Australian defence department aiming to cut waste

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Australian defence minister Joel Fitzgibbon says his department is aiming to save 20 billion Australian dollars over the decade, which includes approximately $5 billion over the forward estimates.
He warns the success of this program “will depend upon fundamental changes to policy, practices and culture across the department.”
Fitzgibbon says his Strategic Reform Programme is a key element of his government’s financial plan to fund the force structure, readiness, sustainment, personnel, infrastructure and other objectives outlined in the 2009 Defence White Paper released earlier this month.  
“The Government’s financial plan for Defence includes the Strategic Reform Programme, other savings initiatives, our existing commitment to grow the Defence Budget by 3% average real growth until 2017-18 followed by 2.2% average real growth to 2029-30, and a new indexation arrangement.



A media statement released by his Canberra office says the “Strategic Reform Program will change the way Defence does business, and will draw on detailed analysis of every aspect of Defence, including strategic planning, managing major cost pressures, capability, logistics and workforce management, amongst other areas.

“Money saved through this programme will be reinvested into priority defence programmes and capability acquisitions.”
Fitzgibbon says the programme “will establish a blueprint for the Australian Defence Force to become the world’s most productive Defence Force.”
Key reforms to defence business practices include:
·         Reforms to the design of the military support backbone, including supply chain and inventory management and military equipment maintenance. These efficiencies will deliver savings of approximately $1.5 billion in saving across the forward estimates and $5.5 billion across the decade.
·         The creation of more efficient enterprise support functions, such as the information and communications technology infrastructure, reducing the use of contractors and providing more centralised support to the ADF. These efficiencies will deliver savings of approximately $0.5 billion across the forward estimates and $3.5 billion across the decade.
·         The Defence workforce will be rebalanced to ensure that we have the people with the right skills in the right jobs. Our highly trained military members will focus their skills where they are most needed and, wherever possible, expensive contractor positions will be converted to Australian Public Service positions. These efficiencies will deliver savings of approximately $0.5 billion across the forward estimates and $2 billion across the decade.
·         Defence will reduce input costs to doing business, including non-equipment procurement. These costs can be reduced through changing Defence’s approach to business. Examples include procuring more competitively priced products and making greater use of Defence’s extensive videoconference network rather than undertaking single-day travel. These efficiencies will deliver savings to Defence of approximately $1 billion over the forward estimates and $4.5 billion over the decade.
·         Defence will make further savings through a range of other initiatives, including more effective major equipment procurement practices through the implementation of the Mortimer Review. These savings will deliver saving to Defence of approximately $1.5 billion over the forward estimates and $5 billion over the decade.
“The range of savings planned … will be drawn from comprehensive efficiencies in administrative, sustainment, workforce, estate, and ICT functions,” the department says.