Poor performance won’t improve while it is kept hidden

Australia's Defence Department is finding new ways to tell taxpayers and the Parliament less about how it's spending our money.

Written by

Michael Shoebridge

The Government has just tabled its ‘Portfolio Additional Estimates Statement’ in the Parliament to provide foundational information for our elected Senators to understand what the Department of Defence is trying to achieve with the $52.6bn of taxpayers’ money it has to spend this financial year, and to help them assess its performance in providing for Australia’s security. 

Unfortunately, the document is an exercise in secrecy and opacity. But what residual information Defence still discloses in it shows deteriorating performance – on workforce, on sustaining military systems, on building facilities in northern Australia and in delivering new capability to the men and women of our military.

Defence Minister Richard Marles has used the ‘Strategic Direction’ section of the document to say that “Since the PBS 2023-24 Defence continues to implement the Government’s response to the Defence Strategic Review including the following six initial priorities”. They are:

  • investing in conventionally-armed, nuclear-powered submarines through the AUKUS partnership;
  • developing the ADF’s ability to precisely strike targets at longer range and manufacture munitions in Australia;
  • improving the ADF’s ability to operate from Australia’s northern bases;
  • lifting our capacity to rapidly translate disruptive new technologies into ADF capability, in close partnership with Australian industry;
  • investing in the growth and retention of a highly-skilled defence workforce; and
  • deepening our diplomatic and defence partnerships with key partners in the Indo-Pacific.

But that clarity at the start is a high-water mark.  The document is almost wilfully opaque even to knowledgeable readers, and it tells us even less than such documents from past years.

The AUKUS submarine program is a world of analysis in itself and too big to cover in this overview note.  However, the formation of the new Australian Submarine Agency as a separate agency within the Defence portfolio is turning out to make understanding what’s being done and what’s being spent even harder.  ASA is still laced into the bigger Defence budget so reporting on different elements – like the capital investment program for the AUKUS submarines – falls somewhere between ‘big Defence’ and the ASA. It looks like getting the right officials to even be in the same room at the same time to talk to Senators will be an achievement. 

Leaving that aside, Defence is not delivering on the next four of these Government priorities if results and time are the relevant measures to assess performance. 

A year on from the Strategic Review being handed to Richard Marles, there is little progress establishing domestic production of munitions – with Defence in January announcing a minimal $37.4 million for the big US giant Lockheed Martin to study the issue, and a statement that Australia will be a place that Lockheed Martin will start to assemble an ‘initial batch’ of a 70km range land attack missile GMLRS, potentially in 2025. Those missiles cannot be characterised as part of any long range strike capability for the ADF.  No Australian companies have been given production contracts and companies like Kongsberg and Rafael that have both proposed missile manufacturing plants for Australia have not been given contracts to establish them.

Facilities construction in northern Australia has slowed from the plans laid out in the May 2023 budget, with training ranges and facilities in locations like RAAF Tindal and Cocos Island airfield being delayed.

‘Disruptive capabilities’ that are in use in Ukraine and by most serious militaries are still not in ADF service.  Companies making counter drone systems – like DroneShield and EOS – have contracts to supply Ukraine, including through US Government purchases, but have no supply contracts for our own military. 

Armed drones that cost less than $10 million each are defining features of conflict now, but Australia has none in its Defence inventory.  The drones Defence is buying cost multiple millions of dollars each in the case of Boeing’s Ghost Bat ($846m program costs for 10 UAVs so far, with the eventual desired cost per UAV apparently $10 million) and Anduril’s large unmanned underwater vessel, or hundreds of $millions each in the case of the Triton: Australia’s Air Force is buying 4 UAVs for a program cost of now over $3 billion.

No matter how capable they are individually, the drones Defence is buying do not give the ADF the supreme advantage drones offer – affordable mass that can be used, lost and replaced. Companies making cheap drones that can be purchased in their hundreds or thousands – like SYPAQ Occius or C2 Robotics – have no supply contracts with Australia’s military. 

In contrast, Russia is paying around $AUD575,000 per drone for thousands of disposable Iranian-made Shahed drones its using and losing every month in its war against Ukraine  – and Russia knows it’s being price gouged by Iran. It didn’t buy Iranian drones until 2022 but now has contracts for them worth some $AUD6.7bn with Iran, which are delivering despite international sanctions making things harder.

His goals are reprehensible, but Putin and his Russian military bureaucracy are showing that speed in adopting cheap, effective drones at scale is possible. Meanwhile, the Ukrainians are not just buying similar drones by the thousand, they are building their own drone industry with the urgency and creativity they’ve demonstrated since Putin began his war. 

And on priority 5 – growing and retaining a highly-skilled defence workforce – Defence’s years long failures to meet ADF workforce targets continue. The ADF is unlikely to have the men and women it needs to crew and operate the ships, aircraft, vehicles and weapon systems Defence is buying. It seems extraordinarily unlikely that Defence will turn its deteriorating workforce around to grow by 8,997 from its forecast for 2023-24 to 2026-27 – but that is the funded requirement set out in. these additional estimates documents.  

On the broader national defence workforce, Defence’s lack of investment in Australian defence industry – for missiles, munitions, drones or counter drone systems as key examples – is creating a second workforce crisis in industry, at a time when this part of the national defence workforce should be growing and supplying our military with increased combat power.

Defence is not delivering value for the $52.6 billion that Australian taxpayers are giving it this financial year.

And it’s getting harder to see what Defence is doing with all this public money: the amount of information Defence is providing to the Parliament and to key external oversight agencies like the ANAO is being reduced by decisions inside Defence to withhold information on claims of national security concerns. The ANAO’s latest Major Projects Report published on 9 February is Exhibit A.   Schedules for new capabilities being introduced into service are being withheld when in years past they have been disclosed, and departmental performance or lack thereof is being obscured.  This has given birth to a new Defence acronym – “NFP” meaning Not for Publication even where Defence can find no reason to make the information classified. 

This new acronym makes an appearance in the Defence Additional Estimates Statement too – with any details about the budget of Defence’s Space Program now withheld ‘due to commercial sensitivities’. Such sensitivities may well be budget cuts and the consequences to Defence of the Albanese Government cancelling a $1.2 billion satellite program with NASA.

Claims that national security will be adversely affected by disclosure of performance and schedule information for Defence projects are hard to take seriously give the bulk disclosure of these details to the US Congress that the Pentagon, our big US ally’s defence organisation, provides routinely.

The US has to strike balances between public and Congressional disclosure and has more highly classified and sensitive programs and information than Russell Hill.   But Pentagon officials do not use national security fears to hide information from the American public or key part of the American political system – including oversight agencies like the Congressional Budget Office and the Congressional Research Service. 

Analysis of US submarine and naval fleet programs and plans shows the level of disclosure there.  And it puts the Australian Defence organisations’ levels of disclosure to shame – even while protecting truly classified information.

A recent example on the challenges with, numbers of subs being produced and number of subs available to the US Navy was published by the Congressional Research Service on 7 February. The CRS can only do this work for the US Congress because it gets underpinning data and details from the US Navy.  No Australian version of such a report could be provided on any single military program – because of the poor level of disclosure from Russell Offices.

It is hard not to think that the real reason that Defence is reducing the level of information it discloses is that it would show deteriorating performance and low levels of achievement.  That is indeed a national security concern – but it is one that would be helped by disclosure, because then it might be addressed.  Sunshine and disclosure are antidotes for poor performance.

The fact that under performance still can’t be completely hidden when it comes to retaining and growing the numbers of men and women in our military, in building better facilities in our North and in getting any actual warships into our Navy’s fleet in the next ten years – is a glaring indicator that the performance that we are not hearing about is probably even worse.

The Government’s stated purpose in providing the Defence budget and additional estimates statements is to ‘provide information, explanation and justification to enable Parliament to understand the purpose of each outcome proposed in the Bills.’

Any reading of the tabled documentation shows this purpose is not being achieved.

Openness is a key accountability issue for Defence portfolio ministers to Parliament and for Defence officials, military and civilian, appearing before the Senate.  Ministers and officials need to commit to changing the direction of public disclosure to deliver the increased transparency and openness that the Albanese Government promised taxpayers at the start of their term of government. 

Australia’s national security is too serous to be treated as something to be left in the unaccountable and increasingly invisible hands of our senior civilian and military officials.