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Budget Estimates 2012-2013

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Budget Estimates 2012-2013 Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q1: Capability Decisions Senator Fawcett asked on Monday, 28 May 2012, Hansard pages 42-43. What mechanisms are in place to advise Government when the time taken to make decisions (in relation to capability) will have an impact on the cost of obtaining the capability? Response: There can be a cost impact in relation to major capital acquisitions if a decision is not made before a certain date. For example, in the case of the Foreign Military Sales (FMS) system, a Government decision may be sought by a particular date in order to benefit from the cost savings involved in joining a larger United States contract that is about to be finalised, or where a production line might be closing. In such cases the Minister is advised in a ministerial submission of any cost implications of missing tender validity or FMS deadlines. The advice to Government also discusses the timelines required for Government decisions and the cost impacts of industry and FMS offers expiring. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q2: USAF Engagement Senator Ludlam asked on Monday, 28 May 2012, Hansard page 48 and 49. (In relation to information regarding enhanced engagement with the US Air Force resulting from the US force posture review) – When are you likely to have something you could present to the parliament or the public? Response: In accordance with the force posture initiatives announced by Prime Minister Gillard and United States (US) President Obama on 16 November 2011, the level of routine US aircraft activity through northern Australia will increase over time, as an extension of our existing cooperation. Specific aircraft types and numbers will be assessed as our planning develops, taking account of the exercising and training needs of both countries. Beyond the joint communiqué released at the time of the November 2011 announcement there is no written agreement underpinning the increased aircraft movements. Any future announcements are subject to future decisions of the Australian and US Governments, and no timeline has been agreed for any further announcements. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q3: Increase in Electricity Costs for Bases Senator Macdonald asked on Monday, 28 May 2012, Hansard page 52. What are the current electricity prices at Lavarack Barracks and what they are anticipated to be post 1 July (in relation to impact of carbon tax)? Response: Lavarack Barracks is covered by an electricity supply contract for large Defence sites in Queensland. The price schedules of the contract (for Peak, Off Peak and Green rates) are Commercial-in-Confidence. However, using the total electricity cost ($3.671 million for the 12 months to 30 April 2012) divided by the total consumption, the ‘effective’ electricity rate at Lavarack Barracks is $0.142 per kilowatt hour. The effective rate includes the regulated fees and environmental charges. From 1 July 2012, the Queensland Government regulator, the Queensland Competition Authority, has approved an increase of 11.3 per cent in network costs to be applied to electricity costs in Queensland. This will increase the ‘effective’ electricity rate to $0.150 per kilowatt hour. Based on internal modelling and feedback from electricity retailers Defence anticipates the impact of the Carbon Price Mechanism at Lavarack Barracks could increase the ‘effective’ electricity rate by $0.030 to $0.180 per kilowatt hour. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q4: Moorebank Relocated Units Senator Johnston asked on Monday, 28 May 2012, Hansard page 53. What are the 13 units and four associated units to be relocated from Moorebank (revised by S. Lewis, list all of the units affected by the move)? What is an associated unit? Response: The 13 Defence units that are required to be relocated from the proposed Moorebank Intermodal Terminal (IMT) site to Holsworthy Barracks are as follows: - The School of Military Engineering (SME) - The Land Warfare Centre (LWC) Regional Education Centre - The Army Logistics Training Centre (ALTC) Detachment - The Army Financial Services Unit (AFSU), which is now part of the Army Compliance and Assurance Agency (ACAA) - The Maintenance Advisory Service (MAS) which is now part of the ACAA - The Headquarters New South Wales Australian Army Cadet Corps (HQ NSW AAC BDE) - The Defence National Storage and Distribution Centre (DNSDC) C Vehicle Maintenance Component - Defence Support - Northern New South Wales (DS-NNSW) and Defence Support - Liverpool Military Area (DS-LMA) Offices - The Signals Delivery System (SDS) Office - The Defence Community Organisation (DCO) Office - The LMA Q Store - The LMA Clothing Store - The Chief Information Officer Group (CIOG) Store. The four associated facilities (incorrectly referred to as ‘associated units’), which provide support to Defence units located in the Liverpool Military Area (LMA), that are also required to relocate from the proposed Moorebank Intermodal Terminal (IMT) site to Holsworthy Barracks, are as follows: - The LMA Library - The Australian Defence Credit Union (ADCU) Branch Office - The DEFCREDIT Branch Office - Government Furnished Facilities for the Defence Comprehensive Maintenance Services (CMS) Contractor - Brookfield Multiplex Services (BMS); and the Defence Garrison Support Services (GSS) Contractor - Sodexho Defence Services (SDSS). In addition to the aforementioned Defence units and associated facilities that are required to relocate from the proposed Moorebank IMT Site to Holsworthy Barracks, the following Defence units, which are currently located within Holsworthy Barracks, are also affected by the relocation given the requirement to demolish their existing facilities under the Moorebank Units Relocation (MUR) project: - The 21st Construction Regiment (21 Const Regt) will be relocated from its current facilities (including temporary staging) into new facilities to be delivered through the MUR project - The following Australian Defence Force (ADF) Cadet Units will be relocated from their current facilities (including temporary staging) into new facilities to be delivered through the MUR project: (a) Training Ship Kanimbla (TS KANIMBLA) (b) The 22th / 29th Australian Army Cadet Unit (22 / 29 AAC) (c) The 23rd Battalion AAC (23 AAC) (d) The AAC Band – NSW. - Elements of the 17th Construction Squadron (17 Const Sqn) will be relocated from its current facilities to temporary facilities to be delivered through the MUR project, prior to a proposed relocation to RAAF Amberley, Queensland, as part of separate Defence infrastructure project which is still to be subject to separate Government and Parliamentary approvals. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q5: Logistics Rationalisation Senator Johnston asked on Monday, 28 May 2012, Hansard page 55. What is the logistics rationalisation amount to be saved? Response: With regard to the specific logistics rationalisation savings attributable to Defence vacating the current leased site at Moorebank, the current lease costs for the Defence National Storage and Distribution Centre (DNSDC) site are $19.508m per annum (plus GST) and are a direct saving when DNSDC relocates to West Wattle Grove (a Defence owned site). Further savings are anticipated following the re-tender of the Defence Integrated Distribution Services contract because of efficiencies through consolidation to fewer warehouses, improved and standardised layouts, and improved processes enabled by improved technology. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q6: Relocation to Moorebank Senator Johnston asked on Monday, 28 May 2012, Hansard page 58. Senator Johnston asked in relation to facilities at Moorebank: (a) what are the current lease fees or annual rent (b) what are the net savings (c) what are the costs to establish West Wattle Grove site? Response: (a) The lease fees for the Defence National Storage and Distribution Centre (DNSDC) Moorebank for financial year 2011-12 are $19.508m (plus GST). (b) The current lease costs for the DNSDC site are $19.508m per annum (plus GST) and are a direct saving when DNSDC relocates to West Wattle Grove (a Defence owned site). Further savings are anticipated following the re-tender of the Defence Integrated Distribution Services contract, because of efficiencies through consolidation to fewer warehouses, improved and standardised layouts, and improved processes enabled by improved technology. (c) Subject to Government approval of the Defence Logistics Transformation Program, the capital cost to establish new facilities for the DNSDC is approximately $220 million. Senate Standing Committee on Foreign Affairs, Defence and Trade QUESTIONS ON NOTICE - COMMITTEES Senate Budget Estimates – 28/29 May 2012 Q7 – Fraud Detection Senator Xenophon asked on Monday, 28 May 2012, Hansard page 59: How much fraud has Defence detected since 2001 Auditor-General’s report? How many qualified investigators have been employed by the military police and other agencies within Defence,
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