LTGEN David Morrison, AO
Speech: Defence Industry Award Dinner Adelaide, 31 May 2012.
I am delighted and honoured to address this prestigious event, which celebrates the contribution of Defence Industry to the security of Australia and its people. In particular, tonight provides an opportunity to pay tribute to excellent performance, across a range of fields of endeavour in Defence Industry. As Chief of Army I am acutely aware of the importance of the relationship between our partners in this sector and the ADF and I welcome an opportunity to celebrate it.
It also gives me the opportunity to acknowledge the support provided to Defence by the Government and people of South Australia. I was lucky enough to be at the opening of Horseshoe Lines, the new home of our 7th Battalion, at the Edinburgh base last year. The very comprehensive way in which South Australia supported and embraced the relocation of over 700 Army personnel and their families to the State set a new and laudable benchmark in the way the ADF has been welcomed into a new location. It augurs well for the future.
The nature of the relationship between Defence and Australian Industry has changed profoundly over the past two decades. Following the exposure of the Australian economy to the full rigour of the global market, with the float of the dollar in 1983, the nature of business in Australia changed.
Nor was the public sector immune to this transformative influence. Governments were under pressure to produce and maintain surplus budgets, to out-source many activities and functions, or to corporatise those that they retained. New concepts such as ‘just- in- time logistics’ entered the lexicon. Areas that had previously been monopolized by Government entities were opened up to the private sector.
Defence often led the way in this trend. As with many reforms, there was some scepticism and resistance at first. However, over time both Defence and the private sector made this relationship work and I believe the benefits have been substantial and mutual. Army simply could not operate either at home or on operations without a vast range of contractor and industry support. Indeed the relationship has become quite symbiotic and intuitive.
As I speak to you tonight there are young Australians in harm’s way around the world who rely on the services and support that our Defence industry partners provide to stay alive and prevail on operations. On their behalf may I say a heart felt ‘thank you.’
The tempo of operations since our deployment to East Timor in 1999 has been unrelenting. There are signs that it is starting to taper off and, as has been the case ever since Federation, the Government is asking hard questions about Defence expenditure. Even the world’s first hyper-power the United States has recognized that there is an inescapable trade off between guns and butter. No one can afford an unlimited supply of both, especially since the chaos on global markets, triggered by the collapse of Lehmann Bothers in 2008.
We have entered a period of fiscal austerity and there is no escaping that reality.
In recent weeks some of the key assumptions that you relied on for your business plans, and upon which the Army had based its development and force structure plans have been significantly revised. I am on the public record as stating that I found some of the decisions that I have had to make as a result of this year’s budget very painful-especially the cancellation of our self-propelled artillery procurement. All of us have had to do more with less in response to fiscal and budgetary pressures. That is the way we have always done things and this time will be no different.
As Chief of Army I need a sense of history to keep things in perspective and I note that throughout our history the size of our Army, and its level of preparedness, have surged and contracted in response to the balance deemed necessary by the Government of the day.
I know that, currently, many of you face a greater challenge than we in the ADF do.
The Government has said that the uniformed ADF should not shrink. That really matters to me. But I know that you all have highly skilled work forces and that you work on tough margins. The strength of the Australian dollar is making the export market tough at the very time that domestic demand is shrinking due to spending restraint.
I sincerely hope that you can preserve the skills and expertise that you have built up over the past decade without significant cuts to your workforces. Like well trained soldiers, I know that you have invested in building the expertise in your businesses.
I say that with particular conviction for those of you with significant exposure to the array of Land projects. While I do not want to mislead you as to the implications of the cuts to the defence budget, or to offer false comfort, I do want to focus on some positive aspects of the situation in which we all find ourselves today.
There has been considerable attention in the media to the percentage of Defence expenditure as a proportion of GDP and some have compared the current portion to that in the period immediately prior to the Second World War. I caution against over-reading the bald conclusions that some commentators have drawn from those raw figures. I can only speak for Army, but I believe we are in vastly better shape than such analysis suggests.
Consider this. Notwithstanding the savings being extracted from the Defence budget we are still in the midst of the most significant re-equipment and modernisation of the Australian Army since the establishment of the Australian Regular Army in 1947. That, I must say, is a result of the realisation, by successive Governments of how much the Army had been allowed to run down during the 80s and 90s. This is a topic I have spoken about publically on several occasions and I will not be doing so here. Nevertheless, that refurbishment is building on very significant improvements to the force implemented since our deployment of INTERFET in 1999. In simple terms we now possess a much stronger base than at any time in my 34 year career.
The Hardened and Networked Army, the Enhanced Land Force and the Adaptive Army Initiatives have all yielded an organisation that is unrecognizable from the force that I joined as a young officer in 1979. Its values, ethos and traditions are constant-but in terms of doctrine, training, equipment and readiness this is the most capable Army the Nation has fielded at any time in my career. We are better protected, more mobile and more lethal than the force that was initially deployed to East Timor in 1999.
And as many of you know from your own efforts, we are better supplied and better able to sustain ourselves than we were then.
When the 3rd Brigade rapidly deployed to Timor Leste in 2006 the contrast with the INTERFET deployment could not have been starker.
Within a few days we were able to lodge a potent, joint force a long way from our Australian bases and sustain it indefinitely. There are only a handful of Armies in the world that could have mounted such an operation, at such short notice, and lodged such a capable force in a foreign country. Of those, only one or two belong to medium powers. That capability is placed in an even starker light when you consider the other operational theatres where Army, and its sister Services, have deployed significant military assets over the last twelve years.
There is another reason why I am not as pessimistic as some media commentators about the impact of savings on our capability. While it is not given the credence I think it deserves, Australia has a Defence Department that is very collegiate and strategic in its focus. As difficult as some of the decisions were about where cuts would be made, the most senior level of Defence did not lose its focus on maintaining an ADF capable of modern, joint operations.
Thus, some of the savings from Army to which I agreed, will be re-directed into the urgent remediation of the RAN.
I have said on numerous occasions that Australia needs its ADF more than it needs its individual Services, and I mean it. In stark terms, when budgets are finite, as they are most certainly now, Army needs its Navy and its Air Force more than it needs self-propelled artillery. I don’t resile from the tough choices I have had to make. That’s what I get paid for. My focus is to ensure that the Nation has as balanced and potent a Defence Force as the elected Government is prepared to fund.
The key requirement for our Army is that it can contribute land forces, at short notice, and up to a Brigade size, and that any deployed force possesses the military capacity to conduct, if required, lethal and protracted operations against a technologically enhanced adversary. It must be able to deploy, and operate on arrival, using a range of RAAF and RAN platforms, if it to perform its vital role in a maritime strategy, which remains the declared policy of this Nation.
Every cent spent on Navy indirectly enhances the fighting power and survivability of the Army. I am guided, with regard to Army’s future by the words of Lord Edward Grey, speaking at the turn of the last century, who said “The Army should be a projectile fired by the Navy.”
Under a maritime strategy, Australia recognises that only potent, agile, joint forces, operating in a whole of government context can secure the archipelagic approaches to our Continent and more broadly secure our interests and sea lanes further afield.
Likewise, our deployable forces must be able to render humanitarian assistance, lend support to reassure friendly regional nations across a spectrum from civil disturbances through to limited wars. In short, the future is likely to look much like the recent past, with the Government of Australia perceiving the necessity of deploying capable joint forces either to regional contingencies from tsunami relief, through to crises like The Solomon Islands and Timor Leste, or contributing to Coalitions led by the United States, or the UN, in support of global order.
One enduring and fundamental reality about Australian grand strategy and statecraft needs to be understood; namely that ever since White Settlement we have sought security through close alignment with the dominant Western maritime power of the day. We have been fortunate that throughout our history this role has only been filled by two powers and we have shared deep bonds of language, culture, democratic institutions and outlook with both of them. I am referring of course to Great Britain and the United States of America.
Such strategic practice has served us well. In a compelling article for the prestigious security think-tank, Stratfor, George Friedman recently praised the effectiveness of Australian Grand Strategy, noting that although we had been committed to numerous wars that had not directly threatened our National survival, we had also enjoyed, as a consequence, protracted periods of peace. For a vast, almost empty continent, isolated from its allies, this is a remarkable achievement. In particular, he refuted some of the wishful thinking of some commentators who suggest that Australia can seek security through some form of armed neutrality.
Certainly we have paid a human price for being an ally of the United States over the past decade, and before that. But we have received incalculable benefits in return.
The Force Posture Review and the 2013 White Paper are being conducted amid a calculated US pivot into the Asia Pacific region. We will be expected to offer more than empty rhetoric in order to make the requisite contribution to our own security.
Accordingly, I have directed that we develop an amphibious battle group based on the 2nd Battalion The Royal Australian Regiment in Townsville. This is an exciting development and one which will provide abundant opportunities for business. Without being presumptuous, I consider the new LHDs very much Army assets. I tell that to Ray Griggs, the Chief of Navy, almost every day. Every one of Army’s major systems must be able to operate from those LHDs in the future.
The level of joint collaboration that the ADF has achieved over the past decade is impressive and the vital platforms and enabling components to deliver joint combat power have not been overly affected by the recent funding decisions. We remain committed to a joint maritime strategy and the indispensable components of that force continue to enjoy pledged Government funding.
Again while much of the focus of media attention has been on delays in certain acquisitions and cuts to the capital expenditure budget we must not lose sight of how substantial the expenditure of the Department, especially DMO, continues to be. The figures speak eloquently for themselves.
The bottom line is that Defence continues to be a very significant portion of Commonwealth outlays. The Defence Budget for 2012-13 is $24.1 billion of which the DMO budget represents $9.1 billion or approximately 38 per cent of total Defence expenditure.
Notwithstanding that this is an era of fiscal restraint, the defence industry sector continues to make a significant contribution to national security and to equipping the Australian Defence Force. We should not lose sight of just how substantial the task of sustainment of our existing organisation and inventory actually is.
For example, the forecast expenditure by DMO on goods and services-remembering that DMO is only a part of Defence- equates to $38 million of taxpayers’ money every working day.
Of course, the flow-on effects of adjustments to reprioritisation of activities will need to be carefully managed and will be the subject of further consultation between Defence and contracted suppliers.
These reforms will be further considered during the development of the 2013 Defence White Paper to ensure that Defence spending, in light of the Force Posture Review, a revised Defence Capability Plan and the savings already identified, is calibrated against an up to date assessment of our circumstances both in the short and longer term.
But again, as I ventured above, I am confident that our enduring strategic practice will be confirmed. We will implement a maritime strategy with the ANZUS Alliance as the cornerstone of our National strategy.
It could be taken as gratuitous for someone from the public sector to say to those in business, “be innovative because in straightened times you must find a way to win in spite of the odds.” It would be gratuitous, except that as Chief of Army that is exactly what faces me. I look forward to working with you, in partnership, to do just that in the Nation’s service.