The federal government is to consider recommendations for the biggest changes to the top of the Defence Department in 40 years.The biggest one is to kill off the Defence diarchy—the joint rule by the Secretary of Defence and the Chief of the Australian Defence Force.
The revolution in how Defence should think and run is the product of the First Principles Review, conducted by a former Liberal Defence Minister, Robert Hill, a Labor Finance Minister, Lindsay Tanner, a former chief of Army, Peter Leahy, a former Australian head of BAE systems, Jim McDowell, and chaired by David Peever, previously managing director of Rio Tinto.
The Review’s on track to go to the National Security Committee of Cabinet by April. The First Principles players want to get in early to have as much impact as possible on the Defence White Paper landscape.
The smoke signals about the Review from the hills behind Russell are sending messages like (puff) ‘extensive’, (puff) ‘transformative’, (puff) ‘dramatic,’ and (puff, puff, puff) ‘re-shape Defence unlike anything else since Arthur Tange’.
It was Tange in the mid-70s who crunched five departments into one and merged Army, Navy and Air Force into the entity that’s the Australian Defence Force. The First Principles Review aims to reinterpret the Tange Testament.
Given the eternal war between Defence and Finance (much less Labor and Liberal), putting Hill and Tanner to work rates as inspired ‘Team Australia’-thinking. Stir in one of the smartest Army chiefs of recent times. And just to open the door wide, tell ‘em to look at First Principles. That’s close to political carte blanche, whatever the terms of reference.
Certainly, the smoke signals say Hill and Tanner had no doubt about their right to gambol all over the place. The Liberal wet from South Australia and the hard man from the Melbourne Left found much in common as they revisited former battles, fiascos and frustrations inflicted by Defence. Still, the Hill-Tanner bipartisan stamp will be useful if the National Security Committee decides to swing the axe. The reference to the old Liberal usage of wets and dries leads to a weak joke: the diarchy has become the Canberra equivalent of the hoary jest about the weather—everybody grumbles about it but nobody does anything about it.
The list of grumblers is formidable. Not least—in public service heft and Liberal Party grunt—is the judgment of the former head of the Prime Minister’s Department and John Howard warrior, Max Moore-Wilton, who laments that no politician’s been strong enough to attack the two-headed leadership: ‘I’m no fan of the diarchy. It has diffused decision-making to a series of joint-committee type structures. It’s strange for a man who was as strong in personality as Tange to produce a structure like the diarchy.’
The Review riffs loudly on a familiar theme—the problems of accountability and responsibility. Or, more directly, fuzzy accountability and indirect responsibility. The report offers some sharp examples. While not using the language, this is the critique immortalised by Allan Hawke back in 2000, when he decried ‘a culture of learned helplessness among some Defence senior managers—both military and civilian. Their perspective is one of disempowerment.’
The First Principles Review calls in evidence a host of earlier reports on what ails Defence—including Proust (2007), Mortimer (2008), and Black (2011). The Proust management review catches the flavour with its reference to the diarchy as ‘the most unusual part of the Defence model’, with two-headed leadership causing a diffusion of commitment, compliance and consistency in reaching ‘leadership visions and goals throughout the organisation’.
You don’t have to rely on smoke signals to consider what a dramatic remaking of the Tange legacy looks like. The ex-military member of the Review, Peter Leahy, has offered a sharp version of what an axe job looks like. Indeed, the prescription he offered last March as director of Canberra University’s National Security Institute, might be exactly why he was chosen for First Principles duty.
Start with Leahy’s description of the problem of aligning accountability, responsibility and authority:
Defence has become infamous for its bureaucracy, throng of committees and matrix management methods. That results in delayed decisions, a lack of transparency and lines of responsibility and accountability diffused to the point of obscurity…What Defence needs now, more than ever, are realistic and achievable goals and people directly tasked and held accountable for their achievement.
His solution? Kill the diarchy as too complicated and unwieldy and give the top job to the military, in a model akin to the Australian Federal Police’s:
This is warranted, as the core role of the Department of Defence is to deliver the fighting power needed to help protect and shape key national interests and, in extremis, fight and win the nation’s battles.
If axing’s too big a call, reshape the diarchy with a firmer demarcation of responsibilities, along the lines recommended by Proust. And, Leahy argues, give the Minister a stronger instrument to run Defence:
Whatever…model is chosen, it should involve re-establishing a statutory defence board, chaired by the minister to manage and be responsible for our national defence efforts. Governance by a statutory board would empower the government to align strategy, capability and budgeting, and assign and monitor accountability and responsibility. It would put the minister in real charge of his department and give him the means to control it. The board should comprise the minister, junior ministers, CDF as the chief operating officer (with ultimate day-to-day responsibility), secretary, three service chiefs, chief financial officer, head of the DMO and one or two representatives from general Australian industry.
The political storm blowing through Canberra might actually help the argument for a return to first principles. A big policy bang has much to offer a government desperately seeking its mojo and an experienced politician keen to assert himself in his new ministerial job at Defence.