION 2

Outcome 1 Command of

operations ($’000)

Outcome 2 Navy

capability($’000)

Outcome 3 Army

capability ($’000)

Outcome 4 Air Force

capability($’000)

Outcome 5 Strategic

policy ($’000)

Outcome 6 Intelligence

($’000)

Total Defence Departmental

Outcome ($’000)

Outcome 7 Superannuation

and housing support services for

current and retired Defence personnel

($’000)Total

($’000)

DEPARTMENTALINCOME

Revenues

Sale of goods and rendering of services 42,519 167,347 250,990 194,432 8,923 10,303 674,514 674,514

Other revenues 2,174 33,046 32,674 25,025 2,067 1,726 96,712 96,712

Total revenue 44,693 200,393 283,664 219,457 10,990 12,029 771,226 – 771,226

Gains

Reversals of previous asset write-downs 16,037 147,057 197,604 72,057 6,495 17,008 456,258 456,258

Sale of assets -85 2,706 1,093 -1,390 113 -667 1,770 1,770

Other gains 388 7,437 8,411 10,945 193 1,344 28,718 28,718

Total gains 16,340 157,200 207,108 81,612 6,801 17,685 486,746 – 486,746

Total income 61,033 357,593 490,772 301,069 17,791 29,714 1,257,972 – 1,257,972

Expenses

Employees 477,956 1,616,597 2,915,935 1,514,291 132,736 238,229 6,895,744 6,895,744

Suppliers 773,051 2,060,956 2,462,274 2,150,739 144,834 209,806 7,801,660 7,801,660

Grants 115 806 1,342 587 90 63 3,003 3,003

Depreciation and amortisation 123,605 1,394,163 913,311 1,156,513 15,438 62,308 3,665,338 3,665,338

Finance cost 1,463 10,680 12,540 12,632 1,039 240 38,594 38,594

Write-down and impairment of assets 17,977 158,755 275,888 274,179 1,558 7,157 735,514 735,514

Foreign exchange loss -26 -38 1,138 -292 -425 -51 306 306

Other expenses 14 559 406 6,157 -108 -57 6,971 6,971

Total expenses 1,394,155 5,242,478 6,582,834 5,114,806 295,162 517,695 19,147,130 – 19,147,130

Net cost of departmental outcomes 1,333,122 4,884,885 6,092,062 4,813,737 277,371 487,981 17,889,158 – 17,889,158

ADMINISTERED

Revenues 790,240 790,240

Expenses 2,804,999 2,804,999

Net cost of administered outcomes – – – – – – – 2,014,759 2,014,759

Table 3.2—O

verall cost to government of D

efence outcomes (departm

ental and administered), 2006

–07

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Table 3.3—Cost to government of departmental outcomes, 2006–07

Budget estimate[1]

($’000)

Revised estimate[2]

($’000)

Actual result



(%)

INCOME

Revenues

Sale of goods and rendering of services 530,482 686,512 674,514 -11,998 -1.7

Other revenue[4] 65,663 66,368 96,712 30,344 45.7

Total revenue 596,145 752,880 771,226 18,346 2.4

Gains

Reversals of previous asset write-downs 200,000 467,350 456,258 -11,092 -2.4

Sale of assets – – 1,770 1,770 –

Other gains – 6,200 28,718 22,518 363.2

Total gains 200,000 473,550 486,746 13,196 2.8

Total income 796,145 1,226,430 1,257,972 31,542 2.6

Expenses

Employees 6,609,082 6,793,492 6,895,744 102,252 1.5

Suppliers 7,649,136 7,786,632 7,801,660 15,028 0.2

Grants 5,592 2,992 3,003 11 0.4

Depreciation and amortisation 3,336,323 3,332,924 3,665,338 332,414 10.0

Finance cost 20,412 20,412 38,594 18,182 89.1

Write-down and impairment of assets 235,000 443,595 735,514 291,919 65.8

Foreign exchange loss – – 306 306 –

Other expenses 4,004 4,047 6,971 2,924 72.2

Total expenses 17,859,549 18,384,094 19,147,130 763,036 4.2

Net cost of all outcomes 17,063,404 17,157,664 17,889,158 731,494 4.3

Approved allocated profit/loss – – -667,496 -667,496 –

DEPARTMENTAL APPROPRIATIONS FROM GOVERNMENT 17,063,404 17,157,664 17,221,662 63,998 0.4

Notes1. Budget estimates are consistent with Portfolio Budget Statements 2006–07 (page 107).2. Revised estimates are consistent with Portfolio Additional Estimates Statements 2006–07 (page 81).3. Variation figures are the difference between the revised estimate and the actual result.4. Other revenues include interest and dividends.



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OUTCOME ONE – Command of Operations in Defence of Australia and its Interests

OUTPUTS1.1 Command of Operations1.2 Defence Force Military Operations and Exercises1.3 Contribution to National Support Tasks

OUTCOME TWO – Navy Capability for the Defence of Australia and its Interests

OUTPUTS2.1 Capability for Major Surface Combatant Operations2.2 Capability for Naval Aviation Operations2.3 Capability for Patrol Boat Operations2.4 Capability for Submarine Operations2.5 Capability for Afloat Support2.6 Capability for Mine Warfare 2.7 Capability for Amphibious Lift2.8 Capability for Hydrographic, Meteorological and Oceanographic Operations

OUTCOME THREE – Army Capability for the Defence of Australia and its Interests

OUTPUTS3.1 Capability for Special Operations3.2 Capability for Medium Combined Arms Operations3.3 Capability for Light Combined Arms Operations3.4 Capability for Army Aviation Operations3.5 Capability for Ground-Based Air Defence3.6 Capability for Combat Support Operations3.7 Capability for Regional Surveillance3.8 Capability for Operational Logistic Support to Land Forces3.9 Capability for Motorised Combined Arms Operations3.10 Capability for Protective Operations

OUTCOME FOUR – Air Force Capability for the Defence of Australia and its Interests

OUTPUTS4.1 Capability for Air Combat Operations4.2 Capability for Combat Support of Air Operations4.3 Capability for Surveillance and Response Operations4.4 Capability for Airlift Operations

OUTCOME FIVE – Strategic Policy for the Defence of Australia and its Interests

OUTPUTS5.1 International Policy, Activities and Engagement5.2 Strategic Policy and Military Strategy

OUTCOME SIX – Intelligence for the Defence of Australia and its Interests

OUTPUT6.1 Intelligence

OUTCOME SEVEN – Superannuation and Housing Support Services for Current and Retired Defence Personnel

OUTPUTS7.1 Superannuation Support Services for Current and Retired Defence Personnel7.2 Housing Assistance for Current Defence Personnel7.3 Other Administered Revenues and Expenses

Defence outcome anD output structure



As at 30 June 2007, Defence had 3,850 personnel deployed on overseas operations, and around 450 personnel engaged in protecting Australia’s northern borders. The ADF has reached an operational tempo not experienced since Vietnam. The ADF is successfully conducting 14 operations and military campaigns across Africa, the Middle East, the Pacific, and Australia. During the year, the ADF also carried out five short-notice emergency relief operations in Lebanon, Tonga, Indonesia and Solomon Islands.

The biennial combined and joint exercise with the United States, Exercise Talisman Sabre ’07, was also successfully conducted during the year.

Additionally, at 30 June 2007, planning was at an advanced stage for Operation Deluge—the ADF’s support for the Asia–Pacific Economic Cooperation (APEC) summit in Sydney in September.11

Most recently, the ADF became a major support agency to the Government’s Northern Territory Emergency Response Taskforce and launched Operation Outreach on 27 June 2007 to provide logistics, communications, mobility and liaison to this whole-of-government initiative.

The performance both of people and equipment involved in operations and exercises, overseas and domestically, and in the various headquarters, has been outstanding and contributed in large part to the achievement of Outcome 1.

11. Operation Deluge took place as planned in September 2007 and achieved all its objectives.

performance information

Output 1.1—Command of operations

Implementation of the recommendations of the ADF Command and Control Review (the Wilson Review) and establishment of the Headquarters Joint Operations Command (Transitional) in January 2007 required significant effort and staff resources. Despite this, and the subsequent transfer of responsibility for some operations from the three Services, Headquarters Joint Operations Command (in 2006) and Headquarters Joint Operations Command (Transitional) (since January 2007) met performance targets during 2006–07 and continued to provide successful options to the Government for unexpected contingencies at home and abroad.

Outcome 1Command of operations

Non-commissioned officers in Metinaro, Timor-Leste (Operation Astute) participate in target range practice.

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Table 3.4—Command of operations

Performance target Performance

Australian operational concepts are further developed to support ADF planning against credible contingencies.

Achieved. Ongoing development of current and new Australian operational concepts.

Joint Operations Command provides guidance for joint force preparedness in accordance with the Chief of the Defence Force’s direction.

Achieved. The previous Joint Operations Command Operational Preparedness Requirement was updated and joint preparedness was assessed and reported monthly.

Command of ADF forces is effective and the Government’s strategic objectives for operations are achieved.

Achieved. Command continues to be effective under the 2004 revised joint command arrangements that appointed the Vice Chief of the Defence Force as Chief of Joint Operations and Theatre Commander for all ADF operations.

Development of ADF operational command arrangements introduced in 2004 and reviewed in 2005 will continue.

Achieved. Most notable was the establishment of the Headquarters Joint Operations Command (Transitional) in accordance with the Wilson Review recommendations and in preparation for the occupation of new facilities to be built at Bungendore, New South Wales.

Table 3.5—Defence Force military operations and exercises


Qua

lity

Meet the stated objectives of ADF operations within Government timeframes.

Achieved. 14 current operations, four that were ceased or completed, one dormant and one in initial planning met Government direction in 2006–07.

Maintain required preparedness levels of forces identified for operational tasks.

Achieved. Joint preparedness levels were monitored against the Joint Operations Command Operational Preparedness Requirement. Preparedness deficiencies were reported and remedied as necessary.

Deploy and sustain ADF forces effectively.

Achieved. ADF forces were effectively deployed, sustained and re-deployed during the period.

Review the Program of Major Service Activities and modify where required.

Achieved. The Program of Major Service Activities was regularly reviewed and modified in response to changing priorities and world events and to meet identified training deficiencies.

Meet the major ADF exercise commitments for 2006–07 in Exercises Bersama Padu ’06, Bersama Shield ’07, Rimpac ’06 and Talisman Sabre ’07.

Achieved. All major ADF exercises were conducted. Details of all scheduled exercises, whether conducted or cancelled, are included in the online version of this report.[1]

Qua

ntit

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Number of current ADF operations.

14 current ADF operations, including five[2] contributing to the security of the immediate neighbourhood, six supporting wider interests, and three peacetime national tasks.

Number of ADF operations ceased or completed.

Five peacetime national tasks were ceased and consolidated into Operation Resolute, which commenced on 17 July 2006. Three operations contributing to the security of the immediate neighbourhood and one operation supporting wider interests were ceased or completed.

Total number of exercises over 2006–07.

88 ADF exercises were scheduled in the Program of Major Service Activities, with 67 conducted and 21 either postponed or cancelled.

Notes1. The online version of this report can be found at www.defence.gov.au/annualreports. 2. Operation Solania relates to both ‘Operations contributing to the security of the immediate neighbourhood’

and ‘Peacetime national tasks’ and is counted in both.

Output 1.2—Defence Force military operations and exercises

Significant ADF operations supporting national objectives in both the immediate neighbourhood and further afield were continued, modified or

commenced in 2006–07. Generic performance information in relation to the conduct of ADF military operations and major exercises is reported in Table 3.5, and specific information is included in tables 3.9, 3.10, 3.11 and 3.12.



http://www.defence.gov.au/annualreports/

Table 3.6—Contribution to national support tasks


Qua

lity

The ADF contribution to peacetime national tasks meets Government directives.

Achieved. One planned and three current ADF operations, and five operations consolidated into a single new operation, met the Government’s direction for peacetime national tasks in 2006–07.

Forces are identified to provide Defence Assistance to the Civil Community, Defence Force Assistance to Civilian Authorities and search and rescue capability, and required preparedness levels maintained.

Achieved. Preparedness levels were achieved and continuously monitored against the Operational Preparedness Requirement.

ADF forces are effectively deployed and sustained. Achieved. ADF forces continued to be effectively deployed, sustained and re-deployed.

The ADF response to requests for search and rescue and emergency assistance tasks are effectively managed and reported.

Achieved.

The ADF continues to conduct minor emergency and non-emergency assistance tasks using local ADF resources, where feasible.

Achieved.

National support tasks undertaken by the ADF as significant emergency assistance, public events of significance and non-emergency law enforcement are effectively managed and reported.

Achieved.

National support tasks undertaken by the ADF as Defence Force Assistance to Civilian Authorities are effectively managed and reported.

Achieved. The ADF continued to provide consequence management (biological and radiological) and counter-terrorism capabilities.

Qua

ntit

y

ADF support to the civil surveillance program, in consultation with Coastwatch, is provided at the following resource levels:

250 flying hours by P-3 Orion surveillance aircraft240 Regional Force Surveillance Unit patrol days1,800 patrol boat days.

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Achieved. ADF support to the civil surveillance program was conducted in consultation with the Border Protection Command through Operation Resolute commencing 17 July 2006.[1]

Achieved.

Defence Assistance to the Civil Community: The following numbers of tasks were completed:

Category One—local emergency assistance> 11

Category Two—general emergency assistance> 2

Category Three—civil emergency or disaster recovery

> Nil

Category Four—public events of significance and general non-emergency assistance

> The Minister approved and the ADF supported 57 public events of significance and the Deputy Service Chiefs approved a further 357 non-emergency assistance tasks during the year.

Category Five—minor non-emergency assistance > 305

Category Six—non-emergency law enforcement–related tasks.

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Defence Force Assistance to Civilian Authorities. No requests were received.

Search and rescue tasks undertaken involving ADF assistance.

11 search and rescue tasks were undertaken.

Note1. With the consolidation of several surveillance operations into Operation Resolute on 17 July 2006, the allocation of ADF

resources during 2006–07 included significant additional assets, but was no longer calculated in terms of flying hours, patrol days and patrol boat days. For details of assets allocated to Operation Resolute, see Table 3.11.

Output 1.3—Contribution to national support tasks

Activities in preparation for support of Australia’s hosting of APEC meetings increased in tempo as

the date for the meetings approached. Generic performance targets in relation to the conduct of ADF military operations and major exercises are reported in Table 3.6, and specific information is included in Table 3.9.



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cost to Government

Table 3.7—Outcome 1: Command of operations in defence of Australia and its interests

Budget estimate[1]

Revised estimate[2]

Actual result Variation[3] Variation[3]

($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues

Sale of goods and rendering of services 26,562 47,361 42,519 -4,842 -10.2

Other revenues[4] 2,548 2,378 2,174 -205 -8.6

Total revenue 29,110 49,739 44,693 -5,047 -10.1

Gains


Net gains from sale of assets – – -85 -85 –

Other gains – 1,159 388 -771 -66.5

Total gains 7,663 38,048 16,340 -21,708 -57.1

Total income 36,773 87,787 61,032 -26,755 -30.5

Expenses

Employees 425,278 485,727 477,956 -7,772 -1.6

Suppliers 593,645 681,497 773,051 91,553 13.4

Grants 244 127 115 -12 -9.7

Depreciation and amortisation 27,580 32,867 123,605 90,738 276.1

Finance cost 896 896 1,463 568 63.4

Write-down of assets and impairment of assets 2,900 20,496 17,977 -2,519 -12.3

Net foreign exchange loss – – -26 -26 –

Other expenses -74 -68 14 82 -121.2

Total expenses 1,050,469 1,221,542 1,394,154 172,612 14.1

Net cost of Outcome 1 1,013,697 1,133,755 1,333,122 199,367 17.6


Table 3.8—Breakdown of Outcome 1 by output

Budget estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Output 1.1—Command of operations 432,842 403,418 415,064 11,646 2.9

Output 1.2—Defence Force military operations and exercises 559,667 706,514 850,266 143,753 20.3

Output 1.3—Contribution to national support tasks 21,188 23,823 67,792 43,969 184.6


Notes1. Budget estimates are consistent with Portfolio Budget Statements 2006–07 (page 117).2. Revised estimates are consistent with Portfolio Additional Estimates Statements 2006–07 (page 85).3. Variation figures are the difference between the revised estimate and the actual result.



australian Defence force operations

Table 3.9—Operations contributing to the security of the immediate neighbourhood

Operation Objective Status Contribution

Garuda Assist[1]

April 2007

To contribute to Australian Government support to Indonesia’s response to Garuda Airlines flight GA 200 crash.

Complete Defence supplementation staff and airlift support.

Solomon Assist[2]

April 2007

To contribute to Australian Government support to Solomon Islands following a tsunami in April 2007.

Complete Two medical teams and C-130 airlift support.

Tower

November 2006 —continuing

To contribute to the United Nations Integrated Mission in Timor-Leste Headquarters.

Current Four staff officers and military observers.

Quickstep

October–December 2006

To provide a presence and be prepared to provide non-combatant evacuation operations in response to regional instability.[3]

Dormant One landing platform amphibious, one frigate, one underway replenishment vessel, one P-3 Orion aircraft, four UH-60 helicopters, two Defence supplementation staff, and a tailored Army force element.

Chiron

July–November 2006

To support the United Nations mandate and Australia’s national interests by contributing military and advisers to assist in the development of Timor-Leste’s security and stability.

Ceased; replaced by Operation Tower

Four staff officers and military observers.

Astute

May 2006—continuing

To assist the Timor-Leste Government and the United Nations to bring stability, security and confidence to the Timorese to allow them to resolve their differences democratically and peacefully.

Current The ADF maintains approximately 990 personnel deployed on Operation Astute and continues to provide support to the Timor-Leste Government in conjunction with the Australian Federal Police and Malaysian, New Zealand and Portuguese forces.

Anode

July 2003—continuing

To support the Coalition police forces in maintaining the rule of law in Solomon Islands.

Current Approximately 140 personnel remain as at 30 June 2007, including an enhanced Task Force Headquarters element and a company group. The ADF continues to provide security support to the Regional Assistance Mission to Solomon Islands in conjunction with the Australian Federal Police and participating Pacific nations.

Gateway

1981—continuing

To conduct northern Indian Ocean and South China Sea maritime surveillance patrols.

Current One P-3 Orion maritime patrol aircraft for four patrols per year.

Notes1. Operation Garuda Assist was not reported in the Portfolio Additional Estimates Statements 2006–07 due to the immediate

nature of the deployment.2. Operation Solomon Assist was not reported in the Portfolio Additional Estimates Statements 2006–07 due to the immediate

nature of the deployment.3. The objective for Operation Quickstep was incorrectly described in the Portfolio Additional Estimates Statements 2006–07.



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Table 3.10—Operations supporting wider interests[1]


Ramp

July–August 2006

To assist in the evacuation of Australian and other approved foreign nationals from Lebanon.

Completed Approximately 120 ADF personnel consisting of two Defence supplementation staff, two evacuee handling centres, C-130 airlift support and a controlling headquarters.

Palate II

June 2005—continuing

To provide a Military Liaison Officer to the United Nations Assistance Mission in Afghanistan.

Current One Military Liaison Officer.

Azure

May 2005—continuing

To contribute ADF resources to the United Nations Mission in Sudan.

Current 15 ADF personnel to the United Nations peacekeeping force serving as headquarters staff and military observers.

Catalyst


To contribute ADF resources in support of the rehabilitation of Iraq.

Current Approximately 1,450 ADF personnel, including: an Australian National Headquarters element, commanded by a two-star officer an Australian Naval Task Force Headquarters staff to command Coalition Naval Operations in the North Arabian Gulf led by a one-star officer approximately 95 personnel serving in the multinational force headquarters and units a maritime element of one frigate aviation elements including C-130 Hercules and P-3 Orion aircraft and support detachments a security detachment including Australian light armoured vehicles to provide protection and escort for Australian Government personnel working in Baghdad a land task group based in the southern Iraqi provinces of Al Muthanna and Dhi Qar an Australian Army Training Team providing assistance with training of Iraqi Army personnel a small number of personnel employed in the Combined Explosives Exploitation Cell tasked with disarming explosive devices and conducting post-explosion assessments to determine the type of explosive devices used a tri-service force-level logistic asset providing logistic support to all forces in Iraq and Afghanistan.

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Slipper

October 2001 —continuing

To contribute to the United States–led operation against international terrorism and to the Multinational Maritime Interception Force in the Persian Gulf.

Current Approximately 840 personnel deployed (not including dual assigned elements) including:

the Reconstruction Task Force which deployed in late 2006 a Special Forces Task Group which deployed in April 2007 an Air Force Radar Reporting Element which deployed in April 2007 a maritime element of one frigate (dual assigned to Operation Catalyst) P-3 Orion aviation element (dual assigned to Operation Catalyst).

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Mazurka

September 1982 —continuing

To provide personnel to the Multinational Force and observers to monitor the security arrangements in the Sinai.

Current 25 personnel in the Multinational Force, serving as specialist staff and military observers.

Paladin


To contribute to the United Nations Truce Supervision Organization in the Middle East.

Current 12 unarmed military observers who supervise, observe and report on the various cease-fire arrangements, truces and peace treaties that have been negotiated between Israel and neighbouring Arab nations since 1948.

Note 1. Operation Valient was intended to prepare and equip the Republic of Fiji Military Force contribution to the United Nations

Assistance Mission Iraq (UNAMI). All weapons previously provided under Operation Valient have been returned to Australia’s possession and no further support is being provided to Fiji under this Operation. Ongoing support to the Republic of Fiji Military Force contingent to UNAMI is a matter for the Government of Fiji to resolve with the United Nations.



Table 3.11—Peacetime national tasks


Deluge

March 2007 —continuing

To support Australia’s hosting of the APEC meetings in 2007.

Current A joint taskforce is conducting planning and training to provide logistic and security support in cooperation with the New South Wales Government and civil authorities.

Outreach


To provide support to the whole-of-government activities in Indigenous communities in the Northern Territory.

Planning Eight Norforce personnel in attendance from 27 June 2007.[1]

Resolute


To deter unauthorised boat arrivals, support Australian sovereign rights and fisheries law enforcement in Australia’s Economic Exclusion Zone and the Southern Ocean by contributing to Southern Ocean fisheries patrols. (Operation Resolute is a consolidation of Operations Relex II, Mistral, Cranberry, Estes and Celesta.)

Current The ADF currently provides the following major assets:

one major fleet unitup to five Navy patrol boatsup to two coastal mine huntersone heavy landing craftone P-3 Orion maritime patrol aircraft Army Regional Force Surveillance Units.

>

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>

>

>

>

Solania[2]

1988—continuing

To conduct South-West Pacific maritime surveillance patrols.

Current Operation Solania was conducted at a reduced rate of effort due to higher operational commitments.

Notes1. On 31 July 2007, a further 120 personnel were deployed to Operation Outreach.2. Operation Solania also contributes to ‘Operations contributing to the security of the immediate neighbourhood’.

Table 3.12—Major ADF exercises[1]

Operation Objective

Blue Luminary ’07May 2007

To participate in a Protective Security Coordination Centre–led exercise in Sydney in preparation for the APEC meetings in September 2007.

Vital Launch ’07March 2007

To practise the Deployable Joint Force Headquarters in planning operations as part of Exercise Talisman Sabre ’07.

Combined ADF/Five Power Defence Arrangements exercises

Bersama Shield ’07April–May 2007

To exercise assigned Five Power Defence Arrangements forces in the conduct of joint and combined operations in a multi-threat scenario for the defence of Malaysia and Singapore.

Bersama Padu ’06September 2006

To develop and practise operational procedures and tactics with Five Power Defence Arrangements nations in a joint and combined maritime exercise.

Suman Warrior ’06July 2006

To exercise elements of the Five Power Defence Arrangements armies in combined land operations.

Other combined exercises

Pitch Black ’06July–August 2006

To conduct a large-scale activity to exercise ADF and international participants in the tasking, planning and execution of offensive and defensive counter air operations in a coalition environment.

Combined ADF/United States exercises

Talisman Sabre ’07May–July 2007

To practice the planning and conduct of combined and joint task force operations in a high-end warfighting environment in order to improve combat readiness and enhance interoperability.

Note1. All the exercises cited in this table were conducted as intended and achieved all their aims.



58

MAZURKASinaiCommencedSeptember 1982

SLIPPERGlobalThe war against terrorismCommenced October 2001

PALADINMiddle EastCommencedJune 1956

RAMPLebanonJuly–August 2006

CATALYSTIraqCommenced July 2003

Timor-LesteASTUTECommenced May 2006TOWERCommenced November 2006

Solomon IslandsANODECommenced July 2003SOLOMON ASSISTApril 2007

QUICKSTEPFijiNovember–December 2006TongaNovember 2006

RESOLUTEMaritime surveillance andoffshore protectionCommenced July 2006

AZURESudanCommenced May 2005

Figure 3.1—M

ajor Australian D

efence Force Operations during 2006

–07

SECTION 2

59

o

utcom

e perform

ance : chapter 3

3,850 personnel deployed

As at 30 June 2007, there were 3,850 personnel deployed on overseas operations, and around 450 personnel engaged in protecting Australia’s northern borders. The ADF has reached an operational tempo not experienced since Vietnam. The ADF is successfully conducting 14 military operations across Africa, the Middle East, the Pacific and Australia. During the year, the ADF also carried out five short notice emergency operations in response to events in Lebanon, Tonga, Fiji, Indonesia and Solomon Islands.

Additionally, Operation Deluge provided the ADF’s support for the Asia–Pacific Economic Cooperation summit held in Sydney in September 2007.

Most recently, the ADF became a major support agency to the Government’s Northern Territory Emergency Response Taskforce and on 27 June 2007 deployed personnel under Operation Outreach to provide logistics, communications, mobility and liaison to this whole-of-government initiative.

61

The Royal Australian Navy has had a challenging 12 months. The Navy maintained a presence in the Middle East with a frigate on station in the northern Arabian Gulf throughout the year, supported operations in Timor-Leste, provided a task force on standby to respond to the Fijian political crisis and, closer to home, continued to support border protection operations.

The Navy achieved all operational and routine goals, including commitments to Operations Astute, Slipper, Catalyst, Resolute, Quickstep, Ramp and, most recently, Outreach.

As part of Operation Resolute, the Navy conducted 102 foreign fishing vessel apprehensions and 235 operational boardings. The patrol boat force contributed 1,438 patrol days in support of Operation Resolute, and was supplemented by two coastal mine hunters, re-roled for surveillance and patrolling, which contributed a total 383 days. While assigned to Operation Resolute, HMAS Success intercepted a boat carrying 85 potential illegal immigrants attempting to reach Australian territory.

People remained a very high priority, and a number of important initiatives to improve recruiting and retention have been implemented through the Navy Sea Change program as well as joint Defence schemes.

The Sea King Board of Inquiry report was released in June 2007. Defence has accepted all of the report’s recommendations, 97 per cent of which are expected to be fully implemented by the end of 2007. The Chief of Navy is committed to ensuring the implementation of all of the recommendations and has established a dedicated Implementation Team to undertake the task. More information on the Sea King Board of Inquiry is available in Chapter 5—Justice and fairness in Defence.

The Government has selected the Navantia-designed F100 as the basis for the Hobart class Air Warfare Destroyer. In addition, the Government has announced that Tenix will build the Navantia-designed Canberra class amphibious ship, which will significantly increase the Navy’s reach and ability to operate as an effective joint force in the littoral environment. These and other initiatives, such as the replacement combat system and heavyweight torpedo upgrade recently completed on HMAS Waller, will ensure that the Navy continues to be a world-class force well into the future.

Collins class submarine HMAS Farncomb off the West Australian coast arriving for homeporting at Fleet Base West.

Outcome 2Navy capability



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Output 2.1—Capability for major surface combatant operations

The surface combatant force possesses combat capabilities in all three primary warfare areas (air, surface and undersea), and provides combined coalition and joint ADF command and control facilities for operations. In 2006–07, the force was made up of five Adelaide class guided missile frigates and eight Anzac class frigates.

AdElAIdE ClASS guIdEd mISSIlE frIgATES

The Adelaide class frigate force will reduce to four in January 2008 due to the decommissioning of HMAS Adelaide.

ANzAC ClASS frIgATES

The Anzac class frigates are progressively undergoing capability enhancement including provision of Harpoon missile capability, mine and obstacle avoidance sonar upgrades, and crew accommodation improvements.

Table 3.13—Capability for major surface combatant operations


Qua

lity

Achieve levels of preparedness directed by the Chief of the Defence Force for military response options with a warning time of less than 12 months.

Achieved. Levels were met in accordance with current preparedness directives.

Achieve a level of training that maintains core skills and professional standards across all warfare areas.

Substantially achieved. Collective and individual training in all disciplines continued to be conducted, although the shortage of trainees hampered the ability to meet all capability training requirements.

Achieve mission capability[1] for assigned tasks. Substantially achieved. 91 per cent (2,543 URD)[2] for the force. Mission capability was not fully achieved due to various systems-related defects. Class achievements:

guided missile frigates—91 per cent (874 days)Anzac class frigates—91 per cent (1,669 days).

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5 guided missile frigates—1,046 URD. 92 per cent (951 URD achieved). The underachievement was due to the delayed handback of HMAS Melbourne from upgrade.

8 Anzac class frigates—1,850 URD. 99 per cent (1,829 URD achieved). The slight underachievement of URD resulted from a temporary shortage of engineering personnel.

Notes1. Mission capability measures capability for assigned tasks. It is defined as the required level of unit readiness for the actual

tasking for which the force element has been scheduled at any time through its operational cycle. Tasking includes all scheduled activities to achieve assigned Defence operations, international engagement requirements and levels of preparedness required for a military response. Mission capability is assessed against unit ready days (URD) and calculated by dividing the total number of mission capable days recorded throughout the year by the URD achieved to produce a percentage.

2. URD are the number of days that a force element is available for tasking by the Commander Australian Fleet, either outside of major maintenance and within planned readiness requirements or in accordance with contracted availability.



Table 3.14—Capability for naval aviation operations


Qua

lity


Partially achieved. Longer-term preparedness targets for frigate support were affected by the unavailability of Super Seasprites. The Maintenance Re-invigoration Program and aircrew shortages affected preparedness and availability across all squadrons.


Substantially achieved. Core skills and professional standards across all warfare areas were maintained. The number of Seahawk flights at sea continued to be temporarily reduced to meet workforce regeneration and helicopter modification requirements ashore.

Achieve mission capability for assigned tasks.

Substantially achieved. Embarked flights and detachments were mission capable to meet all but a limited number of assigned tasks.

Qua

ntit

y

16 Seahawks—2,800 flying hours. 87 per cent (2,439 flying hours). Project demands on the Seahawk fleet, the Maintenance Re-invigoration Program and aircrew shortages continued to limit aircraft availability and consequently the flying hours achieved.

6 Sea Kings—1,600 flying hours. 77 per cent (1,228 flying hours). Sea King hours were affected by a period of reduced activity due to maintenance issues. Sea Kings achieved 30 per cent more hours than in 2005–06.

13[1] Squirrels—4,000 flying hours. 89 per cent (3,560 flying hours). Squirrel hours were affected by weather limitations in mid-2007. Squirrels achieved 26 per cent more hours than in 2005–06.

11[2] Super Seasprites—100 hours. 0 per cent (no flying hours). The suspension of flying throughout the year meant the provision of 100 hours for testing was not achieved.

9 Kalkaras—available for 39 presentations.[3]

7 Kalkaras—28 per cent (11 presentations). The system was available for 39 presentations as per the contractual requirements. Only 11 presentations were required to support the ADF during 2006–07. Two Kalkaras were intentionally shot down as ‘skin shots’ during missile presentation serials.[4]

Notes1. Twelve aircraft are operated and one is held for attrition purposes.2. The 11th Super Seasprite has not been delivered from the United States to Australia and will remain in the US for testing.3. Kalkara is an unmanned aerial target system used for Navy and Air Force missile/aircraft detection, tracking and engagement

training. Presentations refer to the number of instances during which the system was used as a target in training or system testing exercises. It is at the end of its operational life and will be retired in early 2008.

4. The Portfolio Budget Statements 2007–08 (page 153) state that four Kalkaras were expended in missile firings in 2006–07. Two of these firings were postponed after publication, as reflected in the final figures above.

Output 2.2—Capability for naval aviation operations

The Naval Aviation Force is made up of 16 Seahawk, six Sea King and 13 Squirrel helicopters. Plans for the addition of 11 Super Seasprite helicopters have been delayed due to suspension of flying since March 2006. Subject to the implementation of satisfactory contract arrangements, the Super Seasprites are expected to be operational in 2011. Seahawk helicopters can be embarked in either Adelaide class guided missile frigates or Anzac

class frigates. A Sea King squadron is maintained for maritime support operations, including trooplift and a range of fleet logistic tasks. Squirrel helicopters provide initial helicopter aircrew training.

Seahawk helicopters met all planned operational commitments in 2006–07, but a temporary cessation of flying due to maintenance issues reduced the overall achievement. Kalkara target operations in support of Navy and Air Force training, and missile testing, met all requested tasking assignments.



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Output 2.3—Capability for patrol boat operations

The focus of the Patrol Boat Force continues to be maritime resource and border protection operations under the operational control of the Border Protection Command, with tasking coordinated by Headquarters Northern Command. These operations also cover security patrols of the North-West Shelf with emphasis on the protection of offshore oil and gas platforms. In 2006–07, patrol boats continued to contribute to international engagement and national security through the conduct of operations, port visits and exercises with regional nations.

By the end of 2006–07, the transition of the Patrol Boat Force from Fremantle class to Armidale class patrol boats was largely complete. The last Fremantle class boats, HMA Ships Ipswich and Townsville, were decommissioned in Cairns

on 11 May 2007. The 10th Armidale class boat, HMAS Wollongong, was commissioned in Sydney on 23 June 2007.

Of the 21 crews that will operate the Armidale class patrol boats under a multi-crewing system, 19 have been formed with 13 achieving mission-readiness status after a comprehensive shore and sea training program. All 21 crews are on track to achieve mission readiness by March 2008. The Armidale class patrol boat multi-crewing program is designed to increase operational availability while providing predictable respite periods for personnel.

The construction and upgrade of infrastructure to provide necessary operational, logistic and administrative support to the Armidale class boats and crews continued. Wharf and ship-lift upgrades and crew support facility construction at the HMAS Coonawarra fleet base in Darwin are expected to be completed and operational by the end of 2007.

Table 3.15—Capability for patrol boat operations


Qua

lity


Substantially achieved. The size of the patrol boat workforce was reduced marginally during transition from the Fremantle to Armidale class, as personnel were largely drawn from the former and re-trained to operate the latter. Increased availability to meet directed preparedness levels will be provided upon full maturity of the multi-crewed Armidale class.


Achieved. Core skills and professional standards across all warfare areas were maintained.


Substantially achieved. 70 per cent (2,427 days) for the force. Mission capability was not fully achieved due to unscheduled maintenance requirements driven by age and obsolescence issues in the Fremantle class, and restrictions imposed because of fuel system defects in the Armidale class. Class achievements:

Fremantle class—89 per cent (1,100 days)Armidale class—60 per cent (1,327 days).

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ntit

y

URD[1][2] forecast:Fremantle class patrol boats—1,232.

Armidale class patrol boats—1,575.

URD achieved: 1,237 (100 per cent) due to the extension of HMAS Gladstone beyond its planned decommissioning date 2,212 (140 per cent) due to the better than forecast delivery of the new class of patrol boats.

>

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Notes1. Period commenced with 10 Fremantle class patrol boats and reduced to zero by 11 May 2007.2. Period commenced with three Armidale class patrol boats and increased to 10 by the end of June 2007.



Output 2.4—Capability for submarine operations

Six Collins class submarines provide the ADF with a capability for submarine operations, including anti-submarine warfare, maritime strike and interdiction, maritime surveillance and intelligence collection, and enhanced joint ADF operations.

Two of the six submarines are fitted with enhanced combat systems to provide a higher level of capability, and the remaining four have received

platform improvements to maintain capability levels until the completion of their combat system upgrades. HMAS Waller came out of a full-cycle docking in April 2007 with the first replacement combat system fitted with the capacity for carrying and firing the new heavyweight torpedo. All remaining submarines will be fitted with the new system and torpedo during their future full-cycle dockings. Other projects are in place to progressively enhance the combat capability of all six submarines, including sensors, enhancements for Special Forces and communication system upgrades.

Table 3.16—Capability for submarine operations


Qua

lity


Substantially achieved. Not all submarines have the complete capability enhancements, such as the combat system augmentation and hull improvements, to achieve the full range of preparedness requirements.


Substantially achieved. Core warfare skills and professional standards were maintained. Unavailability of the torpedo tracking range for part of the year affected some core warfare skills.


Substantially achieved. 73 per cent (583 days). Mission capability was not fully achieved due to systems-related defects and workforce shortfalls.

Qua

ntit

y

6 Collins class—817 URD. 98 per cent (802 URD achieved). The underachievement was due to delays in HMA Ships Waller and Collins achieving full licence certification in June 2007 as originally planned. The underachievement was offset by additional availability of HMA Ships Sheean and Farncomb due to changes to their original planned programs.



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Table 3.17—Capability for afloat support


Qua

lity




Achieved. Core skills and professional standards were maintained in all units.

Achieve mission capability for assigned tasks. Achieved. 100 per cent (628 days) for the force. Class achievements:

tanker—100 per cent (298 days)replenishment ship—100 per cent (330 days).

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y

1 oil tanker—315 URD. 95 per cent (298 URD achieved) due to delays in acceptance into service of HMAS Sirius.

1 replenishment ship—360 URD. 101 per cent (365 URD achieved). The slight overachievement was due to rescheduling into 2007–08 of the refit of HMAS Success, which made the vessel available for tasking throughout 2006–07.

Output 2.5—Capability for afloat support

An oil tanker and a replenishment ship provide the ADF’s afloat support capability. The afloat support units provide important logistic support to operations and exercises and contribute to Defence international engagement through these activities. The Defence Materiel Organisation delivered the environmentally compliant, double-hulled HMAS Sirius, which was commissioned in September 2006, while concurrently decommissioning HMAS Westralia.



Output 2.6—Capability for mine warfare

Six Huon class coastal mine hunters, two auxiliary minesweepers and two clearance diving teams provide the Navy with a mine warfare capability. The Huon class coastal mine hunters provided mine countermeasures capability and also made a significant contribution to maritime surveillance and patrol operations. Two clearance diving teams supported the full spectrum of mine warfare missions and also provided capability for explosive ordnance and improvised explosive device disposal.

Table 3.18—Capability for mine warfare


Qua

lity





Achieve mission capability for assigned tasks. Substantially achieved. 86 per cent (2,808 days) for the force. Underachievement was due to various systems-related defects. Class achievements:

coastal mine hunters—85 per cent (1,540 days)auxiliary minesweepers—74 per cent (541 days)clearance diving teams—99 per cent (727 days).

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Qua

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6 coastal mine hunters[1]—1,807 URD. 91 per cent (1,639 URD achieved). The slight underachievement was due to various systems-related defects.

2 auxiliary minesweepers—730 URD. 81 per cent (592 URD achieved). The underachievement was due to propulsion defects in the two vessels; these defects were subsequently rectified.

2 clearance diving teams—730 URD. 100 per cent (730 URD achieved).

Note1. Two coastal mine hunters were re-roled for surveillance and patrolling of Australia’s maritime approaches.



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Table 3.19—Capability for amphibious lift


Qua

lity





Achieve mission capability for assigned tasks. Achieved. 100 per cent (2,943 days). Class achievements:

heavy landing ship—100 per cent (351 days)amphibious landing ships—100 per cent (719 days)heavy landing craft—100 per cent (1,873 days).

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1 heavy landing ship—365 URD. 96 per cent (351 URD achieved). The slight underachievement was due to engineering defects in HMAS Tobruk.

2 amphibious landing ships—730 URD. 98 per cent (719 URD achieved).

6 heavy landing craft—1,903 URD. 98 per cent (1,873 URD achieved).

Output 2.7—Capability for amphibious lift

Capability for amphibious lift consists of one heavy landing ship, two amphibious landing ships and six heavy landing craft. The major fleet units provide amphibious lift and support to landing forces. They also have utility in a broad range of peacetime national tasks, including evacuation operations, disaster relief, and humanitarian assistance and peace support operations. The ships’ inherent capability for command and control, communications, helicopter operations and medical support facilities make them extremely versatile. This capability is a key contributor to the ADF joint amphibious capability.



Table 3.20—Capability for hydrographic, meteorological and oceanographic operations


Qua

lity



Achieve a level of training that maintains core skills and professional standards to conduct survey tasking, produce navigational information and provide oceanographic and meteorological support.



Achieved. 100 per cent (2,048 days) for the force.Class achievements:

hydrographic ships—100 per cent (730 days)survey motor launches—100 per cent (1,318 days).

>

>

Achieve HydrOcscheme 2005–08 data and surveying tasking requirements to meet national hydrographic surveying and charting obligations.

Substantially achieved. 73 per cent. Units recorded 587 survey/sortie days achieved (SDA) from 804 survey/sortie days planned (SDP).Specific achievements:

hydrographic ships—75 per cent (190 SDA from 252 SDP). 31 days were re-tasked to Operations Resolute and Quickstep. The remaining days lost were due to defects and inclement weather. survey motor launches—78 per cent (269 SDA from 345 SDP). Defects and inclement weather reduced achievement of targets. laser airborne depth sounder aircraft—79 per cent (92 SDA from 117 SDP). Aircraft undercarriage maintenance and unavailability of replacement parts resulted in an extended maintenance period that reduced achievement. deployable geospatial support team—40 per cent (36 SDA from 90 SDP). Support of operations conducted in lieu of HydrOcscheme availability.

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Output 2.8—Capability for hydrographic, meteorological and oceanographic operations

The Navy’s hydrographic, meteorological and oceanographic operations capability is made up of two Leeuwin class hydrographic ships and their embarked survey motor boats, four Paluma class survey motor launches, a laser airborne depth sounder aircraft and a deployable geospatial support team. These are all supported by the Australian Hydrographic Office in Wollongong, New South Wales. Meteorological and oceanographic support is conducted by mobile teams, the Operational Meteorological and Oceanographic Centre, the Defence Oceanographic Data Centre, the Fleet Weather and Oceanographic Centre in Sydney, and the Naval Air Station Weather and Oceanographic Centre in Nowra, New South Wales.

The Navy’s nautical products contribute to the maintenance of sovereignty, maritime trade, maritime safety and environmental protection.

Additionally, the Navy meets Australia’s national obligations for provision of hydrographic services under the terms of the United Nations Safety of Life at Sea (SOLAS) Convention 1974 (as amended) and the Navigation Act 1912. The Navy is also influential in the international maritime community and represents Australia in a number of international maritime, hydrographic, meteorological and oceanographic commissions, committees and working groups.

During 2006–07, the Navy continued its focus on the development and production of electronic navigation charts to support increasing Defence and commercial use of computer-based navigation systems. In addition, it focused hydrographic surveying efforts on the Torres Strait and northern Great Barrier Reef waters to enhance the effectiveness of border protection efforts and enforcement operations in this important area. The deployable geospatial support team contributed to Operations Quickstep and Resolute.



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Performance target PerformanceQ

uant

ity

2 hydrographic ships—730 URD. 730 URD achieved (100 per cent).

4 survey motor launches—1,318 URD. 1,318 URD achieved (100 per cent).

1 laser airborne depth sounder aircraft—850 flying hours.

653 hours achieved (77 per cent). Aircraft undercarriage maintenance and unavailability of replacement parts resulted in extended maintenance period that reduced achievement.

1 deployable geospatial support team—availability 365 days; planned deployments 178 days.

365 days availability (100 per cent) and 120 days planned deployments (67 per cent). The underachievement was due to non-availability of qualified personnel.

1 Australian Hydrographic Office—availability 365 days; chart production 249 days.

365 days availability (100 per cent) and 249 chart production days (100 per cent).

1 Fleet Weather and Oceanographic Centre—availability 365 days.

365 days availability (100 per cent).

1 Naval Air Station Weather and Oceanographic Centre—availability 240 days.

240 days availability (100 per cent).

1 mobile meteorological and oceanographic team—availability 730 days; planned deployments 253 days.

730 days availability (100 per cent) and 216 days planned deployments (85 per cent). The deployment shortfall was due to reduced demand for support to operations and exercises.

Navigation chart production:new charts/editions—50

electronic navigational chart cells—150

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36 new charts/editions (72 per cent). 11 charts were rescheduled to December 2007 under an outsourced contract. Internal production was underachieved due to ongoing technical problems with the digital hydrographic database.122 electronic navigational charts (81 per cent). 31 electronic navigational charts were not completed during 2006–07 due to personnel shortages.

Defence support:new charts/editions—20

Military Geographic Information Foundation Datasets—6

>

>

6 new charts/editions (30 per cent). The underachievement was due to delays in approval and external endorsement prior to publishing.10 Military Geographic Information Foundation Datasets (167 per cent). Demand for datasets exceeded planned levels and was met.

Oceanographic database production:web-enabled datasets—6>

6 datasets produced (100 per cent).

Table 3.20 continued



Navy risks

Table 3.21 shows key risks and limitations and the status of mitigation strategies to address each.

Table 3.21—Outcome 2: Key risk mitigation status

Key risks and limitations

Risk mitigation Status

Personnel Work is proceeding, primarily through the Sea Change program, to research, develop and implement a broad range of initiatives to attract and retain high-quality people. This focuses on themes of stability and improved service conditions, and aims to provide a sense of vocation, interesting employment and attractive prospects for future careers.[1] The Navy Community Engagement Strategy is now well established as a keystone to improving recruiting by increasing public awareness of the Navy.

In place

Logistic support Substantial improvements aimed at boosting sustainment levels for all Navy platforms were identified and funded in the Defence Management and Finance Plan 2007–17.

In place; undergoing review and upgrade

Support to operations

The Navy undertook a concentrated training period in March 2007 providing the fleet with a dedicated opportunity to exercise high-end warfighting skills. This provided an opportunity to ready the forces assigned to Exercise Talisman Sabre ’07 in June, which involved 21 fleet units and the fleet battle staff. Collectively, these activities reinforced preparedness levels and affirmed the Navy’s ability to fulfil vital roles in coalition operations.

In place

Air warfare The guided missile frigate upgrade program has progressed with the first ship, HMAS Sydney, being provisionally accepted by the DMO in December 2006. HMAS Melbourne has commenced contractor trials, while HMAS Darwin remains in dockyard hands. The final ship, HMAS Newcastle, is scheduled to enter the upgrade program in late 2007. The anti-ship missile defence upgrade for the eight Anzac class frigates has also progressed, with the first ship expected to enter the upgrade program in 2009. The Air Warfare Destroyer (Project SEA 4000) is scheduled to be introduced from 2014.[2]

The SM-2 area air-defence missile for the Adelaide class frigate is on schedule for delivery from 2009.

In place

Submarine Submarine capability enhancements were progressed with the completion of the full-cycle docking of HMAS Waller in early 2007. During the docking, HMAS Waller became the first submarine to be fitted with the replacement combat system, integrated sonar system and new heavyweight torpedo capability. Workforce risks and limitations continue to be actively managed, particularly through the Navy’s Sea Change program.

In place



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Key risks and limitations

Risk mitigation Status

Undersea warfare A partial Seahawk helicopter sensor upgrade, which commenced in 2005–06, continued throughout 2006–07, with capability being incrementally delivered. The final capability is scheduled for delivery in 2009. This upgrade will enhance the effectiveness of the Seahawk for undersea warfare.

In place

Environmental assessment

The Rapid Environmental Assessment Joint Environmental Centre within Headquarters Joint Operations Command was activated in January 2007 and will be equipped with a prototype geospatial system, which will enable the rapid development and dissemination of environmental information and products required for military planning and operations.

In place

Force protection The introduction into service of measures to aid in force protection and ship defence against asymmetric threats has progressed, with the mini-typhoon weapon system fitted to each major surface combatant assigned to Operation Catalyst. Measures to improve the force protection on HMAS Kanimbla and HMAS Tobruk have been completed, while planning for the upgrade of the remainder of the amphibious and afloat support ships has continued. Trials of harbour systems have been undertaken and acquisition is progressing on a limited number of shore and seaward barrier systems.

In place

Aviation The introduction of the Super Seasprite into operational service has been delayed by software development and, more recently, by problems with the automatic flight control system that caused the suspension of flying operations in March 2006. This delay has affected Navy aviation capability. The Government completed a detailed examination of the Seasprite project and, subject to satisfactory contractual arrangements, it will continue. Until the Super Seasprite capability is delivered, Seahawk helicopters will continue to carry the additional naval combat helicopter tasking burden. The future Maritime Support Helicopter (Project AIR 9000 Phase 6) will replace the Sea King from 2010.[2]

Under review

Notes1. See Chapter 4—People for more information on recruitment and retention performance.2. See Volume 2 of this report for further information.




cost to Government

Table 3.22—Outcome 2: Navy capability for the defence of Australia and its interests

Budget estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues

Sales of goods and rendering of services 151,545 186,106 167,347 -18,759 -10.1

Other revenues[4] 20,886 21,298 33,046 11,748 55.2

Total revenue 172,430 207,404 200,393 -7,011 -3.4

Gains


Sale of assets – – 2,706 2,706 –

Other gains – 1,351 7,437 6,086 450.6

Total gains 21,896 180,252 157,200 -23,052 -12.8

Total income 194,326 387,656 357,593 -30,063 -7.8

Expenses

Employees 1,565,080 1,580,072 1,616,597 36,524 2.3

Suppliers 2,093,172 2,108,668 2,060,956 -47,711 -2.3

Grants 1,360 699 806 108 15.4


Finance cost 5,070 5,071 10,680 5,609 110.6


Foreign exchange loss – – -38 -38 –

Other expenses -20 -8 559 567 -7,087.5

Total expenses 4,809,843 5,074,018 5,242,478 168,460 3.3


Notes1. Budget estimates are consistent with Portfolio Budget Statements 2006–07 (page 132). 2. Revised estimates are consistent with Portfolio Additional Estimates Statements 2006–07 (page 91).3. Variation figures are the difference between the revised estimate and the actual result.4. Other revenues include interest and dividends.



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Budget

estimate[1]

Revised estimate[2] Actual result Variation[3] Variation[3]

($’000) ($’000) ($’000) ($’000) (%)

Output 2.1—Capability for major surface combatant operations 1,572,470 1,831,218 1,834,908 3,690 0.2

Output 2.2—Capability for naval aviation operations 597,690 612,033 587,952 -24,081 -3.9

Output 2.3—Capability for patrol boat operations 310,642 247,941 298,674 50,733 20.5

Output 2.4—Capability for submarine operations 724,138 790,227 828,609 38,382 4.9

Output 2.5—Capability for afloat support 295,361 235,230 267,747 32,517 13.8

Output 2.6—Capability for mine warfare 398,607 356,569 361,322 4,753 1.3

Output 2.7—Capability for amphibious lift 422,430 394,313 447,448 53,135 13.5

Output 2.8—Capability for hydrographic, meteorological and oceanographic operations 294,180 218,831 258,225 38,394 18.0





The Army provides a world-class capability to fight and win as part of the ADF team. Its mission is to win the land battle and the Army achieved all its operational outcomes during 2006–07.

To meet the challenge of future operational requirements, the Army uses warfighting concepts to investigate and describe future operating environments and to guide the development of military capabilities. This ensures that the Army is agile and adaptable, and has the right combat weight and readiness to sustain operations in all types of conflict and under high levels of uncertainty. The Army’s capstone concept, ‘Adaptive Campaigning’, was endorsed in late 2006 and guides conceptual and force modernisation development.

The Army’s key initiative to modernise and meet future operational demands and requirements of the Government is the Hardened and Networked Army. This initiative is based on the philosophy of the combined arms approach to combat, whereby infantry, armour, artillery, aviation and engineers work together for support and protection, with their efforts sustained by combat service support elements.12

The Army is also revitalising the Army Reserve to ensure that it can make a significant and meaningful contribution to operational tasks. Rather than being an expansion force to be called out in the event of large-scale conflict, the Army Reserve has been re-roled to provide specific individual and collective capabilities to support, sustain and reinforce operational forces. The Army has commenced

12. More information can be found at www.defence.gov.au/army/hna/default2.htm.

developing a High Readiness Reserve capable of supporting all Hardened and Networked Army operational capabilities.

Army is currently providing support to operations at the highest level since 1973. The equivalent of a Brigade-sized force is deployed in support of the Regional and non-Regional commitments and Army continues to hold a similar sized force at high readiness in Australia for other contingencies. The Army is coping well with an unprecedented period of operational tempo, the introduction of an extensive range of new equipment and the requirement to substantially grow the size of the Army. Apparent personnel and equipment issues are manageable and are being addressed through the Hardened and Networked Army, Enhanced Land Force and recruiting and retention initiatives.

Australian Special Forces performing a building clearance as part of a demonstration at Holsworthy Barracks.

Outcome 3Army capability



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http://www.defence.gov.au/army/hna/default2.htm

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Output 3.1—Capability for special operations

The Army’s special operations capability contributes to the strategic tasks of defending Australia, securing the immediate neighbourhood, supporting wider interests and supporting peacetime national tasks. The special operations capability lies in highly trained forces which conduct non-combatant evacuation and special recovery operations,

counter-terrorism and consequence management operations as well as providing support to conventional land operations.

This capability exploits deception and surprise and employs techniques that are discreet, non-escalatory and avoid collateral damage, particularly when in support of domestic security operations. The special operations capability is maintained at a high degree of readiness.

Table 3.24—Capability for special operations


Qua

lity


Achieved. The special operations capability was able to meet all preparedness requirements for military response options.

Achieve a level of training that maintains core skills and professional standards across all warfare (and counter-terrorist) areas.

Achieved. Directed training requirements were met.

Qua

ntit

y

Special Operations Command, comprising:a command headquartersa Special Air Service regimenta Regular Army commando regimentan Army Reserve commando regimentan Incident Response regimenta Special Forces Training centrea Special Operations Logistic Squadron.

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4 RAR (Commando) has reached operational maturity and is expected to reach full operational capability by mid-2009.Manning, mission essential item and base infrastructure issues must be resolved in order to reach full operational capability.



Output 3.2—Capability for medium combined arms operations

The medium combined arms operations capability contributes to the strategic tasks of supporting wider interests, defending Australia, securing the immediate neighbourhood and supporting peacetime national tasks. It achieves this by providing tanks, mechanised and light-armoured forces to enhance combat power and weight for more demanding contingencies using surprise, offensive action and concentration of force in order

to disrupt or destroy enemy forces’ plans, cohesion and morale. It engages the enemy in close combat enabled by force protection and integral firepower.

This capability provides forces at high to medium readiness. These forces can be deployed in combined arms teams from company to battalion size and are drawn from armoured, mechanised infantry, medium artillery, combat engineers, army aviation and combat support units. This capability is based on the 1st Brigade in Darwin, Northern Territory.

Table 3.25—Capability for medium combined arms operations


Qua

lity

Achieve levels of preparedness directed by the Chief of the Defence Force for military response options with a warning time of less than 12 months, including the provision of a battalion-sized group within 90 days readiness notice.

Achieved. The medium combined arms operations capability met all allocated preparedness requirements for military response options in this reporting period. Personnel deficiencies in key trade areas and a high level of operational commitment for both personnel and equipment such as ASLAVs, have affected preparedness levels for some contingency response options. It maintains ongoing commitments of force elements for the Overwatch Battle Group in southern Iraq and the Reconstruction Task Force in Afghanistan and also provided force elements for the Security Detachment in Baghdad.Equipment and personnel shortages continue to be addressed with new retention and recruiting initiatives and the introduction of upgraded ASLAVs along with new Bushmaster vehicles and Abrams main battle tanks. Additional projects will deliver upgraded armoured personnel carriers in the near future.


Partially achieved. A number of training activities had to be reduced in scope due to operational commitments. Personnel shortages in several key trades and equipment deficiencies continue to affect the achievement of some core skills. Artillery units were deployed in an infantry role to Timor-Leste and Solomon Islands, which affected their collective training.

Qua

ntit

y

1st Brigade, comprising:a brigade headquartersa tank regiment a cavalry regimenta medium artillery regimenta combat engineer regimenta combat signal regimenta mechanised infantry battaliona combat service support battalion.

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Substantially achieved. The medium combined arms operations capability continued to have deficiencies in personnel and equipment holdings that affected its capacity to complete all required tasks. Recruiting and retention initiatives have been instituted to mitigate these shortcomings in the future.



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Output 3.3—Capability for light combined arms operations

The Army’s light combined arms operations capability is achieved by providing light, air-mobile forces available for immediate deployment, and is supported by components drawn from aviation, fire support and logistic units. It uses strategic, operational and tactical mobility to exploit its flexibility, adaptability and utility across the spectrum of conflict. The capability achieves this through surprise, rapid action and the ability to seize and hold ground.

The light combined arms operations capability provides forces at high readiness. These forces can be deployed in combined arms teams from company to battalion size. These combined arms teams are drawn from an armoured sub-unit, light infantry units, light artillery, combat engineers and combat support units and can also be supported by armoured and aviation units from other Army, Navy and Air Force outputs. This capability is based on the 3rd Brigade in Townsville, Queensland.

Table 3.26—Capability for light combined arms operations


Qua

lity

Achieve levels of preparedness directed by the Chief of the Defence Force for military response options with a warning time of less than 12 months, including the provision of three battalion-sized groups within 90 days readiness notice.

Achieved. The light combined arms operations capability met the levels of preparedness for all military response options. It provided force elements for the Baghdad Security Detachment and for operations in Iraq, Solomon Islands, Tonga, Fiji and Timor-Leste.


Substantially achieved. Most training requirements were met. Most airborne, air-mobile and amphibious training was restricted due to reduced availability of joint assets as a result of operational commitments.

Qua

ntit

y

3rd Brigade, comprising:a brigade headquartersan armoured personnel carrier squadrona field artillery regimenta combat engineer regimenta combat signal regimentthree infantry battalions a combat service support battalion.

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Achieved. Personnel and equipment availability for units were sufficient to meet preparedness requirements.



Output 3.4—Capability for Army aviation operations

The Army aviation operations capability provides aircraft and personnel at high readiness levels for tactical trooplift, counter-terrorism support, command and liaison, and reconnaissance operations. The capability is drawn from aviation units based primarily in the north of Australia.

The capability is based on a brigade of two aviation regiments and two independent aviation squadrons consisting of Kiowa, Iroquois, Black Hawk and Chinook helicopters, and fixed-wing King Air B-300 aircraft. The Kiowa helicopters in 1st Aviation Regiment are being progressively replaced by two squadrons of Tiger armed reconnaissance helicopters. Iroquois and Black Hawk helicopters are planned to be replaced progressively with MRH-90 trooplift helicopters commencing in late 2007.

Table 3.27—Capability for Army aviation operations


Qua

lity


Achieved. All levels of preparedness for military response options were met. The capability also provided significant staff effort to the armed reconnaissance helicopter and Project Air 9000 Trooplift Helicopter projects.


Achieved. The capability has been heavily committed to operations both offshore and domestically, which has provided the opportunity to practise core skills and professional standards across most warfare areas.

Qua

lity

34 S-70A9 Black Hawk—7,500 flying hours.

82 per cent (6,157 flying hours). The major underachievement was due to the pause in flying when 171 Aviation Squadron relocated to Sydney, ongoing support to operations offshore limiting full support to activities in Australia, and the flow-on effects of increased unscheduled maintenance and modification tasks during programmed servicing.

41 B-206 Kiowa—9,000 flying hours.[1]

93 per cent (8,417 flying hours). The underachievement was due to failure rates on the basic helicopter courses and a significant reduction in the rate of effort in 1st Aviation Regiment caused by commitments to operations overseas as well as a reduction in their maintenance workforce due to the introduction of the armed reconnaissance helicopter.

6 CH-47D Chinook—1,270 flying hours.

92 per cent (1,168 flying hours achieved). The minor underachievement reflects the limitations of the fleet to support non-operational activities while deployed on or preparing for operations offshore.

25 UH-1H Iroquois—2,200 flying hours.[2]

89 per cent (1,958 flying hours). The underachievement directly relates to the reduction in the Iroquois fleet in line with the aircraft’s planned withdrawal as part of the introduction into service of MRH-90.

6 ARH Tiger—1,010 flying hours.

49 per cent (498 flying hours). The underachievement directly reflects delays in the acceptance testing regime and the training program.

3 B-300 King Air—2,000 flying hours.

89 per cent (1,784 flying hours). The underachievement was due to slippage in the role equipment modification program and support to operations offshore limiting the amount of other programmed non-operational support activities.

Notes1. Initial allocation of 10,360 reduced in Portfolio Budget Statements 2006–07 (page 149).2. Initial allocation of 4,090 reduced in Portfolio Budget Statements 2006–07 (page 149).



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Output 3.5—Capability for ground-based air defence

The ground-based air defence capability is a flexible and mobile capability that is able to provide surveillance and defend airspace in conjunction with other land elements. The ground-based air defence capability provides air defence weapon systems at high to medium readiness, which can be deployed on land or on ships, to protect high-value

targets from air attack. The capability can also be deployed as part of a combined arms team and is an element of the Joint Australian Defence Force Air Defence System. This capability is drawn from the 16th Air Defence Regiment based in Woodside, South Australia. The regiment maintains a ground-based air defence capability consisting of the Saab Bofors RBS-70 Air Defence Missile System, combined with integral radar and command elements.

Table 3.28—Capability for ground-based air defence


Qua

lity


Partially achieved. The ground-based air defence capability was unable to meet all preparedness requirements as directed in the military response options. The introduction of upgraded RBS-70 and radar capability and shortcomings with RBS-70 ammunition clearances and the current fleet of vehicles affected the ability to meet all preparedness levels. These issues are currently being resolved.


Partially achieved. Most training activities were achieved, but operational commitments to Operations Astute and Resolute affected collective training.

Qua

ntit

y

An air defence regiment. Partially achieved. Due to equipment upgrades, the Army was only able to provide a reduced capability. Current equipment projects have delivered additional RBS-70 capability, but other projects such as LAND 121 (Project Overlander) will not be resolved in the short term due to project timelines.



Output 3.6—Capability for combat support operations

The combat support operations capability is designed to enhance the conduct of operations through effective communications, surveillance and specialist support, including construction engineering, topographical support, intelligence, and electronic warfare support. The combat support operations capability provides forces at high to medium readiness. Small elements of the capability are held at high readiness to support the high readiness units in other outputs. This capability is drawn from combat support units based throughout Australia.

Table 3.29—Capability for combat support operations


Qua

lity


Substantially achieved. The capability met most preparedness requirements as directed in the military response options however, there are personnel shortfalls in key trades for some preparedness requirements. These shortfalls are being progressively addressed through the critical trade remediation plan and retention initiatives. Equipment deficiencies and the introduction of new capabilities such as UAV and protected Engineering vehicles are being resolved through new acquisition projects and the limited redistribution of assets. The capability provided significant support to forces deployed on operations throughout the year in all theatres.


Substantially achieved. Operational deployments and shortfalls in personnel in critical trades affected the achievement of some training requirements.

Qua

ntit

y

Combat support units include:a surveillance and target acquisition regimentan engineer support regiment headquarterstwo Army Reserve engineer construction regimentstwo Regular Army engineer construction squadronsa construction engineer works sectiona topographical survey squadrona signals regimentan intelligence battaliona military police battaliona combat training centre.

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Substantially achieved. The combat support operations capability had sufficient personnel and equipment to provide a reduced, yet credible, capability.



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Output 3.7—Capability for regional surveillance

The regional surveillance capability contributes to the strategic task of defending Australia and supporting peacetime national tasks by providing forces to patrol the north of Australia in support of the national surveillance effort. The capability is maintained through the employment of predominantly Army Reserve personnel drawn from the local communities and the Indigenous population throughout the north of Australia, from the Pilbara to Cape York. The capability for regional surveillance is drawn from three regional force surveillance units: Norforce, the Pilbara Regiment and the 51st Far North Queensland Regiment.

Table 3.30—Capability for regional surveillance


Qua

lity


Achieved. All levels of preparedness for military response options were achieved. The three regional force surveillance units provided support to border protection operations in support of Operation Resolute.


Achieved. All training activities were achieved.

Qua

ntit

y

Three regional force surveillance units. Achieved. The regional surveillance operations capability had the personnel and equipment holdings necessary to complete the tasks required of it.



Output 3.8—Capability for operational logistic support to land forces

The operational logistic support to land forces capability provides supply, transport, maintenance and health functions at high to medium readiness in support of combat operations. Small elements of the capability are held at high readiness to support the high readiness units in other outputs. The capability is grouped in 17th Combat Service Support Brigade, which comprises Regular Army and Army Reserve units located throughout Australia.

Table 3.31—Capability for operational logistic support to land forces


Qua

lity


Partially achieved. The capability provided significant support to forces deployed on operations throughout the reporting period in all theatres. Additionally, a substantial number of logistic personnel were deployed to support relief operations in the Middle East and Timor-Leste, and personnel were deployed to train elements of the Iraqi Army. As a result of the continued support to operations and personnel shortfalls in critical trades, the capability was unable to meet all preparedness requirements as directed in the military response options.


Partially achieved. Operational deployments, limited exercise opportunities, and personnel deficiencies in a number of key trades affected the achievement of all training requirements.

Qua

ntit

y

17th Combat Service Support Brigade and its integral logistic support units including:

two logistic force headquartersa signals regiment two regular Army and one Army Reserve force support battalionsa personnel support battalion two integrated and one Army Reserve health support battalionsa psychology unit.

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Partially achieved. The logistic support capability had insufficient personnel and equipment to achieve all of the tasks required of it. A reduced yet credible level of capability was maintained.



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Table 3.32—Capability for motorised combined arms operations


Qua

lity

Achieve levels of preparedness directed by the Chief of the Defence Force for military response options with a warning time of less than 12 months, including the provision of a battalion-sized group within 90 days readiness notice.

Partially achieved. The motorised combined arms operations capability is a new capability for Army and is currently being grown. The ongoing requirement for Army to provide elements of the 6th Battalion and 2nd/14th Light Horse Regiment to support operations in Iraq and Afghanistan is slowing this growth path. Accordingly, the capability was not able to meet all military response options due to two major issues; an equipment shortage due to the large number of Bushmasters and ASLAV’s deployed to the Middle East and personnel shortfalls in key trades. These issues continue to impact on the raise, train and sustain requirements necessary to fully develop the motorised combined arms capability. They are however, being addressed through recruiting and retention programs and through the redistribution and acquisition of new equipment including Bushranger vehicles and upgrade of the ASLAV fleet.


Partially achieved. Most training activities for the 6th Battalion were unable to be completed due to operational commitments and introduction into service of the Bushmaster vehicle. Most activities for 2nd/14th Light Horse Regiment collective training were reduced in scope due to operational commitments and deficiencies in equipment and numbers of personnel deployed.

Qua

ntit

y

7th Brigade, comprising:a brigade headquartersa cavalry regimenta field artillery regimenta combat engineer regimenta signal squadrona combat signal regimenta motorised infantry battalion two reserve infantry battalionsa combat service support battalion.

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Substantially achieved for Regular Army units. Regular Army units achieved the required staffing levels and provided a credible level of preparedness, proven by the assumption of Ready Battalion Group requirements.Partially achieved for Army Reserve units. Army Reserve units achieved lower than expected staffing, which affected their capability. The reserve infantry battalions were transferred to the 2nd Division at the end of the reporting period under the Enhanced Land Force initiative.

Output 3.9—Capability for motorised combined arms operations

The motorised combined arms operations capability contributes to the strategic tasks of defending Australia and securing the immediate neighbourhood. The capability complements the 1st and 3rd Brigades by providing a range of highly mobile forces to conduct land manoeuvre operations using surprise, offensive action and concentration of force to disrupt or destroy enemy forces’ plans, cohesion and morale.

The capability provides forces at high to medium readiness. These forces can be deployed in combined arms teams from company to battalion size. Combined arms teams are drawn from an armoured unit, a motorised infantry unit, artillery, combat engineers and combat support units and can be supported by armoured and aviation units from other outputs. The capability is based in the 7th Brigade, an integrated formation of Regular Army and Army Reserve personnel located in Brisbane, Queensland.



Table 3.33—Capability for protective operations


Qua

lity


Achieved. The protective operations capability achieved the levels of preparedness directed for the six Reserve Response Forces drawn from the 4th, 5th, 8th, 9th, 11th and 13th Brigades. In 2006–07, the capability provided personnel for the transit security element in support of border security operations, and provided a company for security tasks in Solomon Islands. It also provided personnel to supplement Regular Army units both in Australia and on operations overseas.


Partially achieved. Most training activities were successfully conducted. Some collective training activities had to be reduced in scope due to circumstances such as the cancellation of Regular Army and overseas exchange exercises.

Qua

ntit

y

The 4th, 5th, 8th, 9th, 11th and 13th Brigades, each comprising:

a brigade headquarterstwo infantry battalionscombat and logistic support units.

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Partially achieved. The Reserve Response Forces were provided during 2006–07. While there were personnel shortfalls, the Reserves were still able to provide a reinforcement capability for the combat force component of the Army.

Output 3.10—Capability for protective operations

The protective operations capability contributes to the strategic tasks of being prepared to defend Australia and to support peacetime national tasks. While retaining long-term utility for defence of Australia tasks, the protective operations capability also provided reinforcements for Regular Army units. Elements of this capability are also trained to assist in domestic security incidents. The protective operations capability provides forces at high to low readiness. The capability is grouped in the 4th, 5th, 8th, 9th, 11th and 13th Brigades, which are Army Reserve formations based across Australia.



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Key risks and limitations Risk mitigation Status

To deliver current capability. Continuously monitor the delivery of combat ready land forces at a defined level of capability.

In place

To develop Army’s future capabilities.

Develop Army capabilities and continuously modernise the Army.

In place

To manage Army business. Continuously monitor the management of resources, administration, and security.Focus on stewardship of people and ensure resources are optimised.

In place

In place

To provide a safe and healthy workplace.

Continuously improve Armysafe to minimise operational and training hazards.

In place; ongoing review

External factors affecting the achievement of Army objectives.

Monitor the effectiveness of support to Army capability, and ensure science and technology are exploited and command information systems support is effective.

In place

Army risks




cost to Government

Table 3.35—Outcome 3: Army capability for the defence of Australia and its interests

Budget estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues

Sales of goods and rendering of services 188,452 245,498 250,990 5,492 2.2

Other revenues[4] 22,216 22,165 32,674 10,509 47.4

Total revenue 210,668 267,664 283,665 16,001 6.0

Gains

Reversals of previous asset write-downs 34,047 100,156 197,604 97,448 97.3

Sale of assets – – 1,093 1,093 –

Other gains 2,191 8,411 6,220 283.9

Total gains 34,047 102,347 207,108 104,761 102.4

Total income 244,715 370,011 490,774 120,763 32.6

Expenses

Employees 2,809,107 2,874,726 2,915,935 41,209 1.4

Suppliers 2,442,227 2,488,942 2,462,274 -26,668 -1.1

Grants 2,632 1,450 1,342 -108 -7.4


Finance cost 9,540 9,540 12,540 3,000 31.4


Foreign exchange loss – – 1,138 1,138 –

Other expenses 130 140 406 266 189.3

Total expenses 6,149,599 6,404,974 6,582,834 177,860 2.8


Notes1. Budget estimates are consistent with Portfolio Budget Statements 2006–07 (page 146).2. Revised estimates are consistent with Portfolio Additional Estimates Statements 2006–07 (page 95).3. Variation figures are the difference between the revised estimate and actual result.4. Other revenues include interest and dividends.



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Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Output 3.1—Capability for special operations 534,256 561,801 651,972 90,171 16.1

Output 3.2—Capability for medium combined arms operations 938,457 955,478 905,557 -49,921 -5.2

Output 3.3—Capability for light combined arms operations 977,728 1,006,738 1,014,530 7,792 0.8

Output 3.4—Capability for Army aviation operations 570,665 569,055 580,106 11,051 1.9

Output 3.5—Capability for ground-based air defence 125,526 115,905 104,521 -11,384 -9.8

Output 3.6—Capability for combat support operations 439,935 435,626 435,373 -253 -0.1

Output 3.7—Capability for regional surveillance 156,546 152,728 138,555 -14,173 -9.3

Output 3.8—Capability for operational logistic support to land forces 587,745 579,795 600,158 20,363 3.5

Output 3.9—Capability for motorised combined arms operations 593,810 595,904 679,110 83,206 14.0

Output 3.10—Capability for protective operations 980,216 1,061,933 982,180 -79,753 -7.5





The Air Force achieved all its operational outcomes in 2006–07.

The Air Force provided, and continued to develop, the capabilities to conduct offensive and defensive counter-air operations, land and maritime strike operations, offensive air support, support for combat operations, wide and focal area surveillance, maritime patrol and response, search and rescue, and tactical and strategic airlift, including aero-medical evacuation.

Regionally and internationally, the Air Force supported Operations Catalyst, Slipper, Astute, Quickstep and Gateway. The deployment of C-130 Hercules and P-3 Orion aircraft in the Middle East Area of Operations continued throughout the year. The C-130 Hercules aircraft have now flown more than 1,756 air logistic support and aero-medical evacuation missions since their initial deployment. The P-3 Orion aircraft continued their intelligence, surveillance and reconnaissance role and have flown more than 1,120 missions since these operations began.

The Air Force participated in border control operations in the north of Australia under Operation Resolute, with the P-3 Orion aircraft flying more than 1,477 missions in support of surveillance of Australia’s sea approaches. Domestically, the Air Force participated in the highly successful Avalon International Air Show, which provided

an opportunity for international and domestic industry, other military forces and the public to see many aspects of Defence’s air capability. The Air Force also participated in Exercises Pitch Black ’06 and Talisman Sabre ’07.

The Air Force has seen an unprecedented increase in operational tempo in recent times, which has now become the norm rather than the exception. The Air Force team has met the challenges put to it over the past 12 months and has successfully delivered the required government outcomes.

Wedgetail Airborne Early Warning and Control Aircraft of No. 2 Squadron, flying over Sydney Harbour.

Outcome 4Air Force capability



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No. 114 Mobile Control and Reporting Unit (No. 114MCRU), based in Darwin, provides the Air Force’s deployable air battle management capability. The unit operates a complex system of systems that provides the Government with a scalable option for deployment within Australia and overseas in response to a specific event.13

No. 114MCRU has a long and distinguished history. The unit was formed at the height of World War II and served with distinction in the Pacific theatre of operations. On the eve of Anzac Day 2007, 11 members of No. 114MCRU farewelled family and friends at Darwin International Airport, prior to departing on the unit’s first operational overseas deployment since 1966.

The first step towards this deployment was taken in 2005, when No. 41 Wing commenced a review of the tasks and structure of the units within its organisation. As part of the review, No. 114MCRU refined its roles and established six key capabilities that provided a broad selection of well-defined operational responses. These capabilities could be deployed singly or as a group to any location in the world. They ranged from the provision of small, highly mobile electronic intelligence teams or mobile communications facilities, through to the full-scale mobile control and reporting centre. This period also saw the unit introduce the TPS-77 tactical air defence radar system into Air Force service. The restructured capability was tested for the first time during the East Coast Air Defence Exercise in 2005, and further refined during Exercises Aces North and Pitch Black in 2006.

13. System of Systems (SoS) is a computer architecture term that started in the US military, but by 2004 spread into civilian use, especially in large corporations. In an SoS the individual parts can be very different, but when they work together important emergent properties can be exposed and delivered.

No. 114 Mobile Control and Reporting unit—Operation Slipper

TPS-77 being raised for Exercise Aces North ’06

In early 2007, No. 114MCRU was tasked to deploy to Kandahar Air Base in southern Afghanistan to take over from a United States Air Force squadron that had been providing the airspace management capability. From 8 August 2007, No. 114MCRU will be responsible for building a recognised air picture over a large portion of the Afghan national airspace and, under direction from the Combined Air Operations Centre, will coordinate all coalition air activity in support of the NATO-led reconstruction efforts and the US-lead counter-terrorism operations. In addition to these two key roles, the unit has also assumed regional interface control officer duties for Afghanistan, a role which sees air surveillance operators and technicians monitor and dynamically manage a number of important tactical datalinks networks. The unit has deployed both the mobile control and reporting centre and the TPS-77 radar to Afghanistan and will integrate a number of civilian air traffic control radars, remote radios and tactical datalink systems into the centre.

More than 70 operators, technicians and support staff from No. 114MCRU, No. 41 Wing and Combat Support Group are currently on the ground in Afghanistan, and another group is preparing to relieve them in the near future. These men and women play an important role in the ADF’s contribution to coalition operations in the Middle East. This deployment has been made possible by those people who have been posted to No. 114MCRU over the past few years, who ensured that the unit can continue to provide capable, flexible and innovative deployment options for the Government.




Output 4.1—Capability for air combat operations

The Air Combat Group is responsible for the provision of air combat capability including F/A-18 and F-111 aircraft, crews, weapon systems and support infrastructure at the level of capability required to provide air control, maritime and land strike, offensive air support and a limited reconnaissance capability. Hawk Lead-in Fighter aircraft and PC-9 forward air control training aircraft also contribute to this capability.

Table 3.37—Capability for air combat operations


Qua

lity


Achieved. Preparedness levels demonstrated through F/A-18 and F-111 participation in Exercises Bersama Padu ’06, Pitch Black ’06, Red Flag ’07, Bersama Shield ’07 and Talisman Sabre ’07.

Achieve a level of training that maintains core skills and professional standards across all assigned warfare areas.

Achieved. The Air Force’s training objectives were met through participation in a number of major exercises.

Maintain upgrade and refurbishment of the F/A-18 Hornet aircraft.

Substantially achieved. The majority of Hornet Upgrade Program targets were achieved, with only minor slippage to one component schedule.

Qua

ntit

y

26 F-111—3,800 flying hours. 101 per cent (3,830 flying hours).

71 F/A-18—12,000 flying hours. 93 per cent (11,127 flying hours). Achievement was limited by issues associated with the Hornet Upgrade Program which were initially under assessed. Additionally, recent ageing aircraft issues have limited serviceability and availability.

33 Hawk Lead-in Fighter—8,000 flying hours. 93 per cent (7,405 flying hours). The reasons for underachievement are primarily associated with flying instructor shortages. Additional instructors will be trained in early 2008.

4 PC-9 (forward air control training aircraft) —1,030 flying hours.

86 per cent (881 flying hours). Achievement was restricted by high staff workloads involved in controller course development and delivery.



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Output 4.2—Capability for combat support of air operations

The capability for combat support of air operations is provided by the Combat Support Group and involves the provision of operations support for expeditionary air bases within Australia and overseas during contingencies.

Table 3.38—Capability for combat support of air operations


Qua

lity


Achieved. Preparedness levels were demonstrated by support to ADF exercises, ongoing deployments to the Middle East, and short-notice deployments to Lebanon for evacuation operations and Indonesia for the Garuda plane crash response.

Achieve a level of training that maintains core skills and professional standards in conjunction with the Defence Support Group and the DMO across all operations.

Partially achieved. Operational commitments continued to place significant pressure on training programs.

Provide the level of preparedness required based on a force structure of:

two expeditionary combat support wingsone health services wing.

>

>

Substantially achieved. The levels of preparedness continued to be affected by overseas operational commitments. The change in structure to impart an expeditionary focus to both combat support wings has been completed, with both wings now having a mix of fixed airbases and expeditionary units.



Output 4.3—Capability for surveillance and response operations

The Air Force’s capability for surveillance and maritime response operations is provided by the Surveillance and Response Group. The provision of P-3 Orion aircraft, sensors, weapon systems, personnel and battle space management elements enables delivery of capability at the required level to support intelligence, surveillance and reconnaissance operations. In addition, the P-3 Orion can conduct maritime strike, underwater warfare, and search and rescue missions. Battle space management elements conduct air defence and airspace control.

Table 3.39—Capability for surveillance and response operations


Qua

lity


Achieved. Preparedness targets were met or exceeded, as demonstrated by the ongoing operational commitments to Operations Slipper, Catalyst and Resolute, and commitment to Operations Quickstep and Astute. Achievements included the deployment of a small air traffic control element of No. 114 Mobile Control and Reporting Unit to Afghanistan.


Substantially achieved. While delivering core skills, the high operational tempo placed pressure on No. 92 Wing to complete all non-core training activities.

Continue plans for the introduction of the Wedgetail airborne early warning and control aircraft into operational service in 2009–10.

Substantially achieved. 2007–08 Wedgetail aircraft planning requirements are substantially complete. Considerable effort and support continues to be provided to the project team. Test and development activities continue as expected. Training is scheduled to commence in 2008, subject to contractor delivery of supplies.

Complete the integration of the TPS-77 radar into the air defence surveillance system.

Substantially achieved. TPS-77 radar integration has been successfully proven, as demonstrated in Operation Acolyte and Exercises Pitch Black ’06 and Talisman Sabre ’07.

Qua

ntit

y 19 P-3 Orion aircraft—8,200 flying hours. 87 per cent (7,094 flying hours). The underachievement was due to serviceability and spares issues, limited maintenance capacity, and exercise cancellations.



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Output 4.4—Capability for airlift operations

The Air Lift Group is responsible for the provision of airlift capability to support operations. This includes the provision of airlift aircraft, crews and weapon systems at the level of capability required to provide air logistics support, airborne operations, aero-medical evacuation, special operations, search and survivor assistance, VIP flights, air-to-air refuelling, navigator training and surveillance operations.

Table 3.40—Capability for airlift operations


Qua

lity


Achieved. Preparedness was continually demonstrated, with an increase in deployments to the Middle East Area of Operations under Operations Catalyst and Slipper, and regionally for Operations Astute and Anode. Rapid and sustained responses to humanitarian crises and disaster relief such as the Garuda airplane crash and Solomon Islands tsunami, and search and survivor assistance and aero-medical evacuations were conducted.


Achieved. While some training was affected by ongoing operational commitments, core skills and standards were maintained to meet all operational activity and preparedness requirements.

Introduce the Boeing C-17 Globemaster III aircraft into service.

Achieved. All C-17 heavy lift aircraft transition, training, test and evaluation activities are on schedule and the initial operating capability validation program is complete. The achievement of a formal initial operating capability is planned for September 2007.

Maintain planning for the transition of the air-to-air refuelling capability in 2007–09.

Achieved. Planning for the transition from the B-707 to KC-30B Multi-Role Tanker Transport aircraft continues in support of its introduction into service.

Qua

ntit

y

24 C-130 Hercules—10,000 flying hours. 102 per cent (10,182 flying hours). The overachievement was due to higher rates of air logistics tasking than anticipated in the Middle East Area of Operations.

2 C-17 Globemaster—750 flying hours. 56 per cent (422 flying hours). Forecast usage for transition training was not expended due to unforeseen requirements to introduce a new aircraft type into service and achieve tasking commitments.

14 DHC-4 Caribou—4,100 flying hours. 94 per cent (3,838 flying hours). The fleet was affected by maintenance issues and spares availability.

4 B-707—1,100 flying hours. 95 per cent (1,046 flying hours). Maintenance issues associated with the ageing aircraft and some logistics shortfalls contributed to the slight underachievement.

2 B-737 BBJ—1,414 flying hours. 97 per cent (1,377 flying hours). Achievement is largely governed by customer requirements and preference.

3 CL604 Challenger—2,403 flying hours. 80 per cent (1,920 flying hours). The fleet underwent major servicing throughout the period, restricting availability at times. A heavy landing also contributed to the underachievement as repairs were carried out on that aircraft.



Air Force risks




To recruit for niche skills or fully qualified personnel.

An organisational rebalance and reshape activity will identify the priority areas for personnel resources. External recruiting will be supplemented by greater use of internal recruiting and re-training of the existing workforce. Retention of staff through a more flexible application of non-remuneration personnel policy initiatives and short-term incentives targeted to personnel critical to capability. Establishment of the high readiness reserve category.

Ongoing

To maintain a capability edge while aerospace combat capability within the region continues to develop.

Development of a networked Air Force, initially centred around the upgraded F/A-18 with enhanced weapons, supported by the Wedgetail airborne early warning and control aircraft, A-330 Multi-Role Tanker Transport and associated communications and information technology.

Ongoing

Dependency on the support of the DMO, the DSTO and the infrastructure and personnel services provided by the Defence Support Group to deliver Air Force capabilities.

Development of relationships with the support groups, refining the agreements to ensure they clearly set out the level of support sought and performance measures applied.

Ongoing

Table 3.42—Outcome 4: Air Force capability for the defence of Australia and its interests

Budgetestimate[1]

Revisedestimate[2]


($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues

Sales of goods and rendering of services 145,124 180,106 194,432 14,326 8.0

Other revenues[4] 18,168 18,599 25,025 6,426 34.5

Total revenue 163,291 198,706 219,457 20,751 10.4

Gains


Sale of assets – – -1,390 -1,390 –

Other gains – 1,129 10,945 9,816 869.4

Total gains 134,109 149,960 81,611 -68,349 -45.6

Total income 297,400 348,666 301,068 -47,598 -13.7

cost to Government



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Budgetestimate[1]

Revisedestimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Expenses

Employees 1,484,327 1,511,361 1,514,291 2,930 0.2

Suppliers 2,204,810 2,142,018 2,150,739 8,721 0.4

Grants 1,154 622 587 -35 -5.7


Finance cost 4,074 4,074 12,632 8,558 210.0



Other expenses 3,999 3,989 6,157 2,168 54.3

Total expenses 5,135,091 4,901,690 5,114,806 213,116 4.3




Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Output 4.1—Capability for air combat operations 1,593,252 1,587,820 1,749,414 161,594 10.2

Output 4.2—Capability for combat support of air operations 954,466 933,936 878,282 -55,654 -6.0

Output 4.3—Capability for surveillance and response operations 1,181,018 1,145,121 1,192,709 47,588 4.2

Output 4.4—Capability for airlift operations 1,108,955 886,148 993,332 107,184 12.1






$14.9 billion for capability

In 2006–07, the Government agreed to 14 first pass project approvals and 16 second pass approvals, plus a number of other studies and project development activities, at a cost of $14.9b. Notable approvals included the extensive structural refurbishment of additional F/A-18 aircraft and first pass approval for the Joint Strike Fighter aircraft. Other achievements during the year included the successful delivery of the joint combined training capability during Exercise Talisman Sabre ’07. The Rapid Prototyping Development and Evaluation Program continued to grow in strength and now has 142 member companies.

98

$14.9 billion for capability

99

strateGic planninG

The Strategy, Coordination and Governance Executive was established within the Office of the Secretary and the Chief of the Defence Force on 1 June 2007 as one of the initiatives flowing from the Defence Management Review. The Strategy Coordination and Governance Executive led efforts to deliver the Government’s strategic update, Australia’s National Security: A Defence Update 2007,14 released in July 2007 by the Minister. The Defence Update examines the key features of Australia’s current strategic outlook and outlines Defence’s contribution to Australia’s national security policy. It describes how Defence is responding to the Government’s requirement to shape the ADF as a balanced, adaptable and integrated military force able to meet a wide range of strategic tasks. The Defence Update also aims to inform Defence’s capability decisions, corporate management and military strategy.

policy aDvice for aDf operations

Defence provided advice for Australia’s operations in Afghanistan, Iraq, Timor-Leste and Solomon Islands and played an important role in liaising with other Australian Government agencies and partner nations. Defence-led interagency efforts to establish detainee management policy for current operations and facilitated opportunities for whole-of-government involvement in countries where the ADF operates.

14. The Defence Update 2007 can be found at www.defence.gov.au/ans/2007/default.htm.

Security policy

Defence continued to coordinate non-operational policy for Defence involvement in domestic security, including pandemic planning. It coordinated arms control issues, including Defence input into whole-of-government policy in response to the growing international concern over cluster bombs, which cause unacceptable harm to civilians.

Defence maintained continual involvement in counter-proliferation matters, including the Proliferation Security Initiative, and engagement in outreach activities on export control and counter-proliferation in the region. Defence coordinated Defence involvement on missile defence issues and managed Australia’s export control system for defence and strategic goods, including a significant additional amount of work with other government agencies required to implement various United Nations sanctions.

International engagement

Important initiatives were progressed with the United States to enhance interoperability, capability development and information sharing. Australia’s interests in the Asia–Pacific centred on counter-proliferation and capacity building in support of peace operations.

Defence pursued closer dialogue and interaction on defence issues through security agreements and arrangements with the Philippines, Indonesia, Turkey, France and Japan.

The Defence cooperation agenda prioritised defence governance, humanitarian assistance and disaster relief, peacekeeping, maritime security, counter-terrorism, and preparedness for chemical, biological, radiological and explosive incidents and pandemics.

Outcome 5Strategic policy



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http://www.defence.gov.au/ans/2007/default.htm

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Output 5.1—International policy, activities and engagement

This output provides strategic and international policy advice to the Government to enable it

to make sound judgments on, and develop appropriate responses to, changes in Australia’s strategic circumstances and specific security issues. It also uses strategic policy guidance to develop recommendations for the Government on international engagement activities and initiatives.

Table 3.44—International policy, activities and engagement


Qua

lity

Provide the Government with comprehensive and timely policy advice on current and emerging international defence issues.

Achieved. Defence responded in a timely and comprehensive fashion to international defence issues including:

ADF operations in Iraq, Afghanistan, Timor-Leste and Solomon Islandsevacuation operations in Lebanon and Fiji security issues in East Asia, focusing on strengthening Defence relationships on security issues, particularly counter-proliferation efforts to enhance Australia’s policy standing with the United States by improving access to US technology and developing cooperative initiatives, in support of both coalition operations and activities in the Asia–Pacific region.

>

>

>

>

Manage Defence’s international engagement activities to support Australia’s efforts to promote regional and global security.

Achieved. Defence built strong links with its allies and partners with contributions to and activities under the following key initiatives:

a Status of Visiting Forces Agreement between Australia and the Philippines, signed in May 2007 the Australia–Indonesia Framework for Security Cooperation (the Lombok Treaty) between Indonesia and Australia, signed in November 2006 treaty-level defence cooperation agreements with Turkey and France, with the former being tabled in Parliament in 2007 and the latter signed in December 2006 the Joint Declaration on Security Cooperation between Australia and Japan, signed by Prime Ministers Howard and Abe on 13 March 2007.

Defence increased its engagement in the ASEAN Regional Forum in the areas of peacekeeping and disaster relief. Defence supported Australia’s counter-terrorism agenda through regional engagement activities with Indonesia, the Philippines, Thailand, Malaysia, Singapore and Brunei. This included counter-hijack and hostage recovery training, intelligence exchanges and intelligence analyst training.Australia continued to provide assistance to the Papua New Guinea Government’s Defence Reform Program, successfully concluding the first phase in March 2007. Defence supported successful Pacific multilateral operations, Island Chief and Kuru Kuru, which involved 10 Pacific Island countries and 11 Pacific Patrol Boats.

>

>

>

>

Ensure Defence’s overseas representatives contribute to the effective management of Australia’s defence interests in the context of overall bilateral relationships.

Achieved. Defence continued to be well served by its 29 Defence Attachés and over 70 supporting Defence personnel in 51 countries. As the first line of Defence’s policy advice and engagement overseas, these highly capable personnel remained responsive to Australia’s defence and security interests globally.

Achieve the Defence Cooperation Program.

Achieved. In accordance with Defence’s International Engagement Plan, Defence successfully managed the 2006–07 Defence Cooperation Program. As detailed under ‘Defence Cooperation’, programmed activities were achieved within budgeted parameters. Priority areas under the program included defence management and governance, humanitarian assistance and disaster relief, peacekeeping, maritime security, counter-terrorism, and response preparedness to chemical, biological, radiological and explosive incidents and pandemics.



Output 5.2—Strategic policy and military strategy

This output contributes to the development of Defence strategic reviews and updates; policy advice on national, defence and military strategy; guidance for the development of long-term defence capability; defence aspects of non-proliferation and arms control; and advice and management of export controls for defence and dual-use items.

The Strategy, Coordination and Governance Executive continued to manage the funding agreement between the Government and the Australian Strategic Policy Institute (established in 2001), which functions as an independent strategic policy research centre. The Institute received $2.955m from Defence in 2006–07. This funding supports the Institute’s core research program of seminars, workshops and strategic dialogues between government and academic representatives.

Table 3.45—Strategic policy and military strategy


Qua

lity

Provide the Government and Defence with comprehensive and timely strategic policy advice on current and emerging strategic issues in the international, national and domestic environments that affect Defence.

Achieved. Defence provided comprehensive and timely advice to the Government and Defence by:

monitoring the environment and producing strategic guidance for Government consideration and to meet the requirements of the Defence Procurement Review and Defence Management and Finance Plandeveloping Australia’s National Security: A Defence Update 2007preparing four quarterly strategic reviewsproducing the 2006 Strategic Framework Handbook providing strategic guidance for principals and for Defence planners through strategic papers and Defence strategic planning guidance for operations undertaking assessments of the ability of the ADF to provide military response options at designated levels of readiness, and reporting this monthly to the Defence Committee, including recommended changes to preparedness levels, contingency planning and remediation of capability deficienciesdeveloping advice to Government on missile defence policy.

>

>

>

>

>

>

>

Provide comprehensive and timely advice to the Government and Defence on military strategy and future military concepts that reflect the changing strategic environment.

Achieved. Defence provided military strategic planning guidance for several contingencies, and timely and responsive strategic policy advice on developments that could require deployment of the ADF. This advice was provided to the Government, as well as various high-level Defence committees. It included revised military strategic priorities, the development of a defence space policy, ongoing evaluation of Defence and whole-of-government business continuity plans, and the development of future warfighting concepts.

Provide comprehensive and timely advice to the Government and Defence on proliferation issues and administer counter-proliferation and export control activities as required by legislation.

Achieved. Defence coordinated Australian involvement in the Proliferation Security Initiative, including regional outreach. The Executive coordinated the Government submission to the Senate on proposals to control cluster munitions, and developed advice on Australia’s export control system for defence and strategic goods, including additional work required to ensure compliance with United Nations Security Council sanctions resolutions.

Provide the Government and Defence with improved policy input to the whole-of-government domestic security and counter-terrorism programs.

Achieved. Defence coordinated non-operational policy aspects of Defence involvement in domestic security, including preparation for pandemics and input to whole-of-government management of chemical, biological and radiological threats.

Develop and enhance Defence’s policy workforce.

Achieved. This target was achieved through the delivery of Defence and strategic policy seminars; development of a strategic policy education framework; provision of strategic studies and counter-terrorism scholarships; support of strategic studies in universities; delivery of the pilot Australian Strategic Policy Short Course; and development of an ongoing course delivery plan.



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Strategic policy risks




Failure to understand the nature of the international strategic environment, understand Australia’s interests therein, and devise appropriate policy advice accordingly.

Recruit and develop staff with appropriate strategic thinking, analysis and policy formulation skills.

Under development

Failure to detect changes in Australia’s strategic environment, both generally and with respect to specific potential crises.

Continuously monitor the strategic environment to enable the shaping of appropriate policies.

In place

Failure to act in a timely manner to changes in Australia’s strategic environment.

Continue to develop Defence’s international relationships.

In place

An inadequate policy response to any changes in Australia’s strategic environment.

Develop staff skills and ensure personnel management practices focus on balancing competing priorities.

Under development

External factors affecting the achievement of Defence Cooperation Program objectives in regional countries.

Ensure alignment between Defence’s policy and its operational objectives.

Under development

Failure to undertake best efforts to achieve a coordinated whole-of-government response to security matters as appropriate.

Develop working relationships with other departments and agencies, and ensure representation of Defence interests and input into whole-of-government efforts.

In place



Table 3.47—Outcome 5: Strategic policy for the defence of Australia and its interests

Budget estimate[1]

Revisedestimate[2]


($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues


Other revenues[4] 920 203 2,067 1,864 918.2

Total revenue 9,683 12,863 10,990 -1,874 -14.6

Gains

Reversals of previous asset write-downs 1,033 1,814 6,495 4,681 258.0

Sale of assets – – 113 113 –

Other gains – 167 193 25 15.1

Total gains 1,033 1,981 6,801 4,819 243.2

Total income 10,716 14,845 17,791 2,946 19.8

Expenses

Employees 97,849 99,465 132,736 33,271 33.4

Suppliers 130,643 140,738 144,834 4,096 2.9

Grants 59 28 90 62 225.8


Finance cost 241 241 1,039 798 330.5

Write-down and impairment of assets 468 -558 1,558 2,116 -379.5


Other expenses -28 -21 -108 -87 421.3

Total expenses 235,345 248,332 295,162 46,830 18.9

Net cost of Outcome 5 224,629 233,487 277,371 43,884 18.8


cost to Government



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Defence cooperation

The Government’s strategic objectives in the region were achieved by:

contributing to the maintenance of regional security

working with allies, regional partners and others to shape the global and regional environment in a way favourable to Australia and the ADF

>

>

consolidating acceptance of Australia as an obvious and legitimate participant in deliberations on issues that affect regional security

encouraging and assisting with the development of the defence self-reliance of regional countries.

Expenditure for the Defence Cooperation Program in 2006–07 and the previous two years is summarised in Table 3.49.

>

>


Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) %

Output 5.1—International policy, activities and engagement 179,237 174,960 219,828 44,868 25.6

Output 5.2—Strategic policy and military strategy 45,392 58,527 57,543 -984 -1.7

Net cost of Outcome 5 224,629 233,487 277,371 43,884 18.8


Table 3.49—Defence Cooperation Program expenditure, 2004–05 to 2006–07

2004–05Actual result


2006–07Budget

estimate


($’000) ($’000) ($’000) ($’000)

Papua New Guinea 13,874 19,206 16,346 14,214

South Pacific region 35,289 36,559 35,538 33,439

South-East Asia 20,579 20,992 18,950 21,286

Other regional activities 1,507 2,340 2,921 2,926

Defence International Training Centre[1][2] 3,695 3,782 4,208 3,915

Total 74,945 82,879 77,963 75,781

Notes1. The Defence International Training Centre supports training provided in Australia to the defence forces of South-East Asia

and South Pacific nations and to other selected personnel overseas. The Defence International Training Centre is managed by the Air Force.

2. In the Portfolio Budget Statements 2006–07 the Defence International Training Centre was included in ‘Other regional activities’.



Papua New Guinea

In 2006–07, the Defence Cooperation Program with Papua New Guinea supported joint ADF–Papua New Guinea Defence Force (PNGDF) land and maritime exercises, infrastructure upgrades at PNGDF barracks and weapons and ammunition storage facilities, and extensive training in Australia and Papua New Guinea.

Australia continues to provide assistance to the Papua New Guinea Government’s Defence Reform Program. The first phase of this program (downsizing the PNGDF) concluded in March 2007. The Government is examining options to support the second phase, which will involve rebuilding a smaller, more effective and more affordable PNGDF. The program funded training for 94 PNGDF members.

Timor-Leste

The program for Timor-Leste returned to normal levels in 2006–07, following a brief period of reduced activity after instability in mid-2006. Australia continues its support for training programs and capability development activities in the Timor-Leste Defence Force Headquarters and related units, as well as the Ministry of Defence. Defence’s 17 cooperation advisers provided training focused on English language, engineering, medical and leadership capability. Ninety officers from Timor-Leste were trained during 2006–07.

South Pacific region

Defence engagement in the South Pacific aims to foster and support regional security and stability. Defence’s program focuses on enhancing the professional skills of the region’s security forces and on promoting the development of appropriate civil–military relations. During 2006–07, $33.4m was spent on Defence Cooperation with Cook Islands, Federated States of Micronesia, Kiribati, Palau, Republic of Marshall Islands, Solomon Islands, Tonga, Tuvalu and Vanuatu, which included training for 153 people. Defence engagement with Fiji was suspended following the coup in December 2006.

mulTINATIONAl ACTIvITIES

Defence continues to engage in the region through well-established multilateral exercises and activities in the South Pacific designed to enhance cooperation, skills development and understanding between Australia and South Pacific countries in the areas of humanitarian assistance and disaster relief, infrastructure development, maritime surveillance, small arms security and communications.

PACIfIC PATrOl BOAT PrOgrAm

The Pacific Patrol Boat Program has been operating in the South Pacific since May 1987. Under the program, Australia provided 22 Pacific Patrol Boats to 12 Pacific Island countries. Defence is committed to the Pacific Patrol Boat Program until 2027 and provides up to 30 Royal Australian Navy maritime surveillance advisers and technical advisers.

The Pacific Patrol Boat Program provides participating countries with a maritime surveillance capability to monitor and manage their exclusive economic zones. In 2006–07, Defence supported successful Pacific multilateral operations involving 10 Pacific Island countries and 11 Pacific Patrol Boats, with additional support from New Zealand, France and the United States.

Table 3.50 summarises Defence expenditure in the South Pacific region for 2006–07 and the previous two years.



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Table 3.50—South Pacific region expenditure, 2004–05 to 2006–07



2006–07Budget

estimate


($’000) ($’000) ($’000) ($’000)

Timor-Leste[1] 9,557 6,458 5,828 5,105

Vanuatu 1,267 1,766 1,808 1,740

Solomon Islands 1,307 2,351 3,131 3,749

Tonga 993 1,396 1,604 1,600

Western Samoa 603 2,333 726 732

Cook Islands 262 256 358 318

Fiji 2,996 5,539 4,416 2,811

Republic of the Marshall Islands 680 853 792 917

Federated States of Micronesia 795 989 910 836

Tuvalu 697 715 755 888

Kiribati 476 635 665 624

Palau 774 970 981 939

Multilateral general assistance[2] 14,881 12,298 13,564 13,182

Total 35,289 36,559 35,538 33,439

Notes1. Timor-Leste was reported under South-East Asia in the 2004–05 and 2005–06 Defence Annual Reports. Timor-Leste is now

reported under the South Pacific region. This change has revised the total actual expenditure for 2004–05 and 2005–06 as reported in previous annual reports.

2. Funding relates mainly to support for the Pacific Patrol Boat Program.

South-East Asia

INdONESIA

The Australia–Indonesia Framework for Security Cooperation (the Lombok Treaty) was signed on 13 November 2006. Australia ratified the agreement on 20 June 2007.

Senior-level dialogue continues to be an important element in Australia’s relationship with Indonesia. In 2006–07 this was illustrated by visits to both countries by Defence Force Chiefs and Service Chiefs. A number of bilateral exercises were conducted in the areas of airlift maritime security and peacekeeping.

Defence provided training to 110 Indonesian officers, including in information analysis.

SINgAPOrE

Australia’s bilateral defence relationship with Singapore supports a broad range of activities including exercises, training on a fee-for-service basis, and regular dialogue through senior officer visits and formal meetings. A significant aspect of the relationship is the access provided by Australia for Singapore to use Defence training facilities for land-based and fixed and rotary wing exercises and training.

mAlAySIA

Australia’s defence relationship with Malaysia is underpinned by the Malaysia–Australia Joint Defence Program, senior and working-level dialogue, training for 91 people in 2006–07, exercises and personnel exchanges. Australia also maintains a presence at Royal Malaysian Air Force Base Butterworth of approximately 170 people.



ThE PhIllIPINES

The highlight for Australia’s defence engagement with the Philippines during the year was the signing of a Status of Visiting Forces Agreement on 31 May 2007. Counter-terrorism, maritime security and defence reform assistance remained a focal point of the relationship, as well as the training of 123 Filipino officers.

ThAIlANd

Australia continues to provide training to Thailand (73 people in 2006–07), with a focus on English language and civilian personnel policy. The peacekeeping exercise Pirap Jabiru was expanded for the first time in August 2006 to include participation by other regional countries.

vIETNAm, CAmBOdIA ANd lAOS

Training and education is the current priority for Australia’s bilateral relationships with Vietnam, Cambodia and Laos, with a total of 73 people trained in 2006–07. The growth of the relationship with Vietnam was underscored by a number of senior- level visits. Australia continued to provide specialist peacekeeping training assistance to Cambodia.

BruNEI dAruSSAlAm

Australia’s defence relationship with Brunei Darussalam is supported by special forces training on a fee-for-service basis, maritime patrol exercises and assistance with Brunei’s fixed and rotary wing standardisation review.

fIvE POwEr dEfENCE ArrANgEmENTS

Australia’s membership of the Five Power Defence Arrangements remains a key element of defence cooperation between the five member nations (Malaysia, Singapore, Australia, the United Kingdom and New Zealand) and continues to provide a stabilising influence in the region. The arrangements continue to develop the group’s ability to address non-conventional regional security issues, including international counter-terrorism, humanitarian assistance and disaster relief.

Table 3.51 summarises Defence expenditure in South-East Asia for 2006–07 and the previous two years.

Table 3.51—South-East Asia expenditure, 2004–05 to 2006–07[1]



2006–07Budget

estimate


($’000) ($’000) ($’000) ($’000)

Singapore 165 172 285 313

Philippines 3,070 3,612 2,344 4,311

Thailand 3,779 2,903 3,185 3,418

Malaysia 4,704 4,199 4,665 4,384

Indonesia 6,060 6,130 5,064 5,426

Vietnam 1,631 2,256 2,259 2,691

Cambodia and Laos 1,135 1,661 1,109 712

Brunei Darussalam 36 59 39 31

Total 20,579 20,992 18,950 21,286

Note1. Timor-Leste was reported under South-East Asia in the 2004–05 and 2005–06 annual reports. Timor-Leste is now reported

under the South Pacific region (see Table 3.50). This change has revised the total actual expenditure for 2004–05 and 2005–06 as reported in previous Defence Annual Reports.



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Other regional activities

Australia’s Defence cooperation activities with India, Pakistan and Bangladesh seek to maintain productive and open dialogue and to further develop defence engagement where there are mutual interests.

INdIA

Defence cooperation with India included strategic dialogue, senior-level visits, training for eight people, and staff college exchanges to develop cooperation in maritime security, counter-terrorism and peacekeeping. Steps were made to finalise an Information Sharing Arrangement, which is expected to be signed in July 2007.15

PAkISTAN

Senior-level visits, staff college exchanges and training activities in Australia for 10 staff were the focus of Defence cooperation with Pakistan. The inaugural Australia–Pakistan Strategic Dialogue, held in Canberra in November 2006, provided an opportunity to exchange views on how the defence relationship should support shared interests, including in Afghanistan.

BANglAdESh

Defence cooperation with Bangladesh involved two Bangladeshi officers attending the Emergency Management and Defence Management seminars.

15. The arrangement was signed on 11 July 2007.



The Intelligence, Security and International Policy Group was a significant contributor in support of military operations and whole-of-government responses to transnational crime, particularly counter-terrorism and border protection, throughout 2006–07. In the face of complex challenges, the Intelligence, Security and International Policy Group achieved its performance targets through the diligent and effective planning of Defence Imagery and Geospatial Organisation, Defence Intelligence Organisation and Defence Signals Directorate activities. Outcome 6 has been further supported by the important contribution of the Defence Security Authority and Concepts, Capability and Resources Branch.

The International Policy Division became a part of the Intelligence and Security Group, to form the Intelligence, Security and International Policy Group from 1 June 2007. This alignment is recognition of an already close working relationship with International Policy Division and will enable the Intelligence, Security and International Policy Group to enhance its strategic policy advice in support of senior leadership decision-making.16

The Intelligence, Security and International Policy Group also made an important contribution to Defence’s intelligence, surveillance and reconnaissance capacity by completing a ‘roadmap’ to guide the integrated development of this important service, and reviewing the management of Defence’s foreign language capability.

In this demanding environment, Defence’s challenge is to identify, select, train and retain a skilled workforce in support of Defence and Government

16. International Policy Division reporting for 2006–07 remains under Outcome 5 for this annual report.

priorities. Strategies for ensuring Defence has professional, talented and committed staff continue to be a high priority, including education, training and career development programs within all agencies.


Defence Imagery and Geospatial Organisation

The Defence Imagery and Geospatial Organisation (DIGO) continued its support to national and Defence priorities across a range of intelligence and non-intelligence related activities during 2006–07.

The organisation matured its management processes to ensure full compliance with the Intelligence Services Act 2001, which stipulates the functions against which the DIGO may operate. This was supported by an extensive training program for all staff.

Staff development remained a key focus. Basic imagery analyst training was transferred to the organisation’s Canberra training facility, while a geospatial traineeship program in Bendigo continued to provide a skills base for the high-end geospatial workforce in Defence.

Work commenced on a new facility in Bendigo for the organisation’s Geospatial Analysis Centre. The new facility will include upgraded systems and security and will be occupied from 2008. This will enable the DIGO to operate as a single integrated entity, ensuring improved service to Defence and Government customers and a more efficient use of resources.

Outcome 6Intelligence



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Defence Intelligence Organisation

The Defence Intelligence Organisation (DIO) went through a period of great change and achievement during the year which included, in January 2007, restructuring significant parts of the organisation and reforming business practices. Commitment to military operations continued to be a primary focus of effort. At the same time, key Defence and Australian Government decision makers were provided with intelligence advice and products critical to Australia’s interests and strategic endeavours. Further enhancements were made to business information systems in support to operations. These included an improved capability for search and retrieval of intelligence information and establishment of better communication links.

In 2006–07, some intelligence functions of the new Joint Operations Command were integrated under the Director Defence Intelligence Organisation, to create a single point of coordination and accountability for operational intelligence and assessments for the ADF.

On 5 March 2007, the Minister presented the Nuclear Proliferation Section with a prestigious Australian Intelligence Community Medallion in recognition of its achievement in supporting the work of the community and whole-of-government counter-proliferation programs.

Defence Signals Directorate

The Defence Signals Directorate (DSD) continued to provide timely and accurate foreign intelligence support to military operations throughout 2006–07, reflecting the ever-increasing demand for intelligence products and services. Against this operational background, the Directorate continued to support a wide range of Australian Government customers, including assessment and policy agencies. It also successfully prosecuted its other high-priority intelligence missions, including counter-terrorism, counter-proliferation and combating international crime.

The Report of the Inquiry into Australian Intelligence Agencies (the Flood Inquiry) recommended a periodic review be conducted into the DSD’s performance against priority targets. The review of Directorate capabilities was completed in October 2006, and its conclusions formed the basis for a number of recommendations which were supported by the Government.

The Directorate also continued to lead efforts to secure government information technology networks, obtaining funding for several related initiatives to protect proprietary and private information in an environment where threats continue to increase.



Table 3.52—Intelligence


Qua

lity

Provide quality intelligence products and services.

Achieved. The DIGO provided quality intelligence support to the ADF in all major conflict areas, and support for national security authorities including the APEC meeting and other international forums hosted by Australia. It also continued its non-intelligence function by providing mapping products for Government and Defence use.The DIO improved the range and quality of information services to Defence customers including deployed forces.The DSD supported a range of Defence operations with timely intelligence that contributed to the security of deployments and to Australia’s defence policy development.

Ensure effective and sustainable intelligence support for the planning and conduct of ADF operations and for decision makers.

Achieved. The DIGO maintained a strong focus on supporting ADF overseas deployments and its national customers by providing high-quality geospatial data and products.The DIO reformed business practices and structures to meet increased demand in accordance with new command and control arrangements.The DSD worked closely with Intelligence, Security and International Policy Group partner agencies, by producing relevant signals intelligence on both tactical and strategic levels. This provided an edge to ADF operations that added to the effectiveness and security of Defence missions.

Maintain and develop first-rate defence intelligence and geospatial information capabilities.

Achieved. The DIGO’s Geospatial Analysis Centre continued its focus on the mapping programs conducted under government-to-government memorandums of understanding. The cooperative programs to map Timor-Leste and Solomon Islands were developed to the final stages of completion, while production for Vanuatu is well advanced. The final program, for the re-mapping of Papua New Guinea, entered the map production phase.The DIO’s technical projects and new capabilities, introduced in 2005–06, were further refined to enhance the organisation’s intelligence services and analytical functions.The DSD deployed capabilities developed under a number of Defence major capital investment projects, which improved its ability to deliver timely signals intelligence to Australian Government customers.

Maintain the knowledge edge by exploiting new technology.

Achieved. The DIGO continued its support to a number of Defence projects for which its geospatial intelligence capabilities can be developed and adapted to meet best practice. The DIO introduced new capabilities to enhance its access to and management of information streams.The DSD remained at the forefront of the use of technology both to secure Australian Government information and to produce timely signals intelligence.

Strengthen the intelligence contribution to the United States alliance, and to relationships with other intelligence partners.

Achieved. The Intelligence, Security and International Policy Group is successfully building on its relationships with the United States and other intelligence partners including the United Kingdom, New Zealand and Canada. These relationships are developing on a number of fronts in response to challenges such as counter-terrorism, counter-proliferation, transnational crime and support to military operations.

Improve investment and capability planning, accountability and resource and security management.

Achieved. The Intelligence, Security and International Policy Group’s internal management arrangements remain well established to continue to meet corporate governance and resource management requirements. It further refined its business processes and strategic planning, and developed its human resource management capability to better plan for future staffing needs. It also continued to improve security training for new and current staff.

Develop motivated, adaptable and skilled teams of highly competent professionals.

Achieved. Following a review, the DIGO adjusted recruiting strategies in keeping with training and development programs, and broadbanding was introduced as an additional measure to attract and retain staff. New analyst development initiatives contributed to increasing skill levels in the DIO workforce.In a challenging market, the DSD continued to meet its recruitment goals through a mix of graduate-level and non-graduate-level recruitment activities. The annual staff attitude survey also reported that the DSD workforce sustained its very high level of engagement compared with other benchmarked organisations.



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Intelligence risks




Defence’s ability to preserve its edge in intelligence collection, production and analysis is critically dependent on the availability of skilled and experienced personnel to support ongoing operations, the acquisition and exploitation of new technology, and the maintenance of effective security.The environment in which Defence operates is dynamic and demands that key intelligence priorities, requirements and capabilities be reviewed regularly.

Carefully targeted capital investment programs, strengthened agency partnerships, increased customer focus, implementation of a security renewal agenda, and development of business continuity plans.

In place

Given its reliance on experienced personnel, Defence has increased and broadened its recruitment strategies through programs such as Indigenous Cadets, targeted university recruitment drives, participation in the Australian intelligence community careers road show and greater incentives for staff with specific language and technical talents. Detailed personnel development programs have also been implemented.

In place

Significant initiatives have been implemented to enhance intelligence capabilities as part of the Defence Capability Plan. These include substantial and sustained investment in signals intelligence collection and imagery intelligence capabilities, enhanced geospatial information systems and improved intelligence processing and dissemination systems. These initiatives will assist in meeting increased requirements for intelligence support.

Ongoing



Cost to Government

Table 3.54—Outcome 6: Intelligence for the defence of Australia and its interests

Budget estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

INCOME

Revenues


Other revenues[4] 925 1,723 1,726 2 0.1

Total revenue 10,962 16,504 12,029 -4,474 -27.1

Gains

Reversals of previous asset write-downs 1,253 759 17,008 16,249 2,140.3

Sale of assets – – -667 -667 –

Other gains – 203 1,344 1,141 562.8

Total gains 1,253 962 17,685 16,723 1,738.5

Total income 12,215 17,465 29,714 12,248 70.1

Expenses

Employees 227,441 242,140 238,229 -3,911 -1.6

Suppliers 184,638 224,768 209,806 -14,962 -6.7

Grants 143 67 63 -4 -6.0

Depreciation and amortisation 65,237 66,769 62,308 -4,460 -6.7

Finance cost 590 590 240 -350 -59.3

Write-down and impairment of assets 1,155 -810 7,157 -7,966 -984.0


Other expenses -3 15 -57 -71 -486.0

Total expenses 479,201 533,538 517,695 -15,843 -3.0

Net cost of Outcome 6 466,986 516,073 487,981 -28,092 -5.4



Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Output 6.1—Intelligence 466,986 516,073 487,981 -28,092 -5.4

Net cost of Outcome 6 466,986 516,073 487,981 -28,092 -5.4




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On 5 March 2007, the Hon. Dr Brendan Nelson MP presented the Defence Intelligence Organisation’s Nuclear Proliferation Section with a prestigious Australian Intelligence Community Medallion in recognition of outstanding achievement in supporting the work of the intelligence community and whole-of-government counter-proliferation program.

The Nuclear Proliferation Section forms part of a dynamic Counter-Proliferation Group within the Scientific and Technical Analysis Branch of the Defence Intelligence Organisation and represents a truly unique Australian capability. The team, lead by Dr Nick Post, was established to help combat proliferation and provides technical and all-source intelligence assessments on global state and non-state nuclear developments.

During 2006, the Nuclear Proliferation Section produced specialised assessments and support on a range of nuclear programs of concern, led the creation of a new Australian intelligence capability and formalised an international agreement covering nuclear intelligence, energy security, and science and technology developments of concern.The broad-ranging output of the team has influenced government policy and capability development decisions, and has supported Australian intelligence interdiction activity and Defence operations.

The team’s proactive approach has also helped establish a collaborative interagency environment, enhanced the level of nuclear expertise within Australia, and increased access to allied intelligence and technical expertise in the tightly controlled field of nuclear technology.

The Nuclear Proliferation Section is highly regarded by allied counterparts, having established an enviable reputation for innovative independent analysis. The professionalism and analytical competency of the team has brought great credit on the team, Defence and the wider Australian intelligence community.

Defence Intelligence Organisation counter-proliferation award

The Hon. Dr Brendan Nelson MP with key members of the Defence Intelligence Organisation’s Nuclear Proliferation Section.



This outcome encompasses all the activities that Defence performs on behalf of the Government that are resourced by Defence’s administered appropriation. The administered appropriation provides resources to Defence on a ‘no win, no loss’ basis for specific purposes. It also includes revenue items for which the receipts are to be returned to Government.


Output 7.1—Superannuation support services for current and retired Defence personnel

This output reports contributions and the movement in liabilities associated with the two military superannuation schemes: the Defence Force Retirement and Death Benefits Scheme and the Military Superannuation and Benefits Scheme (MSBS). The Defence Force Retirement and Death Benefits Scheme was closed to new participants in 1991. Since then, MSBS has been available to all full-time members of the ADF. Both schemes are managed on Defence’s behalf by ComSuper. Output 7.1 includes the member contributions and employer contributions to both schemes, the liability to the Commonwealth for benefits under both schemes, and the payment of the MSBS Retention Benefit. The purpose of the Retention Benefit is to encourage members to serve until they have completed 20 years of service. Due to legislative amendments passed in 2005, the Retention Benefit is not available to members who enlisted after 6 October 2005. Since 1991, Defence has paid the MSBS Retention Benefit to eligible MSBS members after 15 years of continuous eligible service.

Output 7.2—Housing assistance for current and retired Defence personnel

This output reports dividends received on behalf of the Government from Defence Housing Australia

(DHA) and payments to the DHA to manage the Defence HomeOwner Scheme on behalf of Defence. The DHA is classified as a Government Business Enterprise and is required to make a commercial rate of return for the Government. Through Defence, DHA pays an annual dividend on its operating profit to the Government. The Government’s Competitive Neutrality Guidelines require DHA to make tax- equivalent payments to the Government in lieu of paying state and territory taxes. Tax-equivalent payments form part of the DHA’s dividend return to the Government.

The Defence HomeOwner Scheme is established under the Defence Force (Home Loans Assistance) Act 1990. The scheme provides eligible members of the ADF with a subsidy on the interest payable on a home loan.

Output 7.3—Other administered revenues and expenses

This output encompasses all other revenues and expenses recorded by Defence as part of the administered appropriation. It includes interest received from the United States Federal Reserve Bank on foreign military sales advances, interest received on official bank accounts, net foreign exchange losses and gains, and reimbursements from the United Nations for contributions to UN-led operations.

Explanation of significant variations

Output 7.1—The net cost was $43.0m (2.1 per cent) more than planned due largely to the inclusion of additional allowances in the definition of ‘salary’ for superannuation purposes. The increase was offset by lower than expected military contributions.

Output 7.2—The net cost was $1.7m (2.6 per cent) less than planned due to a higher than expected dividend paid by DHA and the inclusion of tax equivalent payments in the dividend payment.

Outcome 7Superannuation and housing support services for current and retired Defence personnel



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cost to Government

Table 3.56—Outcome 7: Superannuation and housing support services for current and retired Defence personnel

Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

ADMINISTERED INCOME

Revenue

Non-taxation

Sales of goods and rendering of services – – 235 235 –

Interest 3,000 4,005 12,277 8,272 206.5

Dividends 73,912 76,400 77,599 1,199 1.6

Millitary superannuation contributions 659,000 754,610 700,595 -54,015 -7.2

Other non-taxation – 788 -466 -1,254 -159.1

Total non-taxation 735,912 835,803 790,240 -45,563 -5.5

Total administered income 735,912 835,803 790,240 -45,563 -5.5

Administered expenses

Housing subsidies 10,000 11,000 10,487 -513 -4.7

Retention benefits 46,000 44,000 31,512 -12,488 -28.4

Military superannuation benefits 2,576,000 2,762,000 2,763,000 -1,000 –

Total administered expenses 2,632,000 2,817,000 2,804,999 -12,001 -0.4




Budget

estimate[1]

Revised estimate[2]


($’000) ($’000) ($’000) ($’000) (%)

Output 7.1—Superannuation support services for current and retired Defence personnel 1,963,000 2,051,390 2,094,372 42,982 2.1

Output 7.2—Housing assistance for current and retired Defence personnel -63,912 -65,400 -67,102 -1,702 2.6

Output 7.3—Other administered revenues and expenses -3,000 -4,793 -12,511 -7,718 161.0





Table 3.58 — Explanations of common variations across Defence outcomes

Explanation of variation

Outcome ($m)

One Two Three Four Five Six Total

Sale of goods and rendering of services

Revenue from other governments -0.6 -2.2 -3.3 -2.5 -0.1 -0.1 -8.8

Rations and quarters recovered from the ADF -0.1 -0.5 -0.7 -0.6 – – -1.9

Other minor revenue variances -0.1 -0.3 -0.5 -0.4 – – -1.3

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -4.1 -15.8 10.0 17.8 -3.6 -4.3 –

Variation to sale of goods and rendering of services -4.8 -18.8 5.5 14.3 -3.7 -4.5 -12.0

Other revenues

Higher than anticipated diesel fuel rebate 0.3 5.1 5.1 3.9 0.3 0.3 15.0

Proceeds of litigation in a claim by the Commonwealth. The claim commenced in April 2001 and concluded in June 2006 0.3 4.0 4.0 3.1 0.3 0.2 11.8

Other minor revenue variances 0.1 1.7 1.7 1.3 0.1 0.1 5.0

Recategorisation of grant revenue to ‘other gains’ – -0.5 -0.5 -0.4 – – -1.5

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -0.9 1.4 0.3 -1.4 1.2 -0.5 –

Variation to other revenues -0.2 11.7 10.5 6.4 1.9 – 30.3

Reversals of previous asset write-downs

Capitalisation of Specialist Military Equipment and Other Plant and Equipment previously below the threshold -5.5 21.7 57.9 29.0 8.4 3.6 115.2

Buildings identified via the revaluation program performed by the Australian Valuation Office 1.0 3.3 6.2 2.7 2.9 0.2 16.3

Further recapitalisation of Mulwala-related assets 0.7 2.0 4.0 1.8 1.9 0.2 10.6

Prior year adjustment made to the capitalistation of assets -5.4 -49.3 -66.3 -24.2 -2.2 -5.7 -153.0

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -11.7 -9.6 95.6 -86.1 -6.4 17.9 –

Variation to reversals of previous asset write-downs -20.9 -31.8 97.4 -76.8 4.7 16.2 -11.1

Explanations of common variations across Defence outcomes



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Outcome ($m)


Other gains

MPS-36 radar system at Woomera supplied by the German Government 0.1 3.2 3.0 3.0 0.1 0.2 9.6

Navy and Army decommissioning cost revision impact on profit and loss 0.1 2.5 2.3 2.4 0.1 0.2 7.5

Donation of the previously privately owned Air Art Museum in Nowra, NSW – 1.4 1.3 1.3 – 0.1 4.2

Recategorisation of grant revenue from ‘other revenues’ – 0.5 0.5 0.5 – – 1.5

Other minor revenue variances – 0.5 0.5 0.5 – – 1.5

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -1.1 0.7 -0.3 0.8 -0.1 -0.1 –

Variation to other gains -0.9 8.8 7.3 8.4 0.1 0.5 24.3

Employees

Underestimate in revised employee expenses mainly in relation to annual and long service leave accruals 10.6 35.9 64.8 33.7 3.0 5.3 153.3

Overachievement of full-time equivalent strength 1.6 5.6 10.0 5.2 0.5 0.8 23.7

Other net variations as outlined in Table 4.6 of Chapter 4 1.0 3.5 6.3 3.3 0.3 0.5 14.8

Reduction in ADF Reserves expenses associated with an increase in Reservists undertaking full-time service (salaries for Reservists undertaking full-time service are included in the Permanent ADF totals) -0.7 -2.5 -4.5 -2.3 -0.2 -0.4 -10.6

Transfer of funding to suppliers for an increase to the DMO service fee for civilian salary increases in accordance with the Defence Enterprise Certified Agreement -0.9 -3.2 -5.8 -3.0 -0.3 -0.5 -13.7

Lower than expected demand on the provision for the temporary backfilling of military positions -1.0 -3.4 -6.1 -3.2 -0.3 -0.5 -14.5

Underachievement in Defence People Plan and Recruitment and Retention initiatives due to delays in implementation -3.5 -11.9 -21.5 -11.2 -1.0 -1.8 -50.8

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -14.9 12.6 -2.0 -19.5 31.3 -7.4 –

Variation to employees -7.8 36.5 41.2 2.9 33.3 -3.9 102.3

Suppliers

Transfer of funding for the Enhanced Land Force initiative from a civilian employee expense to a supplier expense 0.5 1.5 1.7 1.5 0.1 0.1 5.5

Other minor suppliers variances 0.5 1.4 1.7 1.5 0.1 0.1 5.3

Reclassification of the Comcare premium from a military employee expense to a suppliers expense 0.4 1.1 1.3 1.2 0.1 0.1 4.2





Outcome ($m)


Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations 90.1 -51.7 -31.4 4.6 3.8 -15.4 –

Variation to suppliers 91.6 -47.7 -26.7 8.7 4.1 -15.0 15.0

Depreciation and amortisation

Capitalisation of other plant and equipment assets due to a reduced asset threshold 2.9 33.1 21.7 27.5 0.4 1.5 87.1

Reduction of the useful lives of the F-111 and F/A-18 aircraft. 2.9 32.7 21.4 27.1 0.4 1.5 85.9

Classified Army and Air Force assets brought to account 2.2 24.7 16.2 20.5 0.3 1.1 65.0

Information and communication technology brought to account 0.8 9.1 6.0 7.6 0.1 0.4 24.0

Recognition of high-frequency modulator relating to other plant and equipment assets and intangibles 0.7 8.3 5.4 6.9 0.1 0.4 21.8

Asset roll-outs, changes in useful lives, changes in scrap values and assets recognised for the first time 0.4 4.9 3.2 4.1 0.1 0.2 12.9

Reclassification of Australian Defence Industries Benalla lease as a finance lease 0.8 2.4 4.3 2.0 2.1 0.2 11.8

Minor projects rolled out earlier that expected 0.3 3.8 2.5 3.2 – 0.2 10.0

Reduction in depreciation of low-value other plant and equipment asset pool 0.2 2.2 1.5 1.9 – 0.1 5.9

Increase in useful lives of repairable items 0.2 1.9 1.2 1.6 – 0.1 5.0

Other minor depreciation and amortisation variances 0.1 1.1 0.7 0.9 – 0.1 3.0

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations 79.1 -52.0 -16.8 -3.7 3.6 -10.1 –

Variation to depreciation and amortisation 90.7 72.3 67.4 99.4 7.0 -4.5 332.4

Finance cost

Discounting restoration and decontamination provisions 0.7 5.0 5.9 6.0 0.5 0.1 18.2

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -0.1 0.6 -2.9 2.6 0.3 -0.5 –

Variation to finance cost 0.6 5.6 3.0 8.6 0.8 -0.3 18.2

Write-down and impairment of assets

Reconciliation of asset holdings recorded on corporate information systems 1.3 11.6 20.2 20.1 0.1 0.5 53.8

Specialist Military Equipment assets under construction reviewed and written off 1.2 11.0 19.0 18.9 0.1 0.5 50.7

Adjustment to pooled Specialist Military Equipment items in non-control accounts 1.2 10.9 19.0 18.8 0.1 0.5 50.5

Impairment of Orion Infra-Red Detection System 1.2 10.4 18.0 17.9 0.1 0.5 48.0




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Outcome ($m)


Information and communication technology asset review 1.1 9.7 16.9 16.8 0.1 0.4 45.0

Infrastructure stocktake adjustments 0.5 4.5 7.8 7.7 – 0.2 20.7

De-recognition of the submarine combat system simulator 0.5 4.1 7.2 7.1 – 0.2 19.1

Amounts incorrectly capitalised and revised asset valuations 0.2 1.4 2.4 2.4 – 0.1 6.4

Provision for obsolescence adjustments as a result of increased war stock 0.1 0.7 1.3 1.3 – – 3.4

Reversal of a prior year accruals -0.1 -1.3 -2.3 -2.2 – -0.1 -6.0

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations -9.7 38.1 -17.8 -17.2 1.5 5.1 –

Variation to write-down and impairment of assets -2.5 101.1 91.7 91.6 2.1 8.0 291.9

Other expenses

Increase in ex gratia payments for Reece Hire, Melbourne/Voyager and the Kovco family – 0.2 0.6 2.1 -0.2 – 2.6

Greater than expected Defence Administration Scheme payments – – 0.1 0.2 – – 0.3

Foreign exchange losses – – 1.1 -0.3 -0.4 -0.1 -0.3

Progressive refinement of Defence’s cost attribution rules to reflect changes in workforce distributions and expenditure patterns and other variations – 0.3 -0.3 -0.2 0.1 – –

Variation to other expenses 0.1 0.5 1.4 1.9 -0.5 -0.1 3.2

Total outcome variation 199.4 198.5 57.1 260.7 43.9 -28.1 731.5




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