A costly and unpopular restructure of the Defence bureaucracy has claimed its second major scalp with former Defence Capability Development Group chief, Air Marshal John Harvey, now on ''gardening leave''.
Air Marshal Harvey was replaced by his former head of capability systems, Vice-Admiral Peter Jones, on or about December 6. He is not going to another position in Defence, sources say.
The Canberra Times was told his abrupt departure was driven by Defence Minister Stephen Smith's decision to create two new associate secretary positions as part of the response to the Black Review into Defence accountability.
Described by colleagues and friends as ''highly informed, hardworking and well organised'', the Air Marshal's competence has never been questioned.
Minister for Defence Materiel Jason Clare said on December 7, ''We've done a lot of good work this year.
''We've approved 35 projects worth more than $6 billion.''
That total, well above the 10-year average of 28 projects, was a direct reflection on the work of Air Marshal Harvey and his team.
The Capability Development Group prepares proposals for new planes, ships and other defence equipment for consideration and approval.
The 57-year-old, who joined the RAAF in 1977 and went on to serve as a navigator aboard Canberra bombers and F-111s, was apparently given ''five minutes' notice'' in August his position was being made answerable to one of the associate secretaries.
''He just wouldn't wear it,'' a colleague said.
Former Defence Materiel Organisation chief executive officer Stephen Gumley ''retired'' in July for much the same reason. Once a direct report to his own minister and the Defence secretary, Dr Gumley had enjoyed ''associate secretary'' status.
On being told he was about to lose much of his autonomy and become a direct report to a still as-yet unappointed intermediary, Dr Gumley quit on July 6, giving just one day's notice, sources said.
Neither Air Marshal Harvey nor Dr Gumley could be reached for comment. No comment had been received from Defence on the departure of Air Marshal Harvey at the time of going to press.
Rufus Black, who conducted the accountability review, did not specifically recommend the associate secretary positions.
He did, however, subsequently defend them in a television interview.
They are expected to cost well over a million dollars a year with a salary component alone of almost $800,000.
Critics have described them as ''a whim of the Minister''.
The two frontrunners for the new positions are Customs and Border Protection Service chief operating officer Mike Pezzullo as associate secretary - capability and the current deputy secretary - defence support, and Simon Lewis, as associate secretary - chief operating officer.
Mr Pezzullo, whose name was mentioned as a potential alternative to Duncan Lewis when the former National Security Adviser was made Defence Secretary on August 5, is also believed to have been considered for the still-vacant adviser post.
Mr Lewis's former deputy, Margot McCarthy, has been acting adviser since he went to Defence.
In the event Mr Pezzullo does become the next adviser, Brendan Sargeant, currently Defence's deputy secretary of strategic reform and governance, is considered a possibility for either associate secretary post.
An announcement on the associate secretaries could be made as soon as next week.
Further salary creep within the upper echelons of Defence seems inevitable. The Australia Defence Association is already calling for the three service chiefs and the vice-chief of the Defence force to have their remuneration packages upgraded to associate secretary equivalents.
If recommendations contained in a Remuneration Tribunal report are adopted each associate secretary should be paid about $370,500 a year.