Direction And Balance In Defence Chris Evans - Shadow Minister for Defence

Speech

Transcript - Royal United Services Institute of Australia - 23 June 2004

Thank you very much for the invitation to speak this evening. And thank you - Admiral Campbell - for your kind words of introduction. This is my first opportunity to address a RUSI gathering; and if blessed with good fortune, it may not be my last, as Labor's defence spokesperson.

I understand that Mr William Robertson, one of four veterans of D-Day who attended the 60th anniversary celebrations in Normandy, is here in the audience tonight. This is indeed an august gathering of interested persons in defence matters, and I welcome the opportunity this evening to talk about some Defence issues, including some reflections on contemporary issues that have emerged in the political debate in recent times.

I am mindful that a nation's defence policy is nurtured in the first instance by the complex partnership between our community, the government of the day, the Department of Defence and the Australian Defence Force. Without strong ongoing community support for the defence effort, a government will always struggle to justify its defence perspectives, sustain high levels of defence expenditure, or commit forces overseas. Without strong community support, the ADF would find difficulty in meeting its given tasks - to raise, train and sustain its organisation.

The lack of bipartisanship also adds to the government's difficulties. When the government and the opposition agree on an acceptable basis for a defence policy, advantages accrue to all. Without violent swings in policy, military strategies can be honed, force structures developed, new technologies more efficiently employed, and the education and training of our ADF more usefully accomplished.

With an annual budget of over $A15 billion a year, defence remains one of the most expensive of our national undertakings with its financial and human cost shared by all Australians. Although a national government carries the political responsibility for the security of the nation, it relies on others to influence outcomes. The government's role is to shape the political environment in which policy is developed. It should not develop tactics or the relevant doctrine, nor should it become intimately involved in the training of ADF personnel or in identifying new operational requirements and equipment solutions. In matters of equipment procurement, the government should make decisions, based on the expert advice it receives, which then become the foundation for budget allocations.

Given the available time, I want to focus on three key issues:

• Ministerial Responsibility;
• Terrorism; and
• A Balanced Force Structure.

Ministerial Responsibility

Firstly, Ministerial Responsibility.

Governance is about getting people to work together across a spectrum of activities to achieve national objectives.

It is about managing the incredible amount of information that is now being generated, which, in unforeseen ways can feed back on itself, change planning horizons, create problems of chaos and strain, and lead to the overloading, if not a distortion, of an organisation's decision-making processes.

The fundamental integrity of any system, or business for that matter, relies on the basic values and purpose of the organisation to deal with the flow of information so that timely and worthwhile decisions are made. It is a truism that an organisation survives by maintaining its relevance through successfully managing change. Organisations which persist with decision- making processes that cannot respond to new variables through feedback or adjustment will not prosper. They will simply fade away.

In the case of Defence, relevance is sustained primarily through the Minister, on behalf of the government of the day and the community, who sets the tone for Defence by cultivating the organisation's core values and purpose.

For some, the phrase - setting the tone - may appear unusual. In general terms, tone evokes elements of character, integrity, attitude and quality. It also implies a higher meaning, that people at all levels are able to capture opportunities and be rewarded for doing so. It also embraces the notion of trust - both upwards, sideways, downwards, public and private.

These attributes of character, integrity, attitude, quality and trust are constantly under threat in the modern world of business behaviour.

The simple act of pretending that something is other than what it is, the heightened level of cynicism that occurs through misrepresentation or misunderstood policies, the observed political flights to safety, the contradictions that emanate when the vision is denied, the slowness in obtaining decisions, or the devaluing of a person's commitment which routinely surfaces when restructuring or rationalisation is carried out in the name of organisational efficiency; all of these in their particular fashion challenge the health and tone of the organisations that we serve.

When I say it is the primary responsibility of the Minister to set the tone for the organisation, I mean it. That is what ministerial responsibility is all about. It is not about stifling public debate of defence matters by 'hiding behind false charges of smearing the troops', as Matt Price wrote of the Howard government's attempts to choke debate on Iraqi prisoner abuse.

We have reached a critical period in the health of defence policy-making in Australia. The Australian community staunchly and faithfully respects its Defence Force. The outstanding performances of the ADF in East Timor, Afghanistan, Iraq and the Solomon Islands attest to the professionalism, discipline and dedication of Australian troops in action. It also signals the success of Australian tactics, doctrine and training.

In contrast, the Australian community and the Parliament are now more openly and bluntly questioning the efficiency and core values of the Defence bureaucracy. Regretfully, there have been too many blunders, too many humiliations, and gross mismanagement during the past eight years:

• Eight years of the Howard Government have seen four Departmental Secretaries, three CDFs and four Ministers for Defence;
• The eight years have seen four Ministers Assisting, and three Parliamentary Secretaries;
• The Department has suffered the public embarrassment of court action over the removal of one departmental secretary by the Prime Minister and the Minister for Defence;
• Under the Howard Government, only 1 of the top 15 people in Defence is in the same job held in September 2001.
• The debilitating effects on organisational trust from the 'Children Overboard' affair, or 'Certain Maritime Incident' as it was officially titled;
• The extensive leaking of classified material from DIO;
• The 'Legacy Projects' fiasco - projects that were conveniently abrogated because they were in train before the current Minister's time;
• The demise of the logic and continuity in the Defence Capability Plan (DCP) through disagreements between Cabinet and the Minister for Defence over the extent of global reach for the ADF;
• The latest DCP, about which the government-funded Australian Strategic Policy Institute concluded that, and I quote, 'far greater scrutiny, transparency and strategic direction is required before taxpayers can be confident that Defence is capable of delivering major Defence equipment on time and on budget.'
• The 2004 budget papers revealed $2.2 billion worth of projects promised in the 2002 White Paper have now been delayed.
• Of the top 20 major acquisition projects that were under planning at the time the Howard Government came to office, four have been cancelled and the majority are now eight to ten years behind schedule and hundreds of millions of dollars over budget; and
• Sadly, the recent Senate Estimates hearings, which exposed structural problems, inadequate management of information in the upper echelons of the Defence's bureaucracy, the want of trust and integrity, and the poor relationship between the Minister and his Department.

I could go on.

Under a Labor Government, changes will be made. In the first instance, I intend to work hard at repairing the damage to core values and purpose. Character, integrity, attitude, quality and trust - setting the tone - are so very important in nurturing relationships. This is what ministerial responsibility is all about.

While I will retain full ministerial portfolio responsibility, ministerial responsibilities will be restored to go beyond the current allocation of responsibilities in name only which occurs under Senator Hill.

Labor favours the British model where a separate minister is responsible for defence procurement, drives the procurement organisation, and oversees all of its activities. You may recall that it was Labor that exposed the extent of problems in 2002 that finally caused the Prime Minister to initiate a wide- ranging review of defence procurement - the Kinnaird Review - which recommended major structural changes to the Defence Material Organisation (DMO).

The Kinnaird Review was an important first step in developing more stringent accountability mechanisms. DMO accountability should be all about delivering projects on time, on budget and at agreed levels of capability. To measure the effectiveness of the new arrangements, the Productivity Commission will be tasked in the first year of a Labor government to conduct a full evaluation of the implementation of the Kinnaird reforms and identify whether there is a need for further changes to improve major project management.

Given the sheer magnitude of the 10-year, $A50 billion defence acquisition plan, Labor believes that taxpayers are entitled to demand that this money is being spent wisely. Labor is committed to introduce more overt accountability to Defence's management of major projects. A Labor government will strengthen public scrutiny of the program through regular publicly-released progress reports on major projects, and the use of annual evaluations of major projects by the Australian National Audit Office as required.

It is also important to have in place robust and flexible management systems that support competent decision-making. We cannot afford to suffer more debacles such as the break-down in communications within the Defence bureaucracy over Iraqi prisoner abuse.

This should not have happened. But no-one has taken responsibility, and to my knowledge no-one has even been chastised outside the public embarrassment of Secretary Smith and CDF Cosgrove on 1st June and the humiliation of the Prime Minister, who admitted that he had been misled.

And I would be disappointed if media reports are correct when they describe departmental remedial actions that only include the monitoring and quality of sitreps from embedded officers. This is clearly unsatisfactory because the Defence bureaucracy held large quantities of information on prisoner abuse, and no-one was astute enough to identify the importance of the reports and inform the next level of command or control.

The present systems at Russell need more than mending. The Howard Government reforms of 1997 and onwards have plainly failed, and change is essential. As I said earlier, organisations which persist with decision-making processes that cannot respond to new variables through feedback or adjustment will fail.

Through change, the Australian community should be able to renew its confidence in the Department. This may take some time. But it is a courageous government that ignores community concerns and places itself too far at variance with what the electorate considers indispensable for the nation's security.

Management issues for the next minister are more than challenges, they are central to the defence task.

Let me now turn to Terrorism.

Terrorism

Terrorism is now the major security issue facing Australia and our neighbourhood.

With hindsight, we can chart the emergence of modern terrorism from the religious extremism of Wahhabism, which had its origins some 200 years ago in the geographical general area now known as Saudi Arabia. Wahhabism developed into a 'combat theology' that fused politics, religion and historical grievances in the pursuit of its cause. It was a minority cause, swamped in the tide of history until bin Laden - and martyrdom was its weapon.

Al-Qa'ida's adaptation of Wahhabism embodies the modern catalyst of worldly grievances in its pursuit of the United States and the overthrow of the Saud family. And recent bombings in Riyadh acutely remind us of bin Laden's publicly-stated objectives and the original objectives of Wahhabism. Seeds of Waddhabism exist in Jeemah Islamiyah (JI), whose declared objective is to establish a pan-Islamic entity, which would encompass Indonesia, Malaysia, Singapore, southern Philippines, Brunei and southern Thailand.

Bin Laden's significance materialized from the training camps that were functioning in Afghanistan by 1994. For the next four years, some 20 000 recruits received general training at the camps. Most fought with the Taliban or in Chechnya, and nearly 4000 reputedly received more specialised training to coordinate and conduct terrorist activities elsewhere. Some of these were JI operatives who returned to Malaysia and Singapore. After 9/11 Western intelligence services refocused on tracking these newly-trained specialists.

What has now become significant is the scale and strategic reach of terrorist organisations. When Singaporean security forces uncovered plans to attack targets, including the Australian High Commission, with truck bombs, they discovered more than local operational actions. Local JI members were used to conduct the reconnaissance of the targets, a regional explosive expert was tasked to manufacture the bombs, and foreign volunteers from the Middle East were to be flown into Singapore to undertake the attacks.

9/11 had similar command and control arrangements, and the Madrid bombing also had global reporting connections. When cornered, one of the Moroccans, involved in the Madrid bombing, telephoned a known Al-Qa'ida member in the United Kingdom as well as a known JI member in Indonesia before committing suicide.

The regional situation is grim. While over 200 JI members have so far been captured in South East Asia, JI has still been able to stage a series of bloody bombings. Two weeks ago the Howard Government confirmed US media reports that a JI assassination squad had entered Indonesia to target amongst others, Australian diplomats and business people. In the Philippines, the Abu Sayyaf Group (ASG) and the Moro Islamic Liberation Front (MILF) are active, and have established new training camps. Other groups are functioning in southern Thailand, and we are now aware of the secret caucus, the Rabitatul Mujahidin, which brought together some seven local militant groups for meetings in Kuala Lumpur and which is now connected, through JI, with al- Qa'ida.

Terrorist targets are more various and not always connected to killing. The planned blowing-up of the water pipeline between Malaysia and Singapore introduced a new dimension to target selection. Now maritime-related terrorism in the target-rich Indonesian archipelago is more prominent in security planning. Over a quarter of the world's trade and half of the world's oil is carried through the Malacca and Singapore Straits - that is some 50 000 ships annually. What high-value economic targets they offer in confined waters!

The signs are already evident. The suicide attack on USS Cole, the successful attack on the French-registered oil tanker, Limburg, which disgorged 90 000 barrels of oil near Yemen, and in 2003 Singaporean officials discovered preliminary plans for JI suicide attacks on US naval vessels port- visiting Singapore. Of equal significance, US-sourced evidence surfaced that al-Qa'ida was buying ships as early as 1994. These may have been purchased to move personnel and resources from continent to continent. But it doesn't take much imagination to recognise the advantages of using containers to position weapons of mass destruction or covertly place personnel and equipment in some of the most vulnerable of city targets. Remember that containers account for almost 90 per cent of transported general cargo.

Maritime-related terrorism is about inflicting as much damage as possible, while calling attention to the cause. And Australia's immediate neighbourhood offers lucrative maritime opportunities for the terrorist. The disruption of sea- borne commerce would seriously affect the world economy, our economy and the economies of out trading partners in North Asia, and generate incalculable strategic repercussions. As a compatriot recently declared, Australia lives on the outskirts of a field of jihad, with an archipelago that includes the largest Islamic nation, in a world alive with Islamic politics. We cannot turn our back on our neighbourhood.

As a vivid reminder of the impact of terrorism on the region, one does not have to go further than the Australian government's current travel warnings to countries in the archipelago. Our security is inextricably linked to the security and stability of our neighbourhood, just as the success of terrorism is linked to the drift to state failure. The threat of terrorism highlights the need to address existing social and economic problems in the region, which unfortunately boost the proliferation of sub-state and anti-state violence. The challenge is for all governments to tackle violent political expression and extremism as well as local conditions that give rise to religious fanaticism.

That is why Labor has as one of its three foreign policy pillars - comprehensive engagement with Asia. It is not isolationist to signal to the world that Australia's principal concerns are in Asia; and it is not, as John

Howard has alleged, an exclusively regionalist or insular view for Labor to declare its intentions to promote as actively as possible the security and stability of where we live. This is realist politics; it is practical politics; and it reflects Australia's risk profile. Australia's interests are more concentrated, our responsibilities more exacting, and our capacities to influence those interests are better placed where we live. By doing so, in large part, Australia can meet its alliance obligations with the United States by making sure that we have the capacity and the capabilities to operate independently in our neighbourhood.

And in contrast to recent politically-motivated government attacks, Labor takes its responsibilities with the United States very seriously. Our alliance with the United States is one of the three pillars of Labor's foreign policy. Many advantages accrue to the ADF through its close association with the might of the United States military. Access to new equipment, exchange postings, individual training opportunities, participation in high intensity military exercises - these are all excellent experiences and entry points to nurture and sustain the close defence relationship, which, I should add, has matured beyond the dreams of those in Labor who first moved to formalise our friendship.

There have been disagreements. Pine Gap springs to mind, and the public controversy centred on Labor's request for joint command and control at the facilities, which was successfully negotiated with the United States. What happened over Pine Gap is a good example of what distinguishes Labor from the Coalition. Labor is both nationalistic and pro-alliance. Labor will stand up for Australia's interests in the first instance and work constructively within the alliance.

Labor governments have always taken their international responsibilities seriously, and the next Labor government will continue that tradition. It is in Australia's national interest to do so. Australia will always have important global security interests, linked in many ways with our economic well-being, with the desire for strong and stable trading relationships, and with our responsibilities to promote diplomatically the stability of the international order.

It is generally accepted that the potential for direct conflict is much less as the Cold War fades, and new mechanisms are embraced. But the threat from weapons of mass destruction remains, tensions remain in North Asia, and the presence of an engaged United States can only facilitate stability in the Asia Pacific region. Perhaps the present circumstances are the best we could imagine in which the US and China can deepen their engagement.

Labor never supported participation in the war in Iraq. So it should not have surprised the pundits when Mark Latham announced Labor's policy of withdrawal by the end of the year. It is a withdrawal based on the successful transfer of sovereignty on 30th June and Labor winning government. But it is not a total disengagement. Australia does have an ongoing moral obligation to assist the Iraqi people with economic reconstruction and humanitarian assistance. But our military priorities are in our region in the war on terrorism and to meet our obligations to our neighbours just as we have done in East Timor, Papua New Guinea and the Solomon Islands.

The war in Afghanistan was different. It was the first phase in the war on terrorism, and Labor supported Australian participation. Labor supported the Government's decision to invoke the ANZUS treaty for the first time on the basis of the 9/11 attacks. International cooperation emerged through the activities of the Security Council, forces were deployed, perhaps half of the old al-Qa'ida leadership killed or captured, and al-Qa'ida's principal training base destroyed. No longer could terrorists freely train in Afghanistan and be dispatched to our neighbourhood. Not surprisingly, new training camps surfaced in southern Philippines and Indonesia. Terrorism did not fade away.

For the foreseeable future, the war on terrorism will determine our national approach. We should be harnessing all of our national capacities and energy to defeat the terrorist networks that have emerged. To do otherwise is to deny the legitimacy of the national government's primary responsibility - to protect Australia, its people and its territories. And as a small to medium-sized power in the region, it is in Australia's interests to engage with our traditional allies and neighbours in this war.

This will not be easy. Already there are signs that neighbouring countries are ambivalent in their individual approaches to terrorism. In Indonesia, for example, JI has not been legally banned in spite of its listing by the United Nations as a terrorist organisation. Malaysia recently signalled its opposition to United States' involvement in maritime security operations in the Malacca Straits, and at a special meeting of ASEAN two weeks ago, member nations failed to agree on a definition of terrorism. These are all indicators of internal divisions over third country contributions. Most ASEAN members argue that the ongoing insurgencies and terrorist incidents can be confronted with domestic rather than by US-led military operations. 'Good regard' for the United States of domestic Indonesia was recently polled by Pew Research to be at an all time low of 15 per cent. Given the tide of regional political opinion, seeking closer military cooperation with the United States is seen as unhelpful in preventing local recruitment to radical Islamic groups.

Australia is in a unique position to use extant bilateral arrangements and forums, like FPDA and the ASEAN Regional Forum, to promote and encourage regional responses. In a related fashion, Australia should also re- invigorate our defence relationship with New Zealand, not only to harmonise responses in the South Pacific, but also to improve the complementarity of our defence forces. This is long overdue.

The ADF can make a strong contribution in counter-terrorism operations where the more sophisticated the threat, the more likely that ADF capabilities will be used. The list is extensive: surveillance, Special Forces, intelligence gathering, physical security, strike, shipping protection, boarding and search capability at sea. What is selected will of course depend on the threat, the location of the threat, the willingness of our neighbours to allow intervention, and the capacity of the ADF to respond in a timely fashion.

A Balanced Force Structure

Finally, a Balanced Force Structure.

Bipartisan agreement did emerge over the fundamentals of the Government's White Paper, Defence 2000: Our Future Defence Force. Labor continues to support the White Paper's priority tasks for the ADF:

• to 'defend Australia without having to rely on the combat forces of other countries';
• to 'control the air and sea approaches to our continent';
• to contribute to the security and stability of our immediate neighbourhood;
• to contribute to coalitions of forces in our wider national interests 'beyond our immediate neighbourhood'; and lastly
• to undertake 'occasional tasks in support of peacetime national tasks'. The tasks signal the common sense of a maritime strategy for Australia, the importance of self reliance, the objective of a secure and stable neighbourhood, and a commitment to international operations led by the United Nations and Australia's key allies in the pursuit of broader national strategic objectives. Without reservation, Labor champions all five ADF tasks in the pursuit of our national interests.

Contrary to the utterances of the Howard Government, Labor has a proud history of participation in coalition operations beyond the region. In recent times, Labor governments have approved ADF deployments to Cambodia, Rwanda, Somalia and in the first Gulf war. And Labor supported our participation in Afghanistan. Labor does not support defence isolationism, or pacifism, or limitations of where or when the ADF will be deployed. As I have repeated stated, Labor strongly endorses the five ADF tasks in the 2000 White Paper.

If there are differences in our approach in developing capabilities in the force structure, they relate to the balance between what is needed in each Service to satisfy the first three tasks - that is, self-reliant defence of Australia, to control the air and sea approaches to our continent, and contribute to the security and stability of our immediate neighbourhood.

A balanced force structure permits independent joint operations within our air and sea approaches. It assumes that superior capabilities, or superior strategic weight, can be deployed to satisfy the operational mission whether the mission is army, navy or air force-oriented. Labor is committed to an enhanced capacity for independent military operations in its neighbourhood, with strong air and naval capabilities able to dominate the maritime approaches and to move the Army, which will be structured to deploy more quickly with the firepower to carry out its allotted tasks. In the business of war, there is no prize for second place.

Balance also refers to the ADF's capacity to sustain itself on and after operations. The recent history of ADF operations is sprinkled with resupply troubles, insufficient specialists for rotation, and equipment maintenance problems. Because of the high tempo from multiple deployments, exacerbated by the expensive use of unsuitable platforms for Australian border protection in Operation Relex, naval refit and maintenance programs have also been severely delayed. The ADF is short of specialist engineer plant operators, supply officers, air traffic controllers, naval electronic technicians, and seaman officers to name but a few. And there could be more serious shortages of which I am unaware.

We also have an imbalance in the current Defence Capability Plan 2004-2014, which does not reflect the intent of the White Paper and the 2003 Defence Update. Let me cite some examples.

The early retirement of the F-111s, coupled with the strong possibility of delay in the arrival of the new Joint Strike Fighter, is likely to produce a critical air combat capability gap. Contingency options are now in development, but that is all they are - contingency options.

Any gap in air combat capability destroys the nation's strategy for self-reliant defence. The success of a maritime strategy, and the ability to control the air and sea approaches, hinges on having superior aircraft in the inventory and no gap. Indeed, without superior combat aircraft, Australia's contributions to future coalition forces and to the war on terrorism, severely limits a Government's options. The Minister for Defence, and the Howard Government, should not have allowed this to happen. That it has happened shows how unfocussed and careless the Government has become on our defence needs for this region.

The proposed land-based air defence system for Army is no longer in the 2004-2014 Defence Capability Plan. This project was in the previous DCP but, for reasons that escape me, it has now been dropped. The removal of the land-based system is now inconsistent with the Government's stated objective - to provide better force protection. The result? Another gap, this time in air defence capabilities for the land-deployed force at a time when the Government is pretending we can afford a continental missile defence system. I could go on.

A Labor government will have to revisit the DCP because, as ASPI and others have noted, the new DCP does nothing to fix the problems that caused the original Plan to be described as 'undeliverable, unaffordable and uncertain'. It lacks the discipline to satisfy Australia's maritime strategy, the agreed five ADF tasks, and the requirement for self-reliant operations in our immediate neighbourhood.

Conclusion

I would like to leave you tonight with four, clear messages from Labor:

• The Defence bureaucracy's processes and practices require urgent review;
• The war on terrorism in our immediate neighbourhood is the key strategic challenge for Australia;
• Labor's objective is to develop a balanced force structure that can generate superior strategic weight in carrying out the five key ADF tasks; and
• The Defence Capability Plan will be reviewed in government to restore balance in accordance with the 2000 White Paper.

Thank you for your interest.