SENATOR JOHN FAULKNER
Minister for Defence
Tuesday, 17 November 2009
049/2009
DEFENCE BUDGET AUDIT RELEASED
The Minister for Defence, Senator John Faulkner, announced today that the
Government has released the 2008 Defence Budget Audit, also known as the
‘Pappas Review’.
”The Audit has been released by the Department of Defence in response to
an FOI request. Given the extent of interest in the Audit, I believe broader
public release is warranted. Accordingly, a copy of the Audit as released
under FOI has been made available on the Defence website, together with a
brief response to the Audit,” Senator Faulkner said.
“The Audit advised on the efficiency and effectiveness of the Defence budget
and how to improve budget management. It was independently conducted by
a respected external consultant, Mr George Pappas working closely with
Defence.
“Although far from being the only input into our decision-making, the Defence
Budget Audit was a rigorous, high quality study that gives important insights
into how the reform program was developed.
“Releasing the Audit shows our commitment to transparency in Government
and highlights the robust decision-making that underpinned the Defence
White Paper and the Strategic Reform Program.” Some of the material in the
Audit has been exempted from release by the FOI decision maker, on
grounds such as sensitive military capabilities, privacy and commercial
sensitivities, and material yet to be considered by Cabinet.
Senator Faulkner also said the Defence Strategic Reform Program will
generate significant reforms over the next ten years to deliver gross savings of
around $20 billion. These savings will be reinvested to build stronger military
capabilities to defend Australia and its national interests.
“The Government accepted the vast majority of the Audit recommendations
and these will be implemented through the Strategic Reform Program,”
Senator Faulkner said.
“We agreed to an alternative funding model which provides funding certainty
for planning and real funding growth to meet the growing cost of the military
equipment we will need in an increasingly demanding world. This model is
similar to that recommended in the Audit and, we believe, more appropriate
given current fiscal circumstances.”
Senator Faulkner also pointed to his establishment of an oversight committee,
the Defence Strategic Reform Advisory Board (DSRAB), to provide careful
external scrutiny of the reform program.
“DSRAB will enable Defence to draw on the combined insights of senior
private-sector leaders with experience in large scale organisational reform as
well as the broader whole-of-government perspectives of secretaries of key
government departments. It will be chaired by George Pappas and will report
to me quarterly. Other board members I have appointed are eminent
Australians, John Fletcher, David Mortimer and Linda Nicholls.”
The Defence Budget Audit made a number of recommendations regarding the
future of the Defence estate, including consolidating the Defence estate into a
‘super-base’ model. The Government does not accept these
recommendations.
While acknowledging that any move to a 'super-base' model would have
strategic, economic and social impacts, the Defence Budget Audit was
focussed on financial benefits and therefore did not fully examine these
broader issues.
“It would be irresponsible for the Government to agree to base rationalisation
without a more comprehensive examination both of national strategic
requirements and community considerations.' Senator Faulkner said.
Senator Faulkner has asked Defence to undertake further work on the issue
of base consolidation. A comprehensive departmental review, including a
strategic assessment of Defence's basing requirements and a detailed
financial analysis of long-term costs and efficiency gains of different basing
mixes, will develop options for changes to the estate over a 25-30 year period.
“It is envisaged that a detailed study of this type will take 12-18 months to
complete. An independent commission will then be appointed to
consider Defence's recommendations. This commission will conduct
substantial public consultation before reporting back to the Government,”
Senator Faulkner said.
The Defence Budget Audit and a brief Departmental response can be
downloaded from:
NEWS 
