One of the few aspects of the Australian Commission of Audit report not to send shockwaves through the nation's leadership this month was that dealing with defence. The commission’s findings of "difficulty in instituting change", "lack of dynamism", the need for a "simpler and leaner structure" and doubts over the joint leadership model – known as the diarchy – bring on a feeling of deja vu.
Anyone who has read the 2011 Black Review into Defence Accountability, for example, will notice the familiarity. It also pulled no punches in finding that "the current arrangements constrain leadership capability and management capacity by reducing the ability of decision makers to exercise strategic control", which in turn echoed the 2008 Defence Budget Audit that highlighted a lack of strategic direction. The commission of audit has, gloomily but predictably, concluded that "it is not clear that Defence Headquarters in Canberra has the capacity to drive efficiency and better policy outcomes".
Why is defence unable to change and adapt? Why can’t an organisation with so many knowledgeable, skilled and experienced leaders actually determine a reform strategy and put it into practice? Despite the river of damning findings, the key failure is this: people don’t know who is in charge. And it starts at the top.
Our defence edifice is headed jointly by the (civilian) Secretary of the Department of Defence and the (uniformed) Chief of the Defence Force – the diarchy. When Sir Arthur Tange attempted to unify the services and the department in the 1970s, he achieved only partial success. Such a dramatic reform required compromises that left us with a defence organisation where decisions, at almost every level, are made "co-operatively" rather than through clear chains of command. Our defence organisation, the most complex and highest priority area of government, the one arguably most in need of clear and unambiguous leadership and decision making, is the only one with two leaders.
Like the government of ancient Sparta, authority in this model is diffuse. High-level procurement and sustainment decisions are not made, but agreed between a whole range of senior players, including the secretary and CDF, the service chiefs, Chief Capability Development Group and the CEO Defence Materiel Organisation (who himself is partly responsible to the secretary, partly to the CDF and partly to the minister). Personnel management is partly the job of the relevant service chief, partly of the chief operating officer and partly of the deputy secretary, defence people. Intelligence support is partly the job of the services, partly of Joint Operations Command and partly of the deputy secretary of intelligence and security. Is it any wonder that, when the Australian National Audit Office undertakes its major audits of defence, it budgets in hundreds of hours just to determine who in defence is in charge of specific outcomes?
This problem is most challenging when it comes to determining strategy. White papers particularly fall victim to the flaws in defence’s structure. Effectively, white papers represent a compromise position of each of the three services and the other various defence fiefdoms, each trying to protect their individual interests.
After a marriage of some 40 years, has the diarchy had its day, and is divorce the best option? As a minimum, the commission of audit recommends revised accountability arrangements and clearer delineation of authority for each arm of the diarchy.
Should a split ensue and Australia move to a model like the one across the Tasman (the New Zealand Defence Force operates separately to the Ministry of Defence), then the department should retain responsibility for the corporate aspects of defence policy including capability development, acquisition and sustainment along with intelligence and security, and science and technology.
With which parent would defence strategy go in the event of a divorce? Here, I would suggest a new model. Successive governments have set the strategic direction for defence but the department has often been a millstone around the neck of implementation. Irrespective of whether this has been due to a lack of adequate funding or the recalcitrance of defence mandarins, the model has not worked and the size and structure of the ADF have not adapted to embrace the strategy. Perhaps what is needed is a high-powered, independent commission, answerable to the Parliament, for the setting of the nation’s strategy for national security including defence, with responsibility for setting the size and structure of the ADF and the nature and type of capabilities it uses based on the strategic outlook. Through the minister, it would direct defence and the ADF to achieve results and it would be this body that the secretary and CDF would be accountable to.
Whatever the answer, boldness is needed now. If the commission of audit is correct, defence headquarters is inherently incapable of resolving these issues for itself.
Gary Humphries, a former senator and ACT chief minister, was shadow parliamentary secretary for defence materiel in the Abbott opposition. He is now a lobbyist.