The Pen-Pusher is Mightier

If nothing else, the report of the Board of Inquiry into the fatal crash of a navy Sea King helicopter in Indonesia in 2005 revealed that the persistent problems in the Defence Department of the past thirty years remain. At the time of the crash in which five people were killed, knowledgeable commentators pointed out that the Sea Kings had been in service for some thirty years and were too old to be safe. The board found that the crash resulted from short cuts in maintenance procedures brought about in part by funding shortages and too high a tempo of operations for the personnel available. That comes as no surprise; critics have been commenting on these issues for at least two decades.

But there are other elements in the report and its reception that reflect the excessively bureaucratic and blame-avoidance culture that rules Defence. For example, the widely respected Chief of Navy, Vice-Admiral Russ Shalders, publicly accepted personal responsibility for the failures. This is silly; he can’t be responsible for the work of every mechanic servicing helicopters. On the issue of budget cuts, he is hardly responsible for what are systemic failures within the Defence Department. On the other hand, if he is truly responsible, he is also accountable and should have offered his resignation which, of course, a sensible minister would decline to accept.

Regrettably, our multitudinous bureaucracies are rarely accountable for anything. They peddle the myth embedded in the political theory of the Westminster system that ministers are accountable. Ministers are certainly accountable to the parliament for the performance of their departments but no one in his right mind considers that such accountability reaches down to the performance of individuals. Assertions to the contrary represent nothing more than political posturing.

There are however more serious manifestations of Defence’s problems. The defence organisation has been under constant scrutiny by parliamentary inquiries, appointed reviews and internal examinations since at least 1979. All have been critical of many elements of the department’s performance and recommended what must now amount to a thousand changes. Yet the more the department “reforms” itself, the bigger it becomes without becoming obviously more efficient. While there are no precise figures readily available, occasional comments in Budget papers and annual reports indicate that administration is one of the fastest growing elements of the defence budget.

In the most recent review, ordered by the then Defence Minister Brendan Nelson, the review committee, chaired by leading businesswoman Elizabeth Proust and including a former navy chief, Vice-Admiral Chris Ritchie, urged a review of what many see as the crux of the problem, the so-called diarchy which requires that the military Chief of the Defence Force and the public service Secretary share responsibility for the administration of the defence force. Not only does this monster exist at the top, it is also replicated at many levels in the Russell Hill defence headquarters. Public servants claim equivalent ranks to their military counterparts and there are constant struggles for authority, usually resolved by a bargaining process but also in a costly multiplication of senior official positions as the management gurus create more jobs to “fix” what are fundamentally systemic problems.

The various justifications for the “system” include the alleged better education and analytical capability of public servants compared with their military counterparts, but this superiority is asserted rather than demonstrated. Indeed, if it was ever true, it is less so now given the better education and wider experience of middle to senior military officers.

Some six years ago, on behalf of the Australia Defence Association, I recommended to the CDF and the Secretary a proposal that the diarchy be scrapped and that the public service department be left responsible for no more than support of the defence force, which had the prime responsibility for the military defence of the nation. In his response, the then Secretary asserted that the diarchy was necessary because he had responsibility for civil control of the military. This is a monstrous claim by an appointed official which has no basis in law or custom. In fact, the necessary function of civil control of the military in a democracy rests with the defence minister, who is in turn responsible to parliament. Regrettably, ministers have for many years effectively abandoned their responsibility and left the running of defence to the public service, which lacks the skills and training required.

One of the more extreme examples of the way in which the defence bureaucracy serves itself is the revelation in the Sea King inquiry report that the Navy’s Air Group Commander ranks as a one-star commodore. This officer is responsible for a handful of helicopters but ranks higher than the air group commander in an American aircraft carrier battle group. That officer controls a force with, arguably, more combat power than the whole of the RAAF.

Not surprisingly, the response of the defence organisation to Proust’s recommendation for a review of the diarchy was, as on every other occasion, to insist that the system works well and should not be changed. Proust’s other recommendations were accepted only because they represented fiddling at the margins. Disappointingly, the minister who appointed Proust appears to have knuckled under.

Defence should be a major element of national capability. In recent years, it has been given increasing responsibility for overseas combat operations, disaster relief, peacekeeping and nation building, counter-terrorism and border security as well as the core tasks of modernisation and training. Properly, it has been given significantly increased resources for these multifarious purposes, and the troops themselves do an outstanding job. Nevertheless, operational tempos have increased to the point where personnel stability and effectiveness are being hampered. Tragically, the department seems incapable of accepting the need for thorough management reform at the top.

Before the 1973–75 reforms that created the diarchy, the three uniformed Services—Navy, Army and Air Force—were governed by boards that were chaired by the service minister and included the four most senior military officers and the secretary to the service department. In the absence of the minister, the military chief of staff took the chair. The various service departments were support organisations while the Defence Department itself was little more than a co-ordinating body existing to serve the operational capability and performance of the armed forces.

That the services should have been more closely integrated was unarguable. What in fact happened was that the foreign policy establishment moved to take control of national security policy through the scrapping of the service boards, the establishment of the diarchy and generally staffing the public service component with foreign service officers. The Defence Department increasingly became a policy-making department rather than a support organisation.

In retrospect, the end of the Vietnam War created an opportunity for those elements in the Whitlam government and the public service that were more or less indifferent to the American alliance to marginalise the military, who were seen to be too close to the Americans. These developments led, in turn, to the rigidly blinkered strategic outlook set out in the 1986 review of defence policy by Professor Paul Dibb and most commonly referred to as the Defence of Australia (DOA) policy. Our generally ponderous bureaucratic processes ensured that this policy stood rock solid against the tide of international events until it was politely abandoned almost twenty years later. Even so, there remains a tiny group of true believers who continue to peddle that utterly and always unrealistic strategy.

Over the years and in the midst of a seemingly endless series of organisational reviews, the military leaders managed to construct an integrated military command structure that, while still over-bureaucratised and over-staffed, has managed to project a united front to those who used the traditional inter-Service rivalry as a tool of bureaucratic control. Unfortunately, the diarchy’s parallel structure of supervision and control by the public service remains in place, with successive defence ministers either too ignorant or too timid to force reform even when backed by expert advice.

My successor as executive director of the Australia Defence Association has vigorously proposed the appointment of two junior ministers with undivided responsibility for elements of defence management to share the ministerial burden with the defence minister. This proposal would be similar to that applying in the United Kingdom and is designed to reinforce ministerial control of defence. The problem that such an experiment would face here is that the pool of talent in the Australian parliament is much smaller than that in Britain so that the addition of two perhaps incompetent ministers might be unhelpful. Certainly experience over the past two decades with some of the assistant ministers in Defence has been less than encouraging. What is needed in such an arrangement is a high degree of ministerial activity in the statutory bodies such as the Council of Defence, which in fact rarely if ever meets.

There is a range of features of the higher defence organisation which seem to be symptoms of a high degree of malaise in an organisation whose sole responsibility is to provide and deploy combat capable military forces for use as the government of the day determines in the exercise of its constitutional authority, especially under section 51 (vi) of the Constitution. These symptoms include: excessive officer numbers; excessive procurement cost/time over-runs; undisciplined program changes; financial mismanagement and waste; over-processing of information especially in the areas of major decision-making, contract supervision and equipment modification. These symptoms raise a range of problems that need to be solved in the management of the higher defence organisation. Some clearly relate to processes which are clumsy, wasteful or unnecessary, and reform is within the competence of the existing structure. Some, however, appear to be a product of a structure which is itself inappropriate or incapable of being made efficient in its current form.

Too many officers. In 1973 when the Defence reorganisation commenced, the percentage of officers (including officer cadets) in the permanent ADF was 15.6, arguably a high figure compared with some overseas forces. By 1986, this had crept up to 16.7 per cent, somewhat higher than in the UK and USA where, in the latter case, some discussion had suggested that a figure of around 11 per cent was appropriate. However, by 2006 following fifteen years of personnel reductions initiated by the 1991 Force Structure Review, the proportion of officers had grown to 24.6 per cent. Put another way, raw officer numbers grew by 5 per cent between 1973 and 2006 but other-rank numbers declined by 39.7 per cent in a force reduction of 49 per cent.

Over the same period, starred officer numbers remained fairly static (apart from substantial and subsequently reversed growth in the late 1970s and early 1980s) but now stand at 135 compared with 68 in 1964 under the old higher defence organisation. Much the same can be said for the numbers of Senior Executive Service officers in the public service, although their numbers almost trebled between 1964 and 1974.

Of the vast increase in officer numbers, some 90 per cent of those at major/lieutenant-colonel level are employed in staff jobs servicing the higher defence organisation or the multitude of subordinate headquarters. Based as they are on similar structures for much larger defence forces, these are themselves overdue for a fairly ruthless examination and streamlining. The problem is that the number of officers, increased as it has been by extended retiring ages and the need to service a bloated structure, quickly demonstrated a Parkinsonian tendency to generate further work whose necessity is asserted rather than demonstrated.

Waste of money. Obviously, the range of problems set out above results in a waste of money. Waste of public money is no new phenomenon, nor is it limited to Defence. Nor is it likely ever to be avoided, because of the political and administrative rules which apply to the expenditure of public money. On the other hand, it is clearly a task of management to minimise waste, especially when the defence organisation is persistently under-funded.

Waste of people skills. More seriously, the current structure and processes fail to make the best use of the skills of the people who staff it. The staff of the defence organisation are among the best in Australia. However, if the staffs, civilian and military, are unable to make the most effective use of their skills by exercising real responsibility under extensive delegations, their skills are being wasted. In this context, it is worth noting that officers employed in units frequently enjoy and exercise more responsibility at that level compared with their situation when employed in Defence Headquarters or the department.

At the same time, the proliferation of headquarters and staffs which justify the explosion of officer numbers adds to the waste of hard-won and expensively generated skills. A corollary of this is that the adequate training of personnel is significantly diluted because they cannot be given a sufficient breadth of experience in a position before being moved on. Part of the problem is caused by the employment of military personnel, especially officers, on unnecessary tasks or those which do not necessarily require military training or experience. In one case of my knowledge, a middle-ranking officer who had commanded a patrol boat was employed in charge of a mainly civilian welfare group. He noted to me that his job could have been done by a petty officer but a commissioned officer was appointed because of the status of the public servants employed in the group.

Waste of time. That time is money is a truism. But waste of time in developing operational capability is also threatening. The failure to implement the 1994 White Paper commitment to deploying new armed reconnaissance helicopters by 2000—still not deployed in 2007—or to have the LPAs Kanimbla and Manoora operational or HMAS Tobruk refitted in a timely way before the 1999 East Timor deployment represent good examples of the costs involved when the higher defence organisation proves unable to meet its own commitments. As an aside, the proposal to hire the fast catamaran Jervis Bay was opposed by Defence but forced through by the then minister, John Moore. One lesson at least should be that our current strategic environment is so unstable that the normal peacetime management process is no longer adequate if Australia is to maintain even a small, combat-ready force.

Confusion. Frequent changes in organisation, programming or processes that cannot be justified by reference to an overarching strategic policy inevitably cause confusion. When there is also an element of change being driven by the enthusiasm of subordinate staffs without adequate restraint by commanders or senior officers, the confusion is multiplied. Confusion involves serious risks to effective performance. It is bad enough when the confusion is caused by the nation’s enemies but when it is caused by its servants, it is inexcusable.

Demoralisation. All of these elements lead to demoralisation. When, as is likely, demoralisation leads to the departure of personnel for greener pastures, it tends to encourage many of the most able people to leave and it has the further effect of diluting the skills base of both the force and the department. By definition, a management system—both in organisation and process—that is demoralising is a bad one.

There are surely some basic principles that should govern the construction of a higher defence organisation. These include:

Separating military and civilian roles. It should be both possible and desirable that the tasks of the defence organisation be separated into those which are essentially military and those that are departmental or civilian. Inherent in this concept is that responsibility to the minister and government for any given aspect of the work of the organisation be vested in the CDF or the Secretary rather than be shared, as is the case currently. The concept is based on the view that, instead of the higher defence organisation being a single entity, it should in fact be two—a military headquarters responsible for the operational capability and performance of the Australian Defence Force, and a department of state primarily responsible for supporting the Defence Force.

In our increasingly complex world, defence—or national security—policy ought to be developed as a “whole of government” function with a small National Security Council providing co-ordinated advice to the National Security Committee of Cabinet. It does not mean that the staffing of the two organisations be confined to military or civilian personnel. Inherent in this approach is that the so-called diarchy of the CDF and Secretary will be abandoned. It has not worked satisfactorily and, indeed, should be perceived as an obstacle to the efficient management of defence.

Promotions and appointments. Under the current procedures, the promotion of military officers to one-star rank and above is the prerogative of the CDF subject to consultation with the Chief of Service and the Secretary. The involvement of the Secretary—by right as it were—in military promotions is wrong in principle and is simply designed to ensure that, in the words of Yes, Minister, such officers are “safe”. In practice, it generates an attitude in the officer corps that administrative expertise in a narrow bureaucratic sense is to be valued over military competence. For some years, professional journals have been preoccupied with administration and management activities rather than issues of command, operations, strategy and military history.

Furthermore, the practice is at odds with the public service tradition that promotions other than those to the highest levels should be the prerogative of the service so as to protect its independence. Similar principles should apply to the Defence Force even to an extent that limits the role of the minister. Thus promotions to one-star level (brigadier and equivalent) should be made by the Chief of Service, possibly subject to a “no objection” by the CDF. In the interests of professionalism, the minister ought to excuse himself. Promotions to two-star level (major-general equivalent) should be made by the CDF, who at least has the capacity at that level to make an informed choice of potential successors as well as future Chiefs of Service. Again in the interests of professionalism, the minister ought to excuse himself. Promotions to three- and four-star level should continue to be the prerogative of the minister. We would expect that he would be advised by the CDF and that he would consult with the Secretary but would make the choice on his own motion after close personal enquiry.

Responsibility and accountability. The concepts of responsibility and accountability are well-established. The real problem in an organisation like Defence with its typically frequent changes of personnel coupled with long-life projects is to enforce concepts of responsibility and accountability in a meaningful way. Add to that the problems of enforcing standards in the current social climate which encourages resistance through the use of litigious processes, and one might wonder whether the concepts are any longer valuable.

The problem is compounded by the current and long-standing climate of rivalry between elements in the services, in Defence Headquarters and in the department, which tend to encourage a disinclination to discipline personnel whose performance, however inad- equate, may be justified on the ground that the interests of the group were being protected. We note that, in Israel at least, an officer, official or minister whose organisation is found to be at fault is bound to resign his office, even if the individual can claim that a predecessor’s failure led to the fault. In our litigious and rights-bound society, enforcing such a standard may be impossible but, at the operational level in the military, the principle is frequently applied. It should be in the administration as well. At least, it would encourage new appointees to scrutinise their predecessor’s work carefully.

The current management arrangements draw their authority from the provisions of Section 9A (1) of the Defence Act which make the CDF and Secretary jointly responsible for “the administration of the Defence Force”, a remarkably vague provision but one which seems to be constrained by Section 9A (1) (a) but more especially by Section 9 which assigns responsibility for “command” to the various chiefs. In the absence of clear guidance from the parliament, no one can be sure how command and administration can be separated or shared. While Section 8 confers power upon the minister to direct how the various powers should be exercised, the directions that do exist do not seem to resolve the conflict. This creates a degree of uncertainty—which cannot be helpful—and the basis for disputation that will most likely be resolved by informal agreements which, in turn, will depend for their durability upon the personalities of the individuals concerned.

Most of the arrangements under the current structure are designed to integrate the military and public service staffs, especially at the higher levels. There is no evidence of any need for such integration or even any need for the involvement of non-military personnel in matters where military expertise, training and experience are fundamental requirements. As indicated in the then Secretary’s response to the Defence Association’s submission, the true reasons for the integration are a degree of contempt for military expertise and a presumption that the military will act unconstitutionally if not closely supervised by the public service. This attitude is arrogant, contemptuous and not based on evidence.

In essence, the CDF should be the national military commander responsible and accountable to the minister for the combat effectiveness of the ADF, the combat readiness of the ADF, strategic level command and professional defence advice to the minister and cabinet. With no parallel departmental structure to impede progress, the CDF should be able to sharply reduce the size of the military staffs and put the overload of middle-ranking officers to productive work.

For his part, the Secretary as the civilian head of the department would be responsible and accountable to the minister for the efficient management of non-military resources and management policy advice to minister and cabinet. Of course, if this proposal ever saw the light of day, the staff of the department would be sharply reduced and with it the status of the Secretary. This constitutes the biggest obstacle to real reform.

Co-ordination between the ADF Headquarters and the Department would be the responsibility of the minister assisted by such committees as the existing Defence Improvement Committee and the Council for Defence. The minister must take control of the organisation instead of leaving oversight to the department. A key principle is that the CDF and Secretary have separate rather than shared responsibilities to the minister.

As I write, the federal election campaign is in full swing. Notably, the Labor leader, Kevin Rudd, has been justifiably critical of the vast expansion of administrative process at the federal level. On the other hand, he plans to create a significant number of new administrative structures, a plan which seems at odds with his concern for streamlining.

When I was first posted by the Navy to Canberra in 1966, the city’s population stood at around 65,000. Since then, it has grown at least sixfold which, after allowing for the expansion of Commonwealth programs, still seems more than a little excessive. Defence offers a classic example of how management process and its staffing have expanded bureaucracy and costs with no noticeable improvement in performance.