Do we already need the next Defence review?

Behind the recent spat between Defence Minister Richard Marles and his senior Defence advisors lies a hidden issue: are the governance arrangements for Defence’s high-level decision-making fit for purpose or do they need to be reviewed and brought up to date?

There have been many Defence ‘reviews’ over the past five decades, some more consequential than others. The Tange reforms of the early 1970s changed governance arrangements both to integrate the previously separate service and Defence departments and to ensure the implementation of the government’s new defence of Australia policies. These changes had lasting benefits.

Many of the subsequent reviews concentrated on reducing costs and increasing Defence’s reliance on industry, as well as pursuing the elusive goal of fewer errors in defence procurement.

There have been two major external reviews of the development and interpretation of policy: the 1986 review of defence capabilities, and the 2023 defence strategic review (DSR). In both cases, inadequacies of governance contributed to the need for this outsourcing.

Several post-Tange reviews have also changed governance arrangements, the most recent being the 2015 first principles review. But this work was undertaken years before there was any serious response to Australia’s deteriorating strategic circumstances, as eventually set out in the 2020 defence strategic update (DSU)  and as amplified in the 2023 DSR. This gap alone would be sufficient reason to suggest that Defence’s governance arrangements should now be re-examined.

In addition, however, there had been concerns that Defence had not been sufficiently responsive to earlier stages of the worsening of Australia’s strategic outlook—ASPI Insight paper 123 of November 2017 and Strategic and Defence Studies Centre paper of October 2018. And while the 2020 DSU showed a welcome recognition of the new strategic challenges and included important new initiatives such as long-range precision-strike missiles and remotely-operated combat platforms, subsequent implementation of the new policies has been slow, as set out in some detail in the 2023 DSR.

In brief, there are good reasons to believe that today’s Defence governance arrangements need to be improved. Let’s look more closely at some of the evidence.

The decision to drop the SSK program and to go instead for SSNs represented a major change of course. Why was the original decision so wrong as to need such disruption to a vital and costly capability?

The new plans for the Navy’s surface combatant fleet also represent a major change of direction. Again, why were the earlier decisions on this matter so evidently off the mark?

Why did the DSR conclude that it is necessary to transform the Army (para 8.28), and to reduce the number of infantry fighting vehicles from 450 to 129 (para 8.35)? Is there a structural problem with how Defence considers land-force development? If so, the problem goes back a long way, to the Tange reforms, as it was the inadequacy of Defence’s processes for reviewing the Army that contributed to the need for the 1986 defence capability review.

Why is it that the ADF as currently constituted and equipped is not fully fit for purpose (DSR page7)? Why don’t we already have the ‘sense of urgency’ that the DSR advocates (para 1.9)? Why is there this ‘surprising lack of top-down direction’ for projects entering the Integrated Investment Program (DSR para 12.2)? Why has there been ‘little material gain’ in the guided weapons program over the past two years (DSR para 8.73)?

The DSR’s terms of reference required it to outline the needs for mobilisation, yet it makes only passing reference to this in its public report. Why is this? Is it too embarrassing to be discussed in the open?

Why did the DSR need to emphasise the need for genuine whole-of-government coordination of Defence policy (page 8)? Surely this is a blinding statement of the obvious.

Each of these cases in isolation could be shrugged off, and it’s important to recognise that to seek perfection would be a fool’s errand. But taken together they show that the governance problems are serious.

So much for the symptoms. From the outside we can only speculate as to what has led to this. Are the catalysts for change too inhibited or inconsequential? Is there too much emphasis on consensus? Is robust argument actively discouraged? Is the strategic policy area just too small for the workload, or too easily ignored, especially in the vital task of providing top-down guidance for capability development? Are the military staff also overwhelmed by the workload? Is there a fear that if you rock the boat you will stunt your prospects for promotion?

It’s all too easy to criticise from the sidelines. And in any case, it’s important to acknowledge that much of what Defence does is excellent and that the 2020 DSU swept away the complacency of earlier years. Further, it’s not clear how many of the problems lie with Defence rather than with the machinery of government more generally or with ministers themselves.

Overall, however, it’s clear that governance needs to be brought up to date. As things stand, neither the ADF nor the governance arrangements that guide and support it are capable of much more than peacetime operations. Whether the needed improvements would best come through internal or external review is open for debate. At the very least, in our new strategic circumstances, any proposals for change should keep in mind the first Recommendation of the 1997 defence efficiency review: The Defence Organisation should be organised for war and adapted for peace.