The House of Representatives Select Committee on Regional Australia Inquiry into Regional Australia Department of Defence Written Submission November 2019 Executive Summary 1. The Australian Government is strengthening Australia’s defence capabilities through the 2016 Defence White Paper and the Defence Integrated Investment Program (IIP) to meet the challenges of the more complex strategic environment Australia is likely to face in the years ahead. 2. The need for Defence to deliver the capability directed by Government and to ensure the safety and security of Defence personnel and the Australian public requires Defence to train in a range of locations. A number of these locations are located in regional Australia and contribute 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. 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 1 August 2019, the total number of Defence personnel in regional Australia was 32,954. The regional workforce equates to 32.4 per cent of the total 101,582 Defence personnel located in Australia. This presence has enabled Defence to develop significant partnerships with local communities, business and government. 4. 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, economic development, environmental protection, waste management and sustainability activities 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. 5. The location of Defence personnel, bases and facilities is driven by strategic priorities underpinned by the 2016 Defence White Paper, the Defence IIP and the 2016-36 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. 6. The disposition of Defence establishments is also guided by the estate design and use principles outlined in the 2016-36 Defence Estate Strategy. This submission illustrates 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. Defence is currently reviewing its force structure and the forward Defence establishment profile with a view to providing an update to government in 2020. 7. 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 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. 8. The 2019 Defence Policy for Industry Participation has been developed to provide greater consistency, unity and opportunity for Australian Industry involvement in Defence procurement. The policy formalises consideration of Australian industry at the national and local level for material and non-materiel procurements. As an example, Defence has implemented Local Industry Capability Plan pilots on six major capability projects with a focus on maximising opportunities for businesses within reasonable geographic proximity to the location of the work. 9. 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. 10. Defence’s regional presence, along with strong industry partnerships, will be instrumental in delivering and supporting future Defence capability. 11. While Defence’s contribution to regional development is driven by capability and strategic requirements, this submission addresses the Defence presence in regional Australia within the context of the Committee’s terms of reference applicable to Defence, specifically: a. Examining the effectiveness of existing regional service delivery and development programs; b. Examining the contribution and role of regional Australia to our national identity, economy and environment; c. Promoting the development of regional centres, towns and districts including promoting master planning of regional communities; e. Examining the key drivers for unlocking decentralisation opportunities for both the private and public sectors; and f. Promoting the competitive advantages of regional locations for businesses. 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: a. Deter, deny and defeat attacks on or threats to Australia and its national interests and northern approaches. b. 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. c. 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. 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. Table 1: Distribution of Defence public servants and ADF members and reservists as at 1 August 2019 Location ADF APS Total % Canberra 9,190 6,708 15,898 15.7% Sydney 15,431 1,468 16,899 16.6% Melbourne 4,482 2,712 7,194 7.1% Brisbane 13,679 700 14,379 14.2% Adelaide 6,011 1,978 7,989 7.9% Perth 5,821 448 6,269 6.2% Regional and Rural1 30,222 2,732 32,954 32.4% TOTAL 84,836 16,746 101,582