Skip to main content
Back to Insights

The system works, we have just forgotten how to use it

Here's an idea: those working on Russell Hill - Australian Defence Force, Australian Public Service and contractor personnel alike- are not out to waste taxpayer money or time.

Related Topics:
Defence Industry
10 November 2023
Emily Wilson & Ben Hossack
8 minutes

Here's an idea: those working on Russell Hill - Australian Defence Force, Australian Public Service and contractor personnel alike- are not out to waste taxpayer money or time.

They are also acutely conscious that decisions made in support of Defence today will affect future generations, with very real consequences for the individual lives of those operating this equipment, and for our ability to defend Australia.

Now that our strategic warning time has lapsed, government, through the Defence Strategic Review (DSR), has identified six priorities for immediate action. Delivery of Defence capability -- including and beyond those specific objectives listed in the priorities (long-range strike, nuclear-powered submarines and domestic munitions manufacturing) will be key to achieving the requisite deterrence effects and resilience outlined in the review.

Delivering the necessary capability at speed will require courage, a high appetite and astute management of risk, and a level of cooperation and consistency across Defence, whole of government, and Industry that has not been previously apparent. This is a shift in the risk paradigm - from cost and schedule risk to strategic and operational risk.

The delivery of Defence capability has been bedevilled by inconsistent government policies. At the pointy end, where policy translates to capability -this has had real impacts that are now being felt in ADF capability delivery and Industry. Years of vacillation on the Collins Class Submarines replacement and self-propelled artillery are but two examples.

Government prioritisation of Australian Defence Industry interests, often at the cost of capability and budget, has also damaged Australia's capability readiness. This was rightly called out by the DSR and in the Productivity Commission's recent Advancing Prosperity report. Australian Industry has also sometimes been overzealous in the extent of its commitments.

Capability acquisition decisions are sexy and vote-winning. They often present excellent photo opportunities for the relevant Minister and local MP. The hard graft of delivering on these decisions is decidedly less media and vote-friendly: requiring long years of focus, diligence and problem-solving.

Defence must navigate an array of internal and external forces and influences. These include comprehensive planning and scoping; risk management (from beginning to end); integration complexity; good project management; industry capability and capacity; an increasing lack of skilled workforce; complex contracting arrangements; through-life support considerations.

The Defence and whole of government decision-making systems that underpin this work are viewed by many as arcane, slow-moving and regularly failing to deliver. For decades, longitudinal modernisation has been the foundation of Defence's $270 billion Integrated Investment Program.

Previous strategic warning times have afforded the luxury of time to land the perfect set of performance specifications, engage in a prolonged competitive evaluation process, and then move into delivery. This 'slow and steady' focus on delivery is, in part, born of Defence seeking to 'rebuild trust' with government in the aftermath of high-profile schedule delays or very public capability failures.

Therein lies the problem. Defence seeks to build trust with government by giving it certainty. Certainty of cost and certainty of capability, wrapped in an often overly optimistic schedule.

Laser focus on risk reduction and cost quality is not just enforced by Defence's internal structures but also through central agency oversight.

The Department of the Prime Minister and Cabinet and the Department of Finance review and contest Defence capability submissions. The schedule has been secondary to 'certainty', but unsurprisingly when schedule slips and capability is delayed, Defence erodes trust with government. Defence then returns to focus on 'certainty', limiting its ability to respond to and manage risk - perpetuating the cycle.

In its response to the DSR, the government has been unequivocal in its strategic guidance and desire to progress at pace. There will need to be a serious effort made to review the Integrated Investment Program, consider the relative priority of capability projects, and align capability resources and plans with government's updated priorities. 

Achievability and affordability are where the conversation will become deeply interesting. Underpinned by a set of principles, rules, procedures and committees, the 'One Defence Capability System' is designed to ensure thorough consideration of Defence capability.

The DSR has now pointed Defence onto target capabilities requiring delivery urgency to which the One Defence Capability System is unaccustomed. DSR has gone so far as to recommend the development of options "as soon as possible to streamline and accelerate the capability acquisition process".

But the thing is, the mechanisms and support structures to deliver accelerated capability already exist and are not broken. It is the behaviours - across Defence, the wider government and the private sector - that need to change.

There is scope within the government budget rules and Commonwealth Procurement Rules that allows for great agility. Unfortunately, these have been applied as the exception, not the rule.

Why? Because use at the complex or developmental capability end of the spectrum (for instance, Australian shipbuilding) requires a much greater appetite for risk. 

Conversely, at the more straightforward or off-the-shelf end of the spectrum, decisions to acquire platforms rapidly (such as the C17 Globemasters) can involve capability trade-offs or a decision to support overseas manufacturers over the domestic industry. This can be a sensitive matter for governments with voters in marginal seats dependent upon Defence industry for local employment.

Risk aversion is a behaviour we need to set aside. The scale of the challenge demands it.

This is a national conversation with national stakes. It is no longer a conversation, if indeed it ever was, in which the responsibility and accountability for decisions - good, bad, or ugly - resides solely with those on 'Russell Hill'.

The days of patch protection and small-mindedness under the cover of rules and procedures must end. The cost of entry to do this end deliver capability faster is systemic behavioural change at all levels: political, industrial and bureaucratic.

This isn't just a conversation that needs to happen exclusively between the defence minister and their department; but a broader one for all NSIC members and their departments.

It will mean the Department of Finance will need to be more accepting of cost uncertainty and risk. The Department of the Prime Minister and Cabinet will need to lean in to drive its minster's agenda and assist in cutting bureaucratic red tape wherever possible.

It will require that other supporting agencies lean in to assist int he conversation about risk, its mitigation and acceptance. Success requires collaboration and teamwork across government and the private sector to deliver what DSR describes as "National Defence".

Emily Wilson is an executive director at Synergy Group. Her career has spanned over two decades in the Australian Public Service, working in national security, central agency and economic portfolios. Ben Hossack is an executive director in Synergy Group's Defence, Strategy and Industry Practice. He has more than 15 years' experience in capability development in defence, spanning contestability, intelligence capability and investment portfolio management.



Back to Insights
Share Article