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AUSTRALIAN STRATEGIC REFORM PROGRAM

06 May 11. Australian Strategic Reform Program. The Minister for Defence Stephen Smith and the Minister for Defence Materiel Jason Clare today announced additional Strategic Reform Program (SRP) initiatives and the first set of further accountability and procurement reforms for Defence. The reforms will enhance Defence management and improve the delivery of billions of dollars of investment in new capabilities being progressively rolled out under the Force 2030 plan as set out in the 2009 Defence White Paper. In line with the Strategic Reform Program, the Minister for Defence announced that additional Defence efficiency measures would be achieved by a reduction in Australian Public Service (APS) civilian staffing growth in Defence, and the savings effected here would contribute to the Government’s return to a Budget surplus and the Government’s broader fiscal strategy.

APS Savings: Civilian Employees

The SRP will deliver over $20bn in savings to reinvest in the delivery of Force 2030. Early progress suggests that more can be done. In addition to the SRP measures already announced, the Government is announcing today a second phase of SRP-related savings to be realised primarily through further improvements to shared services design and implementation. The White Paper and the workforce and shared services stream of the SRP predicted a net increase in the Defence APS workforce of 1,655 from 2010-11 to 2013-14. Reforms to shared services and other efficiency measures means that Defence can reduce this overall forecast APS workforce growth by 1000 over the next three years. This includes the application of the Government’s increased efficiency dividend to Defence. Under this whole of Government measure, the efficiency dividend will rise from 1.25 per cent to 1.5 per cent in 2011-12 and 2012-13, before returning to 1.25 per cent for 2013-14 and 2014-15. Reducing the APS workforce growth will be achieved by natural attrition, not hiring new staff and, if required, some limited voluntary redundancies. Savings from these reductions to forecast APS growth will be returned to the Budget. There will be no reductions to the Australian Defence Force military workforce as a result of these changes. Given priority accorded to maintaining support to operations, improving Navy sustainment and enhancing capability development, the Joint Operations Command (JOC), the Navy and the Capability Development Group (CDG) will be exempt from these additional reductions to their forecast APS workforce.

Further Shared Services Reform

Defence will undertake further externally-led reform and rationalisation of shared services, both within Defence Groups, and across Defence as a whole. The intent is to realise workforce reductions in corporate overhead functions in a way that does not reduce standards of service in support of operations or capability development. This reform will be undertaken as part of the Strategic Reform Program, using its governance and oversight processes, including oversight by the independent Defence Strategic Reform Advisory Board chaired by Mr George Pappas. All Groups in Defence will be subject to this examination, with priority in those areas where the largest gains in effectiveness and efficiency are likely to occur. Planning will be completed by late July, with implementation to commence in August 2011.

Project management accountability reforms

Mr Smith and Mr Clare also released the first set of further accountability and procurement reforms. In February Minister Smith and Minister Clare foreshadowed they would bring forward a number of reforms to improve accountability in Defence and project management. This is the initial step in that process. It is essential that the agreed recommendations of Kinnaird and Mortimer are fully implemented and built upon. In 2003 the Kinnaird Report recommended a number of reforms which led to the two-pass approval system, the creation of the Capability Development Gro

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