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Regional Development and Decentralisation Committee Inquiry

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Regional Development and Decentralisation Committee Inquiry into Regional Development and Decentralisation Department of Defence Written Submission September 2017 Executive Summary 1. Defence has a significant presence in regional Australia and contributes to the socio- economic fabric of these communities. For the purpose of this submission the term ‘regional’ is defined as any area outside of the main metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra. 2. The location of Defence personnel, bases and facilities is driven by strategic priorities underpinned by the 2016 Defence White Paper, the 2016 Defence Integrated Investment Program (IIP) and the Defence Estate Strategy. The IIP was developed through a comprehensive Force Structure Review that assessed Defence’s capability needs and priorities to determine Defence’s future presence, comprising: location, equipment, information and communications technology, infrastructure and workforce requirements. 3. Defence has an integrated workforce, including permanent Australian Defence Force (ADF) members, Reservists, Australian Public Service (APS) employees, contractors and other service providers who work together to deliver Defence capability. The quality of the workforce is the foundation of Defence’s capability, effectiveness and reputation. As at 30 June 2017, the total number of Defence personnel in regional centres across Australia was 33,300, which equates to around 34 per cent of its total workforce of 97,911. This presence has enabled Defence to develop significant partnerships with local communities, business and government. 4. While Defence’s contribution to regional development is driven by capability and strategic requirements, this submission provides examples in rural and regional Australia within the context of the Committee’s terms of reference, specifically: Best practice approaches to regional development; Decentralisation of Commonwealth entities or functions, as a mechanism to increase growth and prosperity in regional areas; and Actions of the Commonwealth that would encourage greater corporate decentralisation and what can be learned from corporate decentralisation approaches. 5. Defence’s contribution to regional economies includes housing, capital works and employment outcomes, and also in more unique circumstances, military exercises in rural and regional Australia. Defence’s contributions to social and economic development are also evidenced in relation to the delivery of military training in regional Australia, including pre-recruitment programs for Indigenous Australians. Community engagement and capacity building also occur in regional locations, through supporting ADF members and families in these areas. 6. As a decentralised organisation with a significant regional footprint, Defence contributes to increased growth and prosperity of communities in a range of ways. This submission provides examples of Defence enabling capabilities and non-policy functions that have been decentralised. 7. The submission draws upon the estate design and use principles outlined in the 2016 Defence Estate Strategy, as an example of a model of decentralisation implemented in Defence. This model outlines the key considerations and characteristics utilised in planning the disposition of the Defence workforce including: capability requirements, site attributes, consolidation of bases, fostering personnel retention, enabling access to industry and maintaining urban and regional disposition. 2 8. Defence facilities in regional areas have positive flow on effects to local economies through increased business to local suppliers and service providers. This submission also demonstrates, through examples, the major levers being used to maximise Australian industry involvement for acquiring and sustaining military capability, the importance of robust partnerships between Defence and industry in balancing skilled workforce requirements and location, utilising local workforces where possible for base services contracts, and the provision of equitable access to government contracts. 9. Local industry will have more opportunities to participate in major Defence infrastructure projects as part of a pilot program announced by the Minister for Defence on 31 August 2017. The Local Industry Capability Plan pilot will ensure that local industry has the best possible opportunity to be involved in the Government’s investment in Defence capability over the next decade, including approximately $7.7 billion to upgrade Defence facilities in the Northern Territory. 10. With the introduction of a Defence Innovation Hub in 2016, work is underway to remove barriers to innovation, including creating new contracting and intellectual property policies that may open up further opportunities for regional and rural participation. Close collaboration between Defence and industry is critical to meet future challenges in delivering the Government’s program of works. 11. Defence’s regional presence, along with strong industry partnerships, will be instrumental in delivering and supporting future Defence capability. 3 Introduction 12. Defence is the largest Commonwealth landholder and one of the largest overall landholders in Australia. With a gross replacement value of approximately $68 billion, the Defence estate consists of around 700 owned and leased properties (at Annex A), which includes bases and training areas. 13. Defence provides economic, social and environmental support to regional communities, including through employment, industry, community involvement, childcare facilities, housing, training activities, cooperation on heritage issues and the economic contribution of Defence members and their families located in those communities. 14. The location of Defence bases and facilities is determined in accordance with Australia’s wider defence strategy as set out in successive Defence White Papers. To ensure Defence has the necessary force structure and force posture to defend and advance Australian strategic defence interests, the 2016 White Paper outlines three strategic objectives to guide the development of the future force. The strategic defence objectives are to: Deter, deny and defeat attacks on or threats to Australia and its national interests and northern approaches. Make effective military contributions to support the security of maritime South East Asia and support the governments of Papua New Guinea, Timor-Leste and of Pacific Island Countries to build and strengthen their security. Contribute military capabilities to coalition operations that support Australia’s interests in a rules-based global order. 15. The means by which Australia’s strategic defence objectives are achieved vary according to the circumstances of each situation, but encompass reliable access to essential military bases, wharves, ports, airbases, training ranges and fuel and explosive ordnance infrastructure. 16. In determining the location of bases and facilities, Defence must take into account a range of factors, including geostrategic considerations, capability, mobilisation, logistics and maintenance requirements, the need to access an appropriately skilled workforce, support to families such as schools, suitable housing and spouse employment opportunities, and the need to enable access to industry. The location of bases and facilities contributes to shaping how successful Defence is in fulfilling these requirements and, in turn, contributes towards the achievement of the strategic defence objectives. 17. Defence has an integrated workforce, whereby decisions relating to ADF members and APS employees and its external support workforce are interlinked with capability requirements. The Defence workforce is currently located in metropolitan, and rural and regional areas of Australia, as evidenced in Table 1. 4 Table 1: Distribution of Defence public servants and ADF members and reservists Location ADF APS Total % Canberra 8,475 7,780 16,255 16.6% Sydney 14,019 1,617 15,636 16.0% Melbourne 3,787 2,858 6,645 6.8% Brisbane 12,172 735 12,907 13.2% Adelaide 5,477 1,997 7,474 7.6% Perth 5,234 460 5,694 5.8% Regional and 30,393 2,907 33,300 34.0% Rural1 TOTAL 79,557 18,354 97,911 100% 18. Defence’s presence in metropolitan areas assists with recruitment and retention and provides greater access to a skilled workforce, including a range of specialist skills and contractors that can be difficult to find in sufficient numbers in regional areas. 19. The Defence functions that are located in Canberra enable effective and efficient support to government business and military operations. Defence works closely with a number of Canberra- based government agencies, including on intelligence analysis and sharing, border protection and Defence international engagement. In policy terms, Defence also benefits from co-location with key government agencies on a wide range of issues. 20. Defence also recognises the strategic importance of having a presence within rural and regional communities. Defence’s presence in regional areas has facilitated partnerships with local communities, business and state, territory and local governments that are integral to supporting Defence capability. 21. The Defence Industry Policy Statement (2016) recognises the vital contribution to Defence capability provided by Australian defence industry and science and technology research organisations. Australian defence industry provides a range of critical direct and support services and has been recognised as a fundamental
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