SENATE

COMMONWEALTH OF AUSTRALIA 

Proof Committee Hansard 

SENATE 

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION 

COMMITTEE 

Estimates 

(Public) 

WEDNESDAY, 1 MARCH 2017 

CANBERRA 

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It is made available under the condition that it is recognised as such. 

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[PROOF COPY]

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SENATE 

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE 

Wednesday, 1 March 2017 

Members in attendance: Senators Abetz, Back, Kim Carr, Farrell, Fawcett, Gallacher, Hinch, Kakoschke- 

Moore, Kitching, Lines, Ludlam, Ian Macdonald, Moore, Reynolds, Rhiannon, Roberts, Sterle, Watt, Xenophon.

Wednesday, 1 March 2017 Senate Page 1 

DEFENCE PORTFOLIO 

In Attendance 

Senator Payne, Minister for Defence 

Senator Scullion, Minister for Indigenous Affairs 

Department of Defence 

Portfolio overview and questions arising from opening statements 

Mr Dennis Richardson, AO, Secretary 

Air Chief Marshal Mark Binskin, AC, Chief of the Defence Force 

Outcome 1 

The protection and advancement of Australia's national interests through the provision of military 

capabilities and promotion of security and stability. 

Program 1.1: Office of the Secretary and Chief of the Defence Force 

Mr Dennis Richardson AO, Secretary 


Vice Admiral Ray Griggs, AO, CSC, Vice Chief of the Defence Force 

Mr James Gaynor, CSC, Inspector General Australian Defence Force 

Ms Rebecca Skinner, Deputy Secretary Strategic Policy and Intelligence 

Mr Marc Ablong, First Assistant Secretary Naval Shipbuilding Taskforce 

Mr Scott Dewar, First Assistant Secretary International Policy 

Mr Tom Hamilton, First Assistant Secretary Strategic Policy 

Ms Kate Louis, First Assistant Secretary Defence Industry Policy 

Mr Michael Shoebridge, First Assistant Secretary Contestability 

Air Commodore Henrik Ehlers, AM, Director General Cultural Reviews Response 

Brigadier Georgeina Whelan, AM, CSC and Bar, Director General Select Strategic Issues Management 

Ms Phillippa Crome, First Assistant Secretary, Ministerial and Executive Coordination and Communication 

Ms Victoria Bergman, Acting First Assistant Secretary, Procurement and Contracts 

Program 1.2: Navy Capabilities 

Vice Admiral Tim Barrett, AO, CSC, RAN, Chief of Navy 

Program 1.3: Army Capabilities 

Lieutenant General Angus Campbell DSC, AM, Chief of Army 

Program 1.4: Air Force Capabilities 

Air Marshal Gavin Davies, AO, CSC, Chief of Air Force 

Air Vice Marshal Warren McDonald, AM, CSC, Deputy Chief of Air Force 

Program 1.5: Joint Operations Command 



Program 1.6: Intelligence Capabilities 

Ms Rebecca Skinner, Deputy Secretary Strategic Policy and Intelligence 

Program 1.7: Vice-Chief of the Defence Force 


Major General Simone Wilkie, AO, Head Joint Enablers 

Rear Admiral Bruce Kafer, AM, CSC, Head Reserve and Youth Division/Commander ADF Cadets 

Rear Admiral Peter Quinn, CSC, Head Joint Capability Management and Integration 

Air Vice Marshal Tracy Smart, AM, Commander Joint Health 

Brigadier Michael Ashleigh, Deputy Commander Joint Logistics 

FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE

Page 2 Senate Wednesday, 1 March 2017 

Brigadier Jason Blain, DSC, CSC, Director General Force Options and Plans 

Mr Patrick Hetherington, Assistant Secretary Investment Portfolio Management 

Program 1.8: Associate Secretary—Defence Executive Support 

Mr Brendan Sargeant, Associate Secretary 

Mr Mark Cunliffe, Head Defence Legal 

Mr Michael Lysewycz, Defence Special Counsel 

Mr Adrian A'Amico, Defence General Counsel 

Air Commodore Chris Hanna, Director General ADF Legal Services 

Mr Geoffrey Brown, OAM, First Assistant Secretary Audit and Fraud Control 

Program 1.9: Associate Secretary—Estate and Infrastructure 

Mr Steve Grzeskowiak, Deputy Secretary Estate and Infrastructure 

Mr Chris Birrer, First Assistant Secretary Infrastructure 

Mr Luke McLeod, Assistant Secretary Per- and Poly-Fluoroalkyl Substances Investigation and Management 

Dr Mathew Klein, Senior Physician Occupational and Environmental Medicine 

Program 1.10: Associate Secretary—Chief Information Officer 

Dr Peter Lawrence, Chief Technology Officer 

Program 1.11: Associate Secretary—Defence People 

Ms Roxanne Kelley, PSM, Deputy Secretary Defence People 

Mr Richard Oliver, First Assistant Secretary People Services 

RADM Brett Wolski, Head People Policy 

Ms Justine Greig, First Assistant Secretary People Policy and Culture 

Program 1.12: Defence Science and Technology 

Dr Alex Zelinksy, Chief Defence Scientist 

Program 1.13: Chief Finance Officer 

Mr Phillip Prior, Chief Finance Officer 

Program 1.14: Defence Force Superannuation Benefits 

Ms Roxanne Kelley, PSM, Deputy Secretary Defence People 

Program 1.15: Housing Assistance 

Mr Steve Grzeskowiak, Deputy Secretary Estate and Infrastructure 

Program 1.16: Other administered 

Outcome 2 

The advancement of Australia's strategic interests through the conduct of military operations and other 

tasks as directed by Government. 

Program 2.1: Operations contributing to the security of the immediate neighbourhood 






Program 2.2: Operations supporting wider interests 








Outcome 3 

Support to the Australian community and civilian authorities as requested by Government. 

Program 3.1: Defence contribution to national support tasks in Australia 






Capability, Acquisition and Sustainment Group 

Outcome 1 

Contributing to the preparedness of the Australian Defence Organisation through acquisition and throughlife 

support of military equipment and supplies. 

Mr Kim Gillis, Deputy Secretary Capability Acquisition and Sustainment Group 

Mr Steve Johnson, General Manager Submarines 

Air Vice Marshal Leigh Gordon, AM, CSM, Program Manager Joint Strike Fighter 

Major General David Coghlan, AM, Head Land Systems 

Rear Admiral Tony Dalton, Head Joint Systems 

Air Vice Marshal Cath Roberts, CSC, Head Aerospace Systems 

Major General Andrew Mathewson, AM, Head Helicopter Systems 

Commodore Steve Tiffen, CSM, Acting Head Maritime Systems 

Commodore Craig Bourke, CSC, Director General Air Warfare Destroyer 

Mr Greg Divall, Capability Acquisition and Sustainment Group Business Manager 

Mr Peter Croser, Director General Specialist Ships Acquisition 

Mr Paddy Fitzpatrick, Director General Future Frigates 

Ms Liesel O'Meara, General Counsel 

Ms Phillippa Crome, First Assistant Secretary, Ministerial and Executive Coordination and Communication 

Ms Victoria Bergman, Acting First Assistant Secretary, Procurement and Contracts 

Defence Housing Australia 

Ms Jan Mason, Managing Director 

Mr Jon Brocklehurst, Chief Financial Officer 

Ms Jo Hobson, Acting General Manager Finance 

Ms Suzanne Pitson, General Manager, Portfolio Management, Marketing and Strategic Projects 

Mr Brett Jorgensen, General Manager, Property and Tenancy Services 

Mr John Dietz, General Manager, Property Provisioning Group 

Mr Shane Nielsen, General Manager, Business Enablement 

Mr Robert Henman, General Manager, Investment Management 

Mr Steve Collins, General Manager, Business Development Unit 

Mr Ross Jordan, General Manager, Governance 

Mr Jeremy Logan, Senior Executive Officer 

Mr Rob Lafreniere, Manager Member Choice Accommodation Program 

Mr Elvio Bechelli, General Manager 

Mr Vern Gallagher, General Manager, Communication and Client Relations 

Department of Veterans' Affairs 

Mr Simon Lewis, PSM, Secretary 

Ms Liz Cosson, AM, CSC, Chief Operating Officer 

Mr Craig Orme, DSC, AM, CSC, Deputy President 



Corporate and general matters 




Major General Mark Kelly, AO, DSC, Repatriation Commissioner 

Ms Narelle Dotta, First Assistant Secretary, Corporate Division 

Mr Graeme Rochow, Assistant Secretary/Chief Finance Officer, Resources Branch 

Mrs Robyn Kemp, Assistant Secretary, Parliamentary and Governance Branch 

Mr Shane McLeod, Assistant Secretary/CIO, ICT Solutions Branch 

Mr Roger Winzenberg, Assistant Secretary, People Services Branch 

Ms Carolyn Spiers, Assistant Secretary/Principal Legal Adviser, Legal Services and Assurance Branch 

Dr Ian Gardner, Principal Medical Adviser 

Dr Stephanie Hodson, National Manager, Veterans and Veterans Families Counselling Service 

Ms Lisa Foreman, First Assistant Secretary, Rehabilitation and Support Division 

Mr John Geary, Senior Responsible Officer Rehabilitation and Compensation 

Mr Neil Bayles, Assistant Secretary, Rehabilitation, Case Escalation and MRCA Review 

Mr Luke Brown, Acting Assistant Secretary, Policy Support Branch 

Ms Amber Vardos, Acting Assistant Secretary, Income Support and Grants Branch 

Mr John Sadeik, Assistant Secretary, Program Support Branch 

Ms Sue Campion, First Assistant Secretary, Health and Community Services Division 

Major General Dave Chalmers, AO, CSC, First Assistant Secretary, Commemorations and War Graves 

Division 

Ms Kate Pope, First Assistant Secretary, Transformation Taskforce 

Mr Richard Magor, Assistant Secretary, Veteran Centric Reform, Second Pass Business Case 

Mr Alex Gerrick, Assistant Secretary, Veteran Centric Reform Transformation Implementation Branch 

Ms Alison Hale, Acting Assistant Secretary, Communications Branch 

Mr Tim Evans, Assistant Secretary, Commemorations Branch 

Mr Ken Corke, Director, Office of Australian War Graves 

Outcome 1 

Maintain and enhance the financial wellbeing and self-sufficiency of eligible persons and their dependants 

through access to income support, compensation, and other support services, including advice and 

information about entitlements 

Program 1.1: Veterans' income support and allowances 

Program 1.2: Veterans' disability support 

Program 1.3: Assistance to Defence widow/ers and dependants 

Program 1.4: Assistance and other compensation for veterans and dependants 

Program 1.5: Veterans' Children Education Scheme 

Program 1.6: Military Rehabilitation and Compensation Acts—income support and compensation 

Program 1.7: Adjustments to the Military Rehabilitation and Compensation Acts liability provisions— 

income support and compensation 





Mr John Geary Senior Responsible Officer Rehabilitation and Compensation 





Mr Neil Bayles, Assistant Secretary, Rehabilitation, Case Escalation and MRCA Review 



Mr John Fely, Assistant Secretary, Procurement and Contract Management Branch 

Mr Alex Gerrick, Assistant Secretary, Veteran Centric Reform Transformation Implementation 


Outcome 2 

Maintain and enhance the physical wellbeing and quality of life of eligible persons and their dependents 

through health and other care services that promote early intervention, prevention and treatment, 

including advice and information about health service entitlements 

Program 2.1: General medical consultations and services 

Program 2.2: Veterans' hospital services 

Program 2.3: Veterans' pharmaceutical benefits 

Program 2.4: Veterans' community care and support 

Program 2.5: Veterans' counselling and other health services 

Program 2.6: Military Rehabilitation and Compensation Acts—Health and other care services 

Program 2.7: Adjustment to the Military Rehabilitation and Compensation Acts liability provisions— 

health other care services 





Dr Ian Gardner, Principal Medical Adviser 

Dr Stephanie Hodson, National Manager, Veterans and Veterans Families Counselling Service 


Ms Leonie Mack, Assistant Secretary, Mental and Social Health Branch 

Mr John Fely, Assistant Secretary, Procurement and Contract Management Branch 

Ms Veronica Hancock, Assistant Secretary, Policy Branch 

Ms Maralyn Newman, Acting Assistant Secretary, Service Access Branch 


Mr John Geary Senior Responsible Officer Rehabilitation and Compensation 



Mr Paolo Kraushaar, Acting Assistant Secretary, Program Management Branch 



Outcome 3 

Acknowledgement and commemoration of those who served Australia and its allies in wars, conflicts and 

peace operations though promoting recognition of service and sacrifice, preservation of Australia's 

wartime heritage, and official commemorations 

Program Branch 3.1: War graves and commemorations 

Program 3.2: Gallipoli related activities 







Major General Dave Chalmers, AO, CSC, First Assistant Secretary, Commemorations and War Graves 

Division 

Mr Tim Evans, Assistant Secretary, Commemorations Branch 

Ms Alison Hale, Acting Assistant Secretary, Communications Branch 

Mr Ken Corke, Director, Office of Australian War Graves 


Australian War Memorial 

Outcome 1 

Australians remembering, interpreting and understanding the Australian experience of war and its 

enduring impact through maintaining and developing the national memorial, its collection and exhibition 

of historical material, commemorative ceremonies and research 

Program 1.1: Commemorative ceremonies 

Program 1.2: National memorial and grounds 

Program 1.3: National collection 

Program 1.4: Exhibitions 

Program 1.5: Interpretive services 

Program 1.6: Promotion and community services 

Program 1.7: Research and information dissemination 

Program 1.8: Visitor services 

Dr Brendan Nelson, Director 

Ms Leanne Patterson, Acting Assistant Director, Corporate Services and Chief Finance Officer 

Ms Anne Bennie, Assistant Director, Public Programs 

Mr Tim Sullivan, Assistant Director, National Collection 

Major General Brian Dawson (Retired), Executive Manager, Spirit of ANZAC Centenary Experience 

Committee met at 08:59 

CHAIR (Senator Back): I declare open this hearing of the Senate Foreign Affairs, Defence and Trade 

Legislation Committee. The committee will begin its examination of the additional estimates for 2016-17 with the 

Department of Defence until 6 pm, Defence Housing until 6.30 pm, the Australian War Memorial after the dinner 

break and the Department of Veterans' Affairs until 11 pm. The committee has fixed Friday, 21 April 2017 as the 

date for the return of answers to questions taken on notice. I ask my colleagues to provide written questions on 

notice by Friday, 10 March. 

Under standing order 26, the committee must take all evidence in public session. This includes answers to 

questions on notice. I remind all witnesses that in giving evidence to the committee you are protected by 

parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence 

given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give 

false or misleading evidence to a committee. 

The Senate, by resolution in 1999, endorsed the following test of relevance of questions at estimates hearings: 

Any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the 

estimates are relevant questions for the purposes of estimates hearings. 

I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public 

funds where any person has a discretion to withhold details or explanations from the parliament or its committees 

unless the parliament has expressly provided otherwise. The Senate has resolved also that an officer of a 

department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given 

reasonable opportunity to refer questions asked of the officer to superior officers or to the minister. The resolution 

prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for 

explanations of policies or factual questions about when and how policies were adopted. 

I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process 

by which a claim of public interest immunity should be raised. 



The extract read as follows— 

Public interest immunity claims 

That the Senate— 

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly 

raising claims of public interest immunity as required by past resolutions of the Senate; 

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance 

as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate; 

(c) orders that the following operate as an order of continuing effect: 

(1) If: 

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from 

a Commonwealth department or agency; and 

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest 

to disclose the information or document to the committee, the officer shall state to the committee the ground on which the 

officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify 

the harm to the public interest that could result from the disclosure of the information or document. 

(2) If, after receiving the officer's statement under paragraph (1), the committee or the senator requests the officer to refer 

the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to 

the minister. 

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to 

disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground 

for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or 

document. 

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result 

from the disclosure of the information or document to the committee could result only from the publication of the information 

or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the 

committee as in camera evidence. 

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement 

does not sufficiently justify the withholding of the information or document from the committee, the committee shall report 

the matter to the Senate. 

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from 

raising the matter in the Senate in accordance with other procedures of the Senate. 

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal 

deliberations of, government, in the absence of specification of the harm to the public interest that could result from the 

disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4). 

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an 

agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the 

committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall 

then be required to provide a statement in accordance with paragraph (3). 

(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009. 

(13 May 2009 J.1941) 

(Extract, Senate Standing Orders) 

Witnesses are specifically reminded that a statement that information or a document is confidential or consists of 

advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are 

required to provide some specific indication of the harm to the public interest that could result from the disclosure 

of the information or document. 

Department of Defence 

[09:02] 

CHAIR: I welcome Senator the Hon. Marise Payne, Minister for Defence. Good morning, Minister. 

Senator Payne: Good morning. 

CHAIR: I also welcome the Secretary of the Department of Defence, Mr Dennis Richardson; Air Chief 

Marshall Mark Binskin, Chief of the Defence Force; and officers of the department. Minister, do you wish to 

make an opening statement? 

Senator Payne: No. 

CHAIR: CDF, I understand that you do, after which I will invite the secretary to make an opening statement. 



Air Chief Marshal Binskin: Thank you, Chair. I would like to give an overview of operations around the 

globe at the moment. Firstly, our operations in Iraq are currently focused on supporting the Iraqi security forces as 

they continue their offensive to regain control of the city of Mosul. In late January, Prime Minister Abadi declared 

east Mosul had been fully liberated. On 19 February he announced the start of Iraq's campaign to retake west 

Mosul. Over the past week the Iraqis have recaptured a number of strategic positions, including Ghazlani military 

base and Mosul Airport, with support from coalition nations, including Australian special forces advisers and the 

Air Task Group. 

I had the opportunity to join the Air Task Group during a recent mission in support of the Mosul operations. 

Flying over Iraq, observing the FA18 Hornets, find the targeting processes as well as monitoring the interaction 

between coalition aircraft and ground forces, reinforced the complexity of the battle space and the excellent work 

our people are doing at all levels of operations against Daesh. In numeric terms, to date the Wedgetail has 

completed 319 airborne command and control sorties while the KC30 tanker has offloaded an impressive 

33,000,000 kilograms of fuel to Australian and coalition aircraft since Operation Okra commenced in October 

2014. 

Our Hornet aircraft have conducted more than 2,100 sorties over Iraq and Syria, including those in support of 

the Mosul offensive, which began last October. During the Mosul offensive, our Hornets have struck over 130 

targets around Mosul, including Daesh fighting positions, IED factories, weapons storage facilities and a tunnel 

system used to conceal and move both weapons and fighters. 

I also spent some time with the Australian Special Operations Task Group, including the remotely based Joint 

Terminal Attack Controllers who have been highly effective in supporting Iraqi ground forces. Working closely 

with other coalition advise and assist teams, they have coordinated over 450 strikes that have allowed the Iraqi 

counterterrorism service to maintain its momentum in the Mosul offensive. When the counterterrorism service has 

suffered casualties, Australian special forces medics have helped provide critical combat first aid to their 

wounded Iraqi counterparts. This support has not only saved lives, it has strengthened the relationship between 

our soldiers and the Iraqi soldiers. 

The counterterrorism service is also ably supported by Iraq's regular security forces, many of whom have 

trained under Task Group Taji. As the combined Australian and New Zealand building partner capacity mission 

approaches the two year mark, successive rotations have trained in excess of 19,000 Iraqi soldiers and, more 

recently, federal police. When I visited them in January, a number of units that had trained with Task Group Taji 

before had recently returned for further instruction. Battle hardened but more confident in their own capability, 

these soldiers have developed a special relationship with their Australian trainers. 

Senators, that rapport and respect for Australian Defence Force personnel is echoed across all our operations in 

the Middle East region. Our people are doing an excellent job delivering exactly what government has asked us to 

do. Everyone I met, from the technicians maintaining our aircraft to the intelligence and legal offices providing 

critical support through to the Australians who are engaged at the technical level, understand the importance of 

that mission and are proud of the work they are doing to disrupt, degrade and ultimately support the defeat of 

Daesh. I know that that sentiment will be repeated later this year when I meet the ADF personnel training, 

advising and assisting the national security and defence forces in Afghanistan in their fight against the Taliban. 

Australia remains one of the largest non-NATO contributors to the resolute support mission in Afghanistan. 

Although this is a non-combat training mission, our ongoing assistance has seen the Afghan forces continue to 

mature. Despite the persistent threat from insurgent and terrorist groups, local security forces have demonstrated 

their ability to hold territory, retaining control of the country's major population centres, including Tarin Kot. 

Afghanistan's future security, however, will depend on the government's ability to raise, train and sustain its 

defence and security forces. The Afghan National Army officer academy outside of Kabul is an integral part of 

forward planning and so are the ADF trainers and advisers who are working with the next generation of Afghan 

military leaders. Since it was established in 2013, around 2,000 army officers have successfully completed 

military training at the academy. 

As you are aware, there is a third arm supporting our training missions and strike operations in the Middle East, 

and that is our maritime contribution. The Royal Australian Navy is one of 31 nations patrolling more than 3.2 

million square miles of ocean as part of the combined maritime force maintaining security and stability in 

international waters. HMAS Arunta is currently on a nine-month deployment conducting counter-piracy and 

counter-narcotics operations to cut off major sources of funding for terrorist and criminal organisations. Arunta is 

the 64th Royal Australian Navy vessel to conduct this mission. Since January 2014, Australian ships have seized 

and destroyed illegal narcotics worth an estimated $2.68 billion. 



Senators, our contribution to the Middle East region accounts for approximately 70 per cent of all ADF 

personnel currently deployed on operations. Importantly, today newly promoted Major General Simon Stuart 

takes over as force commander overseeing the multinational peacekeeping observer force in the Sinai Peninsula. 

He is only the second Australian to command the multinational force and observers since the mission began 30 

years ago. The remainder of our personnel are undertaking important work on a range of operations at home and 

abroad, including in South Sudan. In our immediate region, the interagency relationships established on border 

protection operations have allowed the ADF, Australian Federal Police and Australian Border Force to 

successfully conduct a number of joint counter narcotic operations. Using the same skills as our boarding parties 

in the Middle East, sailors in Australian navy ships Newcastle, Adelaide and Bathurst have intercepted shipments 

of cocaine and methamphetamines with the combined street value of over $426 million, including the largest ever 

cocaine bust, which prevented 1.4 tonnes of cocaine hitting our streets. 

Our ability to support these joint operations in support of whole-of-government outcomes demonstrate the 

ADF's agility and our interoperability. We pride ourselves on being able to complete our mission, whatever the 

task we are asked to perform and wherever that may be. 

CHAIR: CDF, I will ask you to table that report. Secretary, you have an opening statement? 

Mr Richardson: I would like to say a few words about the department in overall terms and also in particular 

about the work of public servants in Defence. In respect of the APS in Defence, it is worth noting that over 10 per 

cent of them work in the intelligence agencies on counterterrorism support to ADF operations and other activities. 

Around 10 per cent of public servants in Defence are in contract and procurement management and over 20 per 

cent of the APS in Defence are scientists, engineers and also technical. Other public servants in Defence work on 

policy. There are doctors, psychologists, social workers, estate base and infrastructure managers, project 

managers, they work on ICT, personnel, finance and security. So the work of public servants in Defence is 

diverse. 

We have completed the downsizing of the Defence APS. To put that in perspective, since the downsizing 

began, in the four years following the commencement of the downsizing in late 2012, the full-time staff 

equivalent of public servants in Defence has gone from 22,300 to under 17,200. That is a reduction of over 22 per 

cent. We are now building the APS back to its ceiling of 18,200. We deliberately took it down below the ceiling 

because we need to have a different workforce mix to what we had previously, consistent with the white paper 

and other demands on the department. In particular, the beneficiaries of the build back will be in the ship building 

area and in the cyber area. The Australian Signals Directorate will grow by around 350 over the next three years. 

That is a part of the organisation which is important to the government overall and an important part of the 

intelligence community. It is a part of the department that has a different remuneration structure to other parts of 

Defence. For quite some time people in ASD with particular skills have been paid more than their APS 

equivalents so as to compete with the demands on people with those skills outside of government. About three 

months ago I approved a special arrangement whereby a limited number of people in ASD with selected skills can 

receive up to 40 per cent more than their APS equivalents. 

We have had challenges in recruitment in the intelligence and other parts of Defence as a result of requirements 

of security vetting, but we are now getting well on top of that. The implementation of the first principles review is 

now well advanced. As you know, the two-year implementation of the first principles review commenced on 1 

July 2015. The oversight board, chaired by David Peever has continued to meet regularly and the CDF and myself 

chair an implementation committee that has met every week but four since April of 2015. Four meetings have 

been missed since April of 2015—persistence and consistency being the message. The new Defence committee, 

the investment committee and the enterprise business committee are now working effectively and I would note 

that the investment committee has a representative from each of the Department of Finance and the Department of 

Prime Minister and Cabinet. 

The Pathway to Change program was a cultural change program that commenced in April 2012. It was a fiveyear 

cultural change program. We commenced work some months ago on a successor to that and we will have a 

successor in place by the middle of the year. I would simply note that over the last 12 months, some 46 per cent of 

all SES appointments were women. The number of women in the Defence senior executive service has grown 

from 31 to 45 over the last 12 months. The proportion of women in the Defence graduate program has also 

increased from 39 per cent in 2014 to 45 per cent today. I note that three years ago the percentage of Indigenous 

Australians in Defence APS was 0.7 per cent. Today it is two per cent. That is almost a threefold increase. It is 

still below where it should be but it is a significant improvement. 

I would also note the initiatives that Defence has taken outside of any government requirements, particularly in 

the area of employment of people with disabilities. We have a partnership with Hewlett-Packard. They have a 



program globally called Dandelion. We have nine people in Defence as part of that program on the autism 

spectrum with special skills and we have rolled out the Defence administrative assistance program in Townsville, 

Amberley, Enoggera, Holsworthy, Victoria Barracks Melbourne, Edinburgh and Stirling and are about to roll out 

in Robertson in Darwin. That program employs people with intellectual disabilities. Some 115 to 130 people with 

intellectual disabilities who did not previously have a job now have a job with Defence. We do that on a business 

proposition. We work in partnership with different community groups and those individuals are providing service 

to Defence which we were not previously getting. 

On the policy front, I would simply note the challenges of North Korea, the South China Sea, Afghanistan, Iraq 

and Syria. I would also note, obviously, the work that is now going on with the new administration in the US. In 

that context, I would note that we have completed the force posture cost sharing agreement with the US in respect 

of their activities in northern Australia. Other issues, of course, are the legacy contamination issues on the estate 

and the need to expand certain training areas, particularly to meet ADF requirements. Finally, looking ahead, I 

would note that APS numbers in the budget in Defence will come under some pressure over the next four years. I 

am not by any means suggesting that that will be unmanageable, but I think it is worth noting because there 

appears to be an assumption sometimes made that there is slack in the Defence budget. I would simply note for 

the record that that is not the case. It is going to tighten up considerably in the next three to four years as 

shipbuilding and other activities start to bite. Thank you. 

CHAIR: Thank you, Secretary. We will go to questions. Senator Farrell. 

Senator FARRELL: CDF, you gave us an outline of some of your activities. In respect of the Middle East, 

have you seen any changes in the disposition of tactics employed by Daesh since we last spoke? 

Air Chief Marshal Binskin: Yes, we have. If we go back two years, Daesh were fighting as a formed group 

out in the open, manoeuvring quite well and more along a conventional line than an insurgency. We are still 

seeing them fighting along conventional lines. We see their weapons of choice are still vehicle borne improvised 

explosive devices. The assaults that the counterterrorism service are conducting on Mosul, the first line of defence 

that comes at some are multiple VBIED attacks. So these could come just as vehicles that are loaded up but are 

more likely now what you would hear termed Mad Max vehicles. There is lots of steel around them with small 

slits for the drivers to see and they are predominantly suicide attacks. 

Senator FARRELL: Mad Max 4 vehicles or— 

Air Chief Marshal Binskin: Not one but the two to four regime. But you get the idea of the vehicles that are 

going against them. They are coordinated now with what we are seeing as a predominantly growing threat, which 

is the unmanned aerial systems. I will call them drones, because that is what most people call them. They are the 

little commercial ones that you can buy. You are seeing a lot of those now starting to appear over the battlefield 

armed with grenades. They are small weapons, but it is enough to create havoc and, if you are in the wrong spot, 

to kill you. So we are seeing a marked growth in that area as well as Daesh now starting to work the defences in 

what is a very tight urban environment, which is western Mosul. I would say the growth in the commercial UAS 

is the area that has changed since we last got together. 

Senator FARRELL: How do you defend against drones dropping— 

Air Chief Marshal Binskin: There are a number of ways of doing that. I would not propose we talk about it 

in the open. But it is anything to kinetic to other modes of being able to disrupt them. They are limited in what 

they can do, but in close urban fighting they have the range to be able to create problems to the assaulting force. 

Senator FARRELL: Has there been any notable change to the threat posed to either our own forces of 

coalition forces? 

Air Chief Marshal Binskin: No, I do not believe so. We continue to monitor the threat environment that they 

are a part of. They are moving with the headquarters of the CTS as they move forward in the assault. So we have 

our people at forward operating bases but we keep a very close eye on the threats and risks that they may pose. 

They are the same threats and risks predominantly that we faced throughout the last couple of years. 

Senator FARRELL: So things have not changed in that respect? 

Air Chief Marshal Binskin: No, but I will say that it is still a risky environment that they operate in. Even 

though they operate at the headquarters level, it is still a risky environment, so we keep a close eye on it. 

Senator FARRELL: I want to talk about a few aspects of Operation Okra. I know that you mentioned some 

of them in your opening statement. Could you tell us how many FA18s we have deployed at the moment and are 

they classic or Super Hornets? 



Air Chief Marshal Binskin: They are classic Hornets at the moment. As you know, we are approved to 

deploy up to 8 Hornets, whether they be super or classic. Currently they are classic. We normally have six in 

country for operations in the base in the Middle East we operate from. At the moment, temporarily for a couple of 

months, we have a seventh aeroplane in theatre. This is predominantly from an administrative point of view. We 

are across doing an exercise with one of the countries in the Middle East. This is part of our normal exercises. At 

the time we were doing what we call a 'tail swap' of aircraft. About every six to eight weeks we will swap a 

couple of aeroplanes out to bring them back for a deep level maintenance back in Australia. As part of that tail 

swap, we did an exercise in country. To reduce the number of tail swaps we do, we left an extra aircraft in there 

for a period of a couple of months. The rate of effort has gone up a little bit in support of Mosul. We could have 

done that with the six aeroplanes. The seventh just makes it easier for the maintainers and takes an administrative 

costs from one of the swap outs away. 

Senator FARRELL: I think you mentioned how many times we have flown, but I'm not sure you have 

distinguished between Iraq and Syria. Would you be able to give us that information? 

Air Chief Marshal Binskin: You are more after the FA18s, I would imagine. 

Senator FARRELL: Yes, I am. 

Air Chief Marshal Binskin: The Super Hornets flew 418 sorties in total. That was all in Iraq. The classic 

Hornets have flown 1,749 sorties in total, of which 48 have been in Syria. 

Senator FARRELL: On average, how many missions are we flying daily or weekly and on how many 

occasions have our pilots fired their weapons? 

Air Chief Marshal Binskin: I will not get into the daily rate of effort, but I am happy to talk in camera a bit 

more about what the rate of effort is. The super Hornets employed 278 weapons during that time, and they were 

the first rotation through. The classic Hornets have dropped 1,425 precision weapons in total, of which 67 have 

been in Syria. 

Senator FARRELL: Have any RAAF asset been fired upon while undertaking operations since the last 

estimates? 

Air Chief Marshal Binskin: I have not had any reports of them being fired on, but that does not mean that it 

has not happened. Although they do operate in an environment that is well clear of the predominant number of 

weapons systems that are in Iraq and Syria. That doesn't mean a soldier hasn't picked up a gun and shot something 

at them. But the chances of that doing anything is quite slim—touch wood. 

Senator FARRELL: Can you tell us how our contribution to the war effort is compared to the other 

participants? 

Air Chief Marshal Binskin: The Australian contribution is a substantial contribution. You can talk about 

whether it is the second-largest after the US in the coalition in Iraq. It is difficult to compare because some 

nations are doing something on the ground, others are doing it in the air. But when you look at the combination of 

what we are doing with our task group, we have the strike aircraft, the tanker, the Wedgetail airborne early 

warning and control aircraft and the building partner capacity at Taji, which is about 300 Australians. You can 

also look at the 50 or so embeds we have in coalition headquarters and the special operations task group that sits 

around about 80. You do that combined air and land and it is a substantial contribution. And it is a valued 

contribution for Iraq. 

Senator FARRELL: Obviously the United States is doing most of the work. How do we compare with the 

other countries around our size in terms of contribution? 

Air Chief Marshal Binskin: If you look at our deployment compared to other countries that are involved, I 

would say that we are pretty much to the top of the coalition. It would depend. For example, if the French had an 

aircraft carrier in, that would increase their contribution. When the aircraft carrier is not in it reduces their 

contribution. But consistently, I would say we have been probably close to leading the other coalition nations in 

just size and what we are doing with our force. 

Senator FARRELL: Is that recognised by those other countries? 

Air Chief Marshal Binskin: Yes, it is. 

Senator Payne: And by the government of Iraq, Senator. Most definitely. There are 34 or 35 countries who 

participate in the large minister’s meeting of the counter ISIL coalition, the most recent meeting of which was 

held at NATO headquarters in Brussels about 10 days ago, which I attended. In the small ministerial group there 

are about 12 members—that is, 12 of the larger contributors. In the past months, each iteration of the counter ISIL 

meeting has seen an increase in the numbers participating. And new ministers, and therefore new countries, 



attending. I think the recognition is most certainly there from the government of Iraq and from the United States 

as leader of the coalition and from our normal counterparts in the international context. The building partner 

capacity mission is a particularly apposite example, I think. If you look at the numbers that have been trained by 

our soldiers in conjunction with the NZ DF in Taji, we have trained over 16,000 regular Army personnel in the 

Iraqi security forces, which has made a significant contribution to what they have been able to achieve in the past 

in terms of their actions. Since the extension of our training activity, we have trained almost 2,000 police. They 

are used in different ways and there is different nomenclature in terms of what they are called by the Iraqi 

government. But there are almost 2,000 of those, whose role will be to pursue stability in areas that have been 

liberated. In those very simple terms, that is an indication of the pretty extensive contribution from Australia. 

Senator FARRELL: What is the purpose of those people after liberation? 

Senator Payne: Police. Stability. 

Senator FARRELL: Right. 

Senator Payne: Stability in communities that have been liberated from Daesh. The government agreed to that 

extension of our training activities from our building partner capacity activities in Taji. 

Senator FARRELL: You mentioned that there are a number of additional countries now involved. Can you 

tell us who they are? 

Senator Payne: I would have to get a full list for you. But I do know that the most recent addition to the table 

in Brussels at the last meeting was Lithuania. 

Air Chief Marshal Binskin: There are about 64 nations involved one way or another in the coalition. Some 

of that might be financial support or political support. There are just over 30 that are contributing forces one way 

or another. When you look at the component, there are a small number of nations and then there is a smaller 

number again that are doing strikes. Our contribution is right up there. As the senator, or the minister, said, it is 

valued very much by the Iraqis. 

Senator FARRELL: She is also a senator. 

Air Chief Marshal Binskin: She is. But she is my minister. 

Senator FARRELL: It’s not Christopher Pyne? 

Air Chief Marshal Binskin: We share a lot of ministers. I am very proud to have the senator as our minister. 

I have lost my train of thought. Sorry about that. 

Senator FARRELL: I have distracted you, CDF. 

Air Chief Marshal Binskin: It is valued. As the minister said, whenever we talk to the Iraqis, and I met with 

my counterpart, the CDF, in January, the first part of the conversation is always the value that they place on the 

support we are giving them. If you look at the senior Iraqi government participation in the graduations at Taji, it is 

either the defence minister or the PM, that level, who will turn up to those graduations. That is the significance 

that they see in the support that we give them. 

Senator FARRELL: Have you been to some of those? 

Air Chief Marshal Binskin: I have not been to the graduations, no. 

Senator FARRELL: The minister mentioned additional countries. You have talked about the variety of 

contributions you can make. Have those new countries also been actually providing military forces or are they 

countries that are supplying financial contributions? 

Senator Payne: Some of them do; some of them don’t. We will take on notice to provide, as is available 

publicly, a list for the committee. 

Senator FARRELL: Thank you. Just talking about task group Taji: did you say that we have completed all of 

the training? 

Air Chief Marshal Binskin: We continue to complete their training. Units come through on a four-, six-, 

eight- or nine-week training course. It depends on the requirement for their on operations. It depends whether it is 

police or army. It depends on what they are going to do afterwards. We have had some units, as I alluded to, that 

we trained initially who have come back through for refresher training prior to them then moving to the next 

front. That is where we are seeing the change in their capability, their attitudes and their ability to work together 

as units, when they do come back in after they have been out fighting. 

Senator FARRELL: Does that mean that you are seeing them more than once in terms of training? 

Air Chief Marshal Binskin: Some units, yes. 



Senator FARRELL: And you are noticing an increase in confidence? 

Air Chief Marshal Binskin: There is an increase in confidence. And, as I mentioned in my opening 

statement, a battle-hardened approach to what they are doing. We are seeing it in their employment of tactics, 

how they manoeuvre and how they coordinate, improving with each iteration as well and with each assault. In the 

assault of Mosul we have seen them change their tactics and improve how they coordinate between the CTS, the 

federal police, the regular army and how they are manoeuvring. So we are seeing that improvement month to 

month as the operations continue. 

Senator FARRELL: You would say that was partly because of the training that we are giving them? 

Air Chief Marshal Binskin: It is definitely because of the training that not only Australia is giving them but 

other members of the coalition as well, and the building partner capacity. Then there is also the work that our 

Special Operations Task Group is doing in conjunction with a couple of other nations, working very closely with 

counterterrorism service. We are definitely seeing the input of the mentoring, the advising and the assisting there 

being played out in operations. 

Senator FARRELL: Did you say we have trained 16,000? 

Air Chief Marshal Binskin: If you look at the total, it is about 19,000 when you combine everything. I think 

the minister mentioned 16,000 Iraqi army and then there are police on top of that. 

Senator Payne: There are 2,000 or so police. 

Air Chief Marshal Binskin: When you add it all up it is about 19,000. 

Senator FARRELL: I think you mentioned in your opening statement about the retaking of east Mosul. Now 

activity is focused on west Mosul. Can you give us any clearer picture of what is happening there? 

Air Chief Marshal Binskin: I think what you are seeing in the open source media gives you a good idea of 

the operations and the intensity of fighting that is going on in west Mosul. 

Senator FARRELL: All right. I want to read out a little media report from 22 February and ask a question 

about it. It said: 

But an estimated 750,000 civilians are under siege across the Tigris River which is home to the old city with narrower 

streets and denser terrain. 

Australian Defence Force chief of joint operations Vice Admiral David Johnston— 

Not to be confused with the Senator— 

warned there is likely to be IS (Daesh) sleeper cells among the civilian population in the city's east who will conduct terrorist 

attacks to delay the offensive in the west. 

Do you have any advice on the number of civilian casualties arising from the ground offensive? 

Air Chief Marshal Binskin: I do not have advice on the number of civilian casualties, but I can say to you 

that everything that we do in our operations aims to minimise civilian casualties. When they are in a war zone, 

and it is a tight urban area, that is difficult to do. But part of our processes and what we work with the Iraqis with 

is always to look to minimise civilian casualties in the operations. 

That being said, we are working against an adversary, ISIL, who do not care about civilian casualties. In fact, 

inflicting as much damage as they can on the population is a part of their operation. It is a tragedy. As we get into 

the closer urban fighting in Mosul—and it is tighter, as the old city of Mosul is on the western side–that could 

become more of an issue. It is just something that the planners will have to take into account and those on the 

ground will have to factor in for their operations. 

CHAIR: Can I just ask you to stop there for a moment and I will go to Senate Fawcett. 

Senator FAWCETT: Mr Richardson, can I move on from your opening statement to the budget overview? I 

would like to talk specifically about table 1.3, budget measures, which I note has not been updated in your 

additional estimates. I have raised a number of times in the past the issue of transparency of absorbed measures 

and I am pleased to see in this table there are some footnotes that actually highlight some absorbed measures. 

Having highlighted those, are they the only absorbed measures in the budget or are there others that have not been 

flagged? 

Mr Richardson: No, that would not be the totality of absorbed measures. 

Senator FAWCETT: Could I commend you for identifying some and request that, where possible, any 

individual amount that can be identified as an absorbed measure is? I repeat my request in the light of what we 

have seen in the past where a lot of back-of-house functions were hollowed out as a consequence of absorbed 



measures—that we do see a tabulation outside of all your approved accounting practices of absorbed measures 

and the impact it has had on estate remediation, training, maintenance contracts and anything else? 

Mr Richardson: Where we can do that we will have a look at that. 

Senator FAWCETT: Mr Prior, are you able to give me an idea of why these particular measures were 

flagged as absorbed but others have not been? 

Mr Prior: Are you referring to table 6, the budget measures list? 

Senator FAWCETT: I am referring to table 2, Defence 2016-17 budget measures and the footnotes to a 

number of the measures in that. 

Mr Prior: You are referring to the measures that have been announced by the government. They are 

articulated there. They are in line with the MYEFO statement put out by the government. Those are the measures 

decided by the government to be announced. 

Senator FAWCETT: I understand that. What I am highlighting is that you have chosen in this instance– 

which I welcome—to note that they are absorbed measures. So it is an announced policy or activity that it is 

going to be absorbed within the Defence budget. I applaud that. I am just asking what the threshold is around 

those. We have identified it and yet according to the secretary there are other measures where we have not flagged 

that. Again, the context that I am coming from here is that over the past eight to 10 years we have seen amounts in 

excess of $1 billion of essentially unfunded liability around facilities remediation to operational things like fuel 

farms because of this growing impact of absorbed measures. I am keen to see transparency in that reporting. 

Mr Prior: As I think we have discussed before, this document in its content is governed by the budget 

measures rules promulgated by the Department of Finance. What is included in this particular table is governed 

by that process. And we follow that precisely. This reflects what is also contained in the budget measures budget 

paper No. 2, documents that are published at the whole-of-government level. This is a reflection of that in the 

context of Defence. That is why this table is here and the notes at the bottom are a summation of the measure 

description that is contained in the whole-of-government measures documents. That is why that is there. That is to 

reflect those government decisions. 

Senator FAWCETT: That is fine, and I completely understand that you apply that process precisely. I am 

just asking that if you have applied it and put the footnotes in here, could you extend it to other measures and 

even perhaps include an additional table, even if it is the very last appendix of the report, that flags what 

additional absorbed measures have been taken by the department? 

Mr Prior: As the secretary has said, we will look at that and take that into consideration. 

Senator FAWCETT: Thank you. Can I also take you to table 12, which is for resources across the 

department. It is a fairly broad question. You obviously have an incremental increase in funding against each of 

the outcomes over the forward estimates. I take you back to the work done by Pappas, where he was trying to 

quantify cost growth pressures for existing assets, personnel and equipment as well as allowing for new 

acquisition. I am happy for you to take this on notice. I am just wondering if you can give the committee an 

understanding of how much of Pappas’s work has been included in this to make sure that the force in being and 

the infrastructure in being is adequately funded in these increases to make sure they are sustained at a suitable 

level of readiness and capability as well as, obviously, funding for new measures that are coming in? 

Senator Payne: Just to clarify, Senator, are you in 1.5, table 12? 

Senator FAWCETT: This is page 33 of the budget statement, table 12. 

Senator Payne: There is actually a summary for program 1.4, Air Force capabilities. 

Senator FAWCETT: No, this is page 33, table 12. It is entitled, ‘Total Budgeted Resources Available for 

Outcome 1’. 

Mr Prior: Of the additional estimates document? 

Senator FAWCETT: No, this is the portfolio budget statement, not additional estimates. 

Senator Payne: I just wanted to make sure we were all working from the same table 12. 

Senator FAWCETT: That is fine. This was not updated as part of the additional estimates. 

Mr Prior: We can have a look at that and take it on notice. 

Senator FAWCETT: Chair, I have some other questions that arise out of the portfolio budget statements but 

they do go to the various programs around personnel, air or land. Do you wish me to wait until those come up? 

CHAIR: If we can, yes. 



Senator KIM CARR: Air Chief Marshall, I am interested in your opening statement. Thank you very much 

for that. In particular, though, I do not recall you referring to the operation near Deir al-Zor in Syria on September 

18. Can you give us an update to the inquiry? This is the event that led to the killing of 83 Syrian troops. 

Air Chief Marshal Binskin: I think the one you are alluding to was the strike where we were a part of four 

nations that struck forces around the south-west of Deir al-Zor. That is the one that, after the bombing 

commenced–- 

Senator KIM CARR: Yes, there appears to be a number of different spellings. The Hansard has a different 

spelling. 

Air Chief Marshal Binskin: Yes, and it is pronounced 1,000 different ways as well. 

Senator KIM CARR: We have the right one. It was 18 September last year. 

Air Chief Marshal Binskin: Yes, we have the same one. An investigation was conducted into that mission. It 

was a coalition investigation led by the US. The investigation found that the strikes were conducted in full 

compliance with the rules of engagement and the laws of armed conflict. The decisions that identified that those 

forces on the ground at the time were Daesh fighters were supported by the information available to the planners 

and the decision-makers at the time, and there was no evidence of deliberate disregard of targeting procedures or 

rules of engagement that were identified in that. So, basically, with the information that they had at the time in the 

planning for that strike, and the identification of the targets on the ground, the assessment was that they were 

Daesh fighters and the decisions were made that way. Subsequently, with information that became available after 

the fact, it appeared, but was not 100 per cent confirmed, that they were forces aligned with the Syrian regime. 

They were not necessarily Syrian forces but it is more than likely they were those forces. Interestingly, the 

Syrians did not give us any information, besides the initial indication we had on the targeting. There was no other 

information that came out on who may have been on the ground in that particular position. 

Senator KIM CARR: So were they Syrian army or not? 

Air Chief Marshal Binskin: I do not know. 

Senator KIM CARR: You still do not know? 

Air Chief Marshal Binskin: It is more likely than not that they were forces aligned with the regime. That is 

the best definition we could come up with for those forces on the ground. Also, interestingly, recently fighting has 

been conducted around that area and ISIL have control of that area. So it has obviously moved backwards and 

forwards over time. 

Senator KIM CARR: The media reports refer to mistakes in targeting. Was that an accurate description? 

Air Chief Marshal Binskin: That is the in-hindsight assessment. Again, when it analysed all the data 

available to the decision-makers at the time the review found that the decisions made with the information they 

had were valid. It was only what came up after the fact that led to the assessment that they were Syrian-aligned 

forces. 

Senator KIM CARR: You told us at the hearings on 19 October that bombing ceased immediately and an 

inquiry was commenced. So how did you find out that the coalition forces were bombing the wrong targets? 

Air Chief Marshal Binskin: You may remember the reports at the time. I was not here on 9 October. That 

was the vice chief. 

Senator KIM CARR: My apologies. You are quite right. 

Air Chief Marshal Binskin: That is okay. I know the details. What happened was that the strikes commenced 

and after a period of time into the strikes being conducted there was a phone call through the Coalition Air and 

Space Operations Centre from the Russian coordination person, as part of the Syrian side of the operation, who 

indicated that the strikes were being conducted against Syrian forces. That was the first indicator. The minute that 

phone call came through and that person made contact with their counterpart in the CAOC the strikes ceased. 

Senator KIM CARR: What are the lessons that we have learnt out of this? 

Air Chief Marshal Binskin: There were a number of recommendations out of it in the process. What 

happened here was part of a dynamic-targeting evolution. The processes that were changed were to make sure that 

the decision-makers had all the information, not just at that level but all throughout the intelligence system 

available to them, to be able to make those decisions. But I will say that Syria is a complex environment, with a 

number of different nations, interests and organisations in there. Syria is difficult to work in. 

Senator KIM CARR: Is there a hotline in operation that does allow for communications between the Syrian 

government and the coalition? 



Air Chief Marshal Binskin: It is a hotline that is more for deconfliction of air operations between the Russian 

and Syrian air operations and the coalition air operations, noting that when we are talking about targeting ISIL we 

are both targeting the same forces. Again, interestingly, on that Deir al-Zor strike you are talking about, as the 

targeting and the engagement ceased and the aircraft moved back, the Russian air force moved in and started 

engaging targets not that far away. It is more a deconfliction telephone rather than for coordination of movement 

of forces on the ground. 

Senator KIM CARR: Can I turn to you, Mr Secretary, and your comments in regard to the changes in the 

personnel structure? I thank you very much for that. It is quite clear that Defence is seeking to fundamentally 

restructure its operations and it is obvious you are making considerable progress in that regard. Can you give me 

some advice on an area I do not think you mentioned? I am sure you will correct me if I have misunderstood you. 

You mentioned a range of what we used to call 'targeted equity groups'. Did you mention Indigenous employees? 

Mr Richardson: Yes, I did. 

Senator KIM CARR: Could you tell me what the headcount is on Indigenous Australians currently working 

in the Defence department? 

Mr Richardson: I will get someone else to mention the headcount. Three years ago, 0.7 per cent of the APS 

workforce were Indigenous. Today, two per cent of the APS workforce is Indigenous. We had a very big program 

over the last three years on that. We have essentially increased threefold. We can get the headcount for you. 

Senator KIM CARR: I take it that the recruitment program is working well, is it? 

Mr Richardson: Yes. There are 368 Indigenous APS personnel. 

Senator KIM CARR: What is the highest ranking person in that category? 

Mr Richardson: EL2, I think. 

Senator KIM CARR: Has this program been under review in recent times? 

Mr Richardson: We have something called the Defence Civilian Committee that meets fortnightly. We 

would visit issues relating to Indigenous employment at least once every three months and sometimes every 

month. We have engagement with the Public Service Commission on it and we have engagement with other 

interested groups. The big challenge, speaking personally, over and above recruitment, is maintenance of staff. 

The separation rate for Indigenous APS is higher than for the APS generally. We want to reduce that separation 

rate. 

Senator KIM CARR: That was the point I was going to. It has been put to me that while you are recruiting 

quite successfully, retention is a more complex problem. 

Mr Richardson: It is. But any suggestion that we are simply replacing the people who leave is sheer 

nonsense. Three years ago 0.7 per cent of the APS workforce were Indigenous. Today it is two per cent. 

Senator KIM CARR: Is there an exit interview process for people leaving the service? 

Ms Kelley: We are looking at a number of strategies for improving our retention. Some of that is looking at 

career development opportunities and progression, improving our supervisor awareness and support, and cultural 

awareness. I will let Justine clarify whether we are actually doing exit interviews at the moment. 

Ms Greig: With the increase in the number of Indigenous trainees, which has been particularly high in the last 

year or so, as the secretary mentioned, we certainly work very closely with the trainees. If we start to get any 

indicators with this group that they may not be comfortable, happy, challenged or enjoying the workplace, we 

take a close interest. For those in that group that we have unfortunately lost for whatever reason, we have worked 

closely with them all the way through from commencement right to when they decide or elect to leave the 

organisation. We do put particular focus on the trainee group. They are a young group. They have different 

driving factors to many other parts of the workforce. So whilst they are not formal exit interviews, we do it in a 

more individualised fashion. 

Senator KIM CARR: So how many people who you have recruited have subsequently left? 

Ms Greig: I think we would rather come back to you with the exact numbers. 

Senator KIM CARR: Okay. 

Ms Greig: It is important also to break that down in terms of who from that trainee group we have done a lot 

of work with, to try and really look at what it is that we can do further to support, versus other cohorts or groups 

in the department. 

Senator KIM CARR: Thank you. I appreciate that. If you can provide the committee with advice on what 

steps you are taking to actually improve the situation, it would be helpful. Mr Secretary, you referred to the 



Defence numbers. I am particularly interested in some reported remarks that you have made on the question of 

contractors. In an article on 20 February in the Canberra Times it was reported that you said that the number of 

contracts is now outnumbering the Public Service workforce in the department. I am wondering if that is the case? 

Mr Richardson: No, it is not. That is an inaccurate report. The number of service providers plus contractors 

and consultants would outnumber public servants. There is nothing unusual in that. We only have an estimate of 

the number of people employed by service providers. With service providers, you enter into a contract for a 

particular service to be delivered, and the number of people who they employ to deliver that service is their 

business. We do not determine the number they employ. For instance, the garrison service contracts we have. 

That’s catering. Service providers include caterers and people who mow lawns. It is people who do the full range 

of looking after bases. The three areas in which most service providers deliver people are in the area of estate 

management, capability acquisition and sustainment, particularly in the maintenance and sustainment side of a 

house and, thirdly, in ICT. With consultants, again, you enter into a contract with a firm to do a particular job. 

The number of people they employ to do that job is their business. We do though the numbers of contractors. At 

the moment it is around 700. 

Senator KIM CARR: Has that changed in recent years? 

Mr Richardson: Yes, it has. The number of contractors has pretty much doubled in the last 12 months. 

Senator KIM CARR: How do you account for that? 

Mr Richardson: I am not entirely sure. Let me put it in context. Any suggestion that APS goes down and 

contractor and other numbers automatically go up is just dead wrong. Let me put in context. As I mentioned in my 

opening comments, in the four years from late 2012 we downsized by about 5,000 people. You cost a public 

service in defence, including on-costs, utilities and the like, at approximately $125,000 per person. So 5,000 

people is roughly $625 million, I think. I would say that we have not taken all of that out of the cost structure of 

the organisation and fed back into capability. But I would say we have taken between 400 and 450—around about 

$400 million—out of our cost structure. The remaining $125 million has probably fed back into outsourcing, et 

cetera. So there would be an element of that in the increase in contract numbers. 

Senator KIM CARR: Thank you for that. I will put a series of questions on notice to get a breakdown of the 

changes. That will cover the issue rather than go through that level of detail. The article reported that you were 

considering capping the amount of money Defence could spend on consultants after the numbers nearly doubled 

in less than a year. 

Mr Richardson: No, contractors nearly doubled. I did not say that consultants nearly doubled. 

Senator KIM CARR: So that was just a mistake by the reporter? 

Mr Richardson: Well, I did not talk to the reporter, so whoever spoke to the reporter made a mistake. 

Senator KIM CARR: They got it wrong. Okay. Is it the case that you are intending to cap the amount of 

money that is available for contractors? 

Mr Richardson: No, for consultants. We can control contractors through numbers. With consultants, the best 

way to control it is through money. The Defence committee took a decision earlier this week to reduce the money 

available to consultants from 1 July this year–that is, next financial year–by 10 per cent. 

Senator KIM CARR: About how much is that? 

Mr Richardson: I would need to take that on notice. 

Senator KIM CARR: Are there any further actions being taken in regard to consultants? 

Mr Richardson: We will control consultants through the allocation of monies. 

Senator KIM CARR: But the question of public service capability is a long-standing issue within the APS. Is 

it your view that the department's capabilities have been run-down where you actually have to employ consultants 

for work that has traditionally been done by public servants? 

Mr Richardson: There would be limited instances of that, but it is not systemic. 

Senator KIM CARR: What sort of instances? 

Mr Richardson: Clearly, if you reduce your workforce by over 22 per cent that does have an impact on what 

you can and cannot do. So inevitably there would be some instances where we would have engaged consultants 

where previously we might not have had to do so. 

Senator KIM CARR: It has been my experience in other portfolios that they have had a reduction in public 

service numbers and an increase in the number of consultants. Often the consultants fees are undertaken by expublic 

servants at higher rates. Is that the case in Defence? 



Mr Richardson: You get limited examples of that. But it is a furphy that a public servant walks out the door 

and a consultant walks in the door. That is simply a furphy. There are limited examples where we can point to that 

but, in general, that is not the case. 

Senator KIM CARR: Are there any provisions within your administrative framework that prevent public 

servants from actually doing that? 

Mr Richardson: No. 

Senator KIM CARR: None. There are no provisions to prevent it? 


Senator KIM CARR: Should there be? 

Mr Richardson: That is a matter for government and the Parliament. That would involve both APS and the 

ADF. 

Senator KIM CARR: Well, there are conflicts of interest provisions, for instance– 

Mr Richardson: There are. 

Senator KIM CARR: within the public service guidelines. 

Mr Richardson: We do have provisions relating to that. It is a really interesting issue and something that you 

grapple with as a matter of principle. Equally, if you have worked in the ADF for 25 or 30 years and that has been 

your total life's work and you then leave, are we going to deny that person an opportunity to get employment 

utilising the skills that they have developed? That will probably be in the Defence industry. There are conflicting 

principles here. 

Senator KIM CARR: There are recent cases I can tell you of in regards to the CSIRO, for instance, where 

people have walked out of very senior positions straight into companies working directly in areas for which that 

previous public servant was responsible. Do you have that situation in Defence? 

Mr Richardson: There have certainly been instances where people have left Defence and walked straight into 

areas which I would question. 

Senator KIM CARR: So what do you do under that circumstance? 

Mr Richardson: I simply note it. 

Senator KIM CARR: There is no other provision available to you as a secretary? 

Mr Richardson: There are some restrictions in place in certain areas in terms of what they can do. But there is 

considerable movement between Defence and the defence industry. There is a lot of movement backwards and 

forwards and it does raise a lot of issues, in my view. 

CHAIR: Can I ask you to pause there? 

Senator KIM CARR: Sure. I do have some follow-through on a couple of contracts specifically, if I could. 

CHAIR: You can come back to those. Senator Ludlam. 

Senator LUDLAM: I want to ask a couple of fairly high-level questions to begin with, which you might want 

to take on, Minister, if you feel like I'm straying into policy. I want to quote Michael Green, who is a former 

national security adviser to President Bush the younger. he said about new president Donald Trump: 

…we've never had a president come into office with such an unpredictable style of communication and with such alarm 

among our closest friends and allies. 

I'm interested to know how the department is managing the Trump administrations contradictory and, in my view, 

quite alarming statements? 

Mr Richardson: I can respond to that. I do not believe the current administration has been making 

contradictory and alarming statements. 

Senator LUDLAM: So we are going to war with China then? 

Mr Richardson: No, I do not believe the Trump administration has said we are going to war with China. 

Senator LUDLAM: What about Iran? 

Mr Richardson: I do not believe the Trump administration has said they are going to war with China. 

Senator LUDLAM: We must be reading different reports. Go ahead; I will let you answer. 

Mr Richardson: I think that is a matter of public record. I do not believe the Trump administration has said 

that it is going to war with either country. 



Senator LUDLAM: Mr Richardson, what is your view on torture? Do you believe that torture techniques like 

water boarding absolutely work, as stated by president Donald Trump? 

Mr Richardson: I will keep my views on such matters to myself. 

Senator LUDLAM: Okay. I will ask you a policy question rather than a personal view. What is Australian 

government policy on torture as it relates to Defence and intelligence? 

Mr Richardson: We do not utilise torture. 

Senator LUDLAM: Do we support our allies using it? 

Mr Richardson: As a general principle we are opposed to the use of torture. 

Senator LUDLAM: I am very glad to hear it, Mr Richardson. Has that view been communicated to our 

colleagues at a ministerial or a departmental level? 

Mr Richardson: To who? 

Senator LUDLAM: Either you to your counterpart in the United States government— 

Mr Richardson: Why? Why would we do that? 

Senator LUDLAM: We are not concerned that the Trump administration is reintroducing torture as a means 

of intelligence gathering? 

Mr Richardson: He has said no such thing. 

Senator LUDLAM: The US commander in chief has said that they are proposing to introduce things way 

worse than water boarding. 

Senator Payne: And you would know, Senator, if you were to canvass the entirety of the remarks in that 

context, that the president of the United States has also indicated that the Secretary of Defence's views on this 

matter are ones that he has taken on board. 

Senator LUDLAM: That is one of the contradictions I was referring to, Mr Richardson. 

Mr Richardson: No, the President was very clear. During the campaign the President spoke positively about 

water boarding and the like. As President, what he said—and I stand to be corrected—was that personally he did 

not have a problem with water boarding and the like. However, he has delegated that decision-making to the 

Secretary of Defence who is a decorated and highly respected military officer who was opposed to it and said he 

would not pursue such methods. I think Trump has been very clear on it. 

Senator Payne: And so has Secretary Mattis. 

Senator LUDLAM: He has been utterly contradictory, as I think you have just identified. He said one thing 

before the election and now you are pointing out that he said something quite different after. It’s okay; we will 

move on. 

CHAIR: Different interpretations, Senator Ludlam. 

Senator LUDLAM: Certainly, it is an interpretation. Will Australia continue to use intelligence sourced from 

the United States under the five eyes agreement if that intelligence was obtained through torture? 

Mr Richardson: We do not know how the intelligence is obtained. We intelligence share with the US and it 

saves Australian lives. We value the intelligence that the US shares with us. 

Senator LUDLAM: Do we do any due diligence or will we in future, since this issue has been raised? 


Senator LUDLAM: So we do not mind whether it was obtained through torture or not? 

Mr Richardson: Is not a question of that. 

Senator LUDLAM: No, it is now. 

Mr Richardson: We share intelligence. We have long-standing arrangements and the national interest is 

served by it. And Australian lives have been saved because of it. 

Senator LUDLAM: Is our national interest served if we are implicated in torture as an intelligence gathering 

technique? 

Mr Richardson: Our national interest is served by the intelligence sharing arrangements we have with the 

United States. 

Senator LUDLAM: You did not answer my question. 

Mr Richardson: I have answered it as far as I going to. 



Senator LUDLAM: Interesting. Does the Australian government support the US in its alleged proposal to 

bring back the use of black sites, where torture has been carried out in the past, operated by the CIA? 

Mr Richardson: I am simply not aware that that is the intention of the US administration. 

Senator LUDLAM: The New York Times obtained a draft executive order drafted by the Trump 

administration. I might obtain that and table it for you and then we can go into a bit more detail. 

Mr Richardson: I would simply note, Senator, that the administration subsequently denied—and whether it 

was right or I don’t know—that there was such a draft administrative order. So you are going to present an article 

from the New York Times which the administration has already denied. So there is nothing that I am going to be 

able to do with the article that you give to me. 

Senator LUDLAM: I won't bother, then. Secretary of State, Mr Rex Tillerson, has likened China's artificial 

island building to Russia's taking of Crimea. Does the government agree with his perspective? 

Mr Richardson: On what occasion are you quoting him, Senator. 

Senator LUDLAM: I think it was during his confirmation hearings, but I can double check if you like. 

Mr Richardson: Okay. Since then, Sean Spicer, the White House Press Secretary, has made statements. Mr 

Tillerson himself has made statements and Secretary of Defence General Mattis has made statements. Indeed, 

recently, when he was visiting Korea and Japan. I would simply leave it at that. To go back to something that the 

Secretary of State in answer to a question nine hours into a confirmation hearing is very selective when the 

Secretary of State has since said a range of other things, as has the administration, both through the White House 

and the Secretary of Defence. 

Senator LUDLAM: Are you guys having trouble establishing what US government policy is? 

Mr Richardson: Not at all. 

Senator Payne: None whatsoever. Both the Minister for Foreign Affairs and I have met with our counterparts 

in recent weeks. I have met with Secretary Mattis at NATO headquarters in Brussels. Foreign Minister Bishop 

met with Secretary Tillerson, the Vice President and the National Security Adviser in Washington last week. 

There is absolutely no trouble whatsoever. 

Senator LUDLAM: That is fascinating. President Trump has said the United States, ‘must greatly strengthen 

and expand its nuclear capability until such time as the world comes to its senses regarding nukes.’ I believe that 

quote dates to before he took office. He also said, ‘Let it be an arms race.’ Does the department or the minister, if 

you wish, agree with this strategy to make the world a safer place? 

Senator Payne: You can select as many statements of the President before, during and after the campaign 

process, the inauguration of whatever that might be. But I do not think it is constructive at all of us to be asked to 

comment on each of those and we are not going to. 

Senator LUDLAM: This relates directly to Australian military doctrine. Does the Australian government 

support a nuclear weapons build up? 

Senator Payne: The Australian government's position on nuclear non-proliferation and our views in relation 

to nuclear activities in the region, particularly recently the DPRK, are very clear. You know what they are. I am 

not going to sit here and engage in a statement by a statement commentary on those that you selectively choose 

from during a campaign, part of a campaign or anything like that. 

Senator LUDLAM: Is that because there is no point in putting any stock in stuff that comes out of this fella's 

mouth? Why we would need not be able to reflect on what our closest ally and security partners policy or changes 

in doctrine– 

Senator Payne: I will happily speak to you about government to government engagement, which we have 

been pursuing since the inauguration and confirmation– 

Senator LUDLAM: But not anything regarding the President’s weird outbursts? 

Senator Payne: It could take a very long time. 

Senator LUDLAM: That is true. 

Senator Payne: I know that your colleagues love you very much and are very tolerant, but I am not sure that 

they want to listen to all of that for as many hours as you wish to pursue it. 

Senator LUDLAM: I will let them speak for themselves. Although I appreciate the sentiment. 

Mr Richardson: With due respect, your characterisation of the Trump administration's comments are highly 

selective and, by any objective standard, are misleading. To pick out one statement that was made over a month 



ago when there has been a range of other statements since that have been consistent and clear, and US policy is 

clear, is selective to say the least. 

Senator LUDLAM: You guys are doing an amazing job of making this fella sound sane. That was a 

comment, not a question. 

CHAIR: Thank you, Senator Ludlam. We will pause there. 

Senator KITCHING: Unlike Senator Ludlam, I’m not going to question what I consider the vital nature of 

the US Australia alliance. However, I would like to ask about the delegation that was sent to Washington on 8 

February. I am referencing an ABC report. I noticed Lieutenant General Campbell is in the room. CDF, can I ask, 

did the Lieutenant General Campbell lead that delegation? 

Air Chief Marshal Binskin: No. 

Senator KITCHING: Who led the delegation? 

Air Chief Marshal Binskin: It is an issue for the Department of Immigration and Border Protection. I am not 

sure. I think it was the secretary. But not this secretary. 

Senator KITCHING: No. Who made up the delegation? 

Air Chief Marshal Binskin: That will be a question from them. I was asked by the secretary for Lieutenant 

General Campbell's to be able to participate because of a personal issue of the commander of JTF-HD, the Joint 

Task Force for Homeland Defense, at the time. Lieutenant General Campbell had been the previous commander 

to JTF-HD. He had the experience and the knowledge to be able to provide one aspect of the details that were 

required for those meetings. 

Senator KITCHING: So he was making those representations. What I am really asking— 

Air Chief Marshal Binskin: If you just ask straight I can give you the answer. 

Senator KITCHING: Obviously we have a mission there. I'm wondering why our ambassador to the US, 

Ambassador Hockey, was not able to make those representations on Australia's behalf. 

Senator Payne: The government makes its own decisions about government to government representations. 

That is not at all surprising. 

Air Chief Marshal Binskin: It is not unusual for teams to go to any of the nations to talk about any of the 

issues. We always have delegations moving in an out of our major partner nations to talk about a variety of issues. 

Senator Payne: And that has worked right across government. 

Senator KITCHING: Have there been other ambassadors to the US who may well have been able to make 

those representations Ambassador Hockey, appointed by the current Prime Minister, was not able to make those 

representations. 

Air Chief Marshal Binskin: Not at all. 

Senator Payne: That is a completely spurious observation. 

Mr Richardson: As a former ambassador to Washington, I might note that delegations from Australia to the 

United States on matters like that is not unusual. Perhaps it does reflect on the ambassador. Perhaps I need to 

rethink the job I did there. But certainly, on both sides of politics, it is a very common thing to do. 

Senator KITCHING: There is a proposal for a movie showcasing the Australian US military relationship and 

it is due to air on 4 July 2018. Are you aware of that? 

Senator Payne: 100 Years of Mateship, yes. 

Senator KITCHING: So you are aware of that, Minister? 

Senator Payne: In the broad, yes. I am not in it! 

Senator KITCHING: Do you feel that Ambassador Hockey is concentrating on those types of issues rather 

than on serious policy issues? 

Senator Payne: What I feel, Senator, is that if you have questions that relate to the role of the representative 

of the government in Washington, they are matters for that Department of Foreign Affairs and Trade, just for 

starters. But secondly, I think Ambassador Hockey is doing an exceptional job in Washington. 

Senator KITCHING: I think Mr Richardson you said that the force posture cost sharing agreement in relation 

to Northern Australia was settled recently. Was that discussed at the meeting on 8 February? 

Senator Payne: It was settled in October last year. It is not part of the considerations of the meetings in 

February you have referred to. 



Senator KITCHING: Thank you. 

CHAIR: Senator Hinch. 

Senator HINCH: I have a question for the minister on disposal of Defence department property. The old 

repatriations building at 310 St Kilda Road is up for sale. Are you aware of that and where is it at the moment? 

Senator Payne: I am. Could I ask the deputy secretary of the state and infrastructure group to come to the 

table? 

Senator HINCH: According to the website it says that the site is located within the Victoria Barracks foot 

print. It is across the road from the shrine. It was built in 1937 as a repatriations commission outpatient clinic for 

World War I veterans. When are you expecting the salver to go through? 

Mr Grzeskowiak: That is right. We have been looking at options for the disposal of this site for some while. 

It is built right on the edge of Victoria Barracks. The main entrance is actually off of the main road, rather than 

from inside the barracks. It has been disused for quite a long time. 

Senator HINCH: Twenty years, yes. 

Mr Grzeskowiak: Inside its condition is fairly derelict. We do not have a timeline for sale at the moment. A 

range of people have expressed interest. We are currently in discussions with some of those people, including the 

Victorian government. They now have an interest. So we are just allowing those discussions to move forward 

before we decide on the final– 

Senator HINCH: You say that there is no timeline, but on the sales brochure it says ‘Defence has completed 

its due diligence on the site. Defence anticipates divesting the site in 2017.’ 

Mr Grzeskowiak: Yes, we would hope to be able to conclude a deal later this year. Another angle of interest 

has popped up that we are just running to ground at the moment. We will work through that and then go to 

market, if that is appropriate, following the conclusion of those. 

Senator HINCH: Are you aware, minister, that the Australian National Veterans Arts Museum has been in 

negotiations and talks with the Lord Mayor of Melbourne, Mr Doyle, with Premier Andrews and with Brendan 

Nelson from the War Memorial for the past three years? 

Senator Payne: I am aware of ANVAMs interest and engagement, yes. 

Senator HINCH: What prompted this sudden decision now to try and sell it, and sell it to private people? You 

have a real estate agent getting involved. And you are selling it privately, when there are these negotiations with a 

genuine group of veterans. It will help veterans who are suiciding at a terrible rate. It will help them. Surely, 

wouldn't you keep that negotiation going first? 

Mr Grzeskowiak: That is what we are currently doing. There has been another avenue to that negotiation. We 

are giving that time to play through to see if that can form a deal. You rightly say we have been talking to this 

veterans groups for some three years. They have not been able to put together a proposal that would see them 

being able to take over that site successfully at this time. If that were to occur, then that would obviously be a 

consideration. 

Senator HINCH: Have you looked at an off market sale? 

Mr Grzeskowiak: The nature of the discussions we will be having at the moment could lead to an off market 

sale, but there has to be a credible purchaser. Off market sales generally go to state and territory governments. So 

there would have to be a credible purchase agreement. 

Senator HINCH: For an off market sale to happen, that would have to be approved and go through the 

Minister for Finance, Senator Coleman, correct? 

Mr Grzeskowiak: That is the normal process for off market sales. 

Senator HINCH: Has he been approached about an off market sale? 

Mr Grzeskowiak: Not yet, because we have not had a proposal that would be a credible off market sale. 

Senator HINCH: For three years they have been talking about peppercorn rents and 99 year lease and all this 

sort of stuff. We talk about veterans and how important artwork is. There is a famous quote from Weary Dunlop 

about how important art is for veterans. And you haven't even talked to the Minister for Finance yet? 

Mr Grzeskowiak: There is not a proposal on the table that we could credibly take to government for 

proposing an off market sale at this time. 

Senator HINCH: Are you aware that there is a heritage listing on this property? 

Mr Grzeskowiak: There is. 



Senator HINCH: Minister, knowing your interest in veterans’ affairs, knowing the crisis with suicides with 

vets and the importance of art with veterans, would you prefer an off-market sale, if it could be negotiated? 

Senator Payne: I am not sure you want me managing each divestment of the estate of the Department of 

Defence by my personal preference. I am not sure that would be a particularly rigorous approach. I am taking 

advice from estate and infrastructure group from the department. I know that Mr Grzeskowiak and his staff have 

been working closely with the proponents and with the Victorian state government to look at what the options are. 

As he has said, there is not yet a proposition put to government which is within the Commonwealth guidelines— 

how we deal with estate and spend the Commonwealth's money—that we are able to yet advance to the Minister 

of Finance. Knowing your interest, I would be very happy to talk about this further. 

Senator HINCH: One final question. It has been empty for 20 years. They are now saying you want to get it 

sold in 2017. Is there anything political in this? Before the election last year the federal Labor Party, the 

opposition, made it one of their policies to try and sell it and get it done for the veterans art group. I think they 

even offered $10 million towards it. Is there any connection here? 

Senator Payne: Not that I am aware of. In fact, I would say that in relation to all disposal matters they are 

done in the appropriate way according to the way the estate market operates and the way the finance guidelines 

require us to operate and not with any political considerations. 

CHAIR: Thank you. That is a good spot for us to suspend for 15 minutes for morning tea. 

Proceedings suspended from 10:31 to 10:45 

Senator MOORE: Mr Richardson, I think this is a question for you. I am following up with various 

departments about the role that they are playing in the government's response of the sustainable development 

goals. I want to know whether your department is involved in the very large inter-departmental committee that 

has been set up by PM&C and DFAT, which is pulling together the whole cross-government response. I want to 

know whether Defence is part of that. 

Mr Richardson: I am sorry. I do not know the answer to that. Is that domestically oriented? 

Senator MOORE: It is both. That is why I would have thought your department would have had a role. 

Mr Richardson: If it is domestically orientated, it could be that the estate and infrastructure area is involved. 

Senator MOORE: I am happy to put it on notice, Mr Richardson. My understanding is that they have two 

committees at the deputy secretary level. Particularly with the wide ranging role of Defence, that would be great. 

Minister, I am not sure whether this is for you. I am particularly interested in the arrangements with Sudan. I think 

it would be easier rather than taking up the time of the committee to ask whether I get a briefing on— 

Senator Payne: On our engagement in South Sudan? 

Senator MOORE: I am looking at DFAT as well. 

Senator Payne: Of course. I will arrange that. 

Senator MOORE: Thank you. 

Senator KIM CARR: If I could return to the issue of contractors and consultants. Secretary, can you provide 

me with some advice as to the number of engineers currently working under Future Submarines Technical Office 

in Adelaide? 

Mr Richardson: We have the general manager of submarines here. He can come to the table. He will be here 

in a minute. 

Senator KIM CARR: I will go to another question. 

Senator Payne: If we do not have the exact numbers with us, then we will obviously take them on notice for 

you. 

Senator KIM CARR: I accept that some of these questions do require further advice. I am not concerned 

about that. 

Senator Payne: Thank you. 

Senator KIM CARR: On the Serco contracts, Austender documents indicate to me that there have been 121 

separate contracts with Serco with the Department of Defence. Is that correct? 

Mr Richardson: I think Deputy Secretary Estate and Infrastructure is the person for that. 

Mr Grzeskowiak: From the estate and infrastructure perspective, we certainly used to have contracts with 

Serco Sodexo Defence Services. But when we retendered the majority of our base service contracts that were 

replaced two years ago, Serco Sodexo Defence Services were not successful in that process. 



Senator KIM CARR: So they are no longer— 

Mr Grzeskowiak: In the estate space. 

Mr Richardson: However, there may be some within capability. 

Mr Gillis: Yes, Serco has had a number of contracts with my group but most of those are finishing by the 

middle of 2017. They are related to sustainment of Armidale class patrol boats and a number of smaller contracts. 

That work will finalise by the middle of this year. 

Senator KIM CARR: I see. My reading of it was that they had $320 million worth of contract work. Is that 

the sort of number— 

Mr Gillis: They did have a large number of contracts, but most of those will be finalising. 

Air Chief Marshal Binskin: There is a little bit more to the story in another part of Defence. The Vice Chief 

can add to the numbers. 

Senator KIM CARR: I appreciate that. It is very good of you. Thank you. 

Vice Adm. Griggs: Serco manage the retail end of our clothing stores to Defence members. I think that 

contract is in the order of about $30 million. That was in the list of contracts that were provided to Iraq. 

Senator KIM CARR: Has there been any connection that fed your concerns with Serco in regard to the use of 

consultants through that process? 

Mr Richardson: Nothing has been brought to my attention. 

Senator KIM CARR: I might turn to the Aurecon tenders. There are 140 contracts with Aurecon Australasia. 

Is that correct? 

Mr Gillis: I am not aware of that. We will have to take that on notice. Even within my group we sign in 

excess of 16,000 contracts a year. To ask for a specific company and the breakdown, a lot of these companies do 

work across groups and across the whole of Defence. As you have seen with Serco they are working in the VCDF 

area, they are working in the estate area and they are working in my area. We are happy to take that on notice and 

get you a whole-of-Defence response. 

Senator KIM CARR: The Serco one was the 121 separate contracts from January 2016. It is an extraordinary 

number. As you say, they are now coming to an end. Was that part of the downsizing arrangements? 

Vice Adm. Griggs: There were issues in regards to Serco's performance with some of the contracts we had, 

especially in support of the Armidale class patrol boats. So we have agreed to separate that contract and to 

terminate that. We will be doing that and that finishes at the middle of this year. 

Senator KIM CARR: What were the issues? 

Vice Adm. Griggs: They related to their performance. The availability and their inability to meet the KPIs for 

the availability of the Armidale class patrol boats. 

Senator KIM CARR: We will come back to that. There might be more questions later in the day. 

Mr Richardson: Senator, Mr Johnson is here if you want to go back to the naval architect. 

Senator KIM CARR: Yes, please. 

Mr Johnson: Defence has approximately six qualified naval architects working within the submarine group, 

though six architects are shared between the Future Submarine program and the Collins sustainment work. The 

need for naval architects and other submarine technical specialties including structural engineers and mechanical 

engineers is increasing as the design work for the Future Submarine program begins. A recruitment action is 

already underway to engage more naval architects and structural engineers. We do have a seventh person, who is 

an intern, but I do not think they would qualify in the context of your question. We have an intern, a recent 

graduate, who is working at ASC. 

Senator KIM CARR: So there are six naval architects. Are they all contractors or are they employed through 

the APS? 

Mr Johnson: I think technically they are contractors. They are working on behalf of the government. I can 

give you a more precise answer if I can take that on notice. 

Senator KIM CARR: Thank you. In regard to the cost of these, it has been put to me that the reported cost is 

about $25 million per annum. Would that be an accurate reflection of the cost? 

Mr Johnson: The cost for what? 

Senator KIM CARR: These particular contractors through the technical office. 



Senator Payne: Rather than guessing at that, I think I will take it on notice. 

Mr Richardson: And I can certainly say it would not be $25 million for six naval architects—no way. 

Senator KIM CARR: I was surprised when I saw the figure, but you are saying that it cannot be right. So 

what is the cost and what do the costs relate to? Is it the cost for travel? What is the nature of the costs? 

Senator Payne: We will provide you with a detailed response on notice. 

Senator KIM CARR: Thank you. You will also tell me if the APS could actually employ them? 

Mr Johnson: Yes. 

Mr Richardson: As a general rule, we have headspace within Defence APS. We have allowed headspace for 

growth in the submarine and shipbuilding area. If there is a need for the submarine area to employ naval architects 

as public servants, then we can do that. We have no preference for contractors over public servants when it comes 

to naval architects. 

Senator KIM CARR: I would have thought it was a capability that the defence department could actually 

use. If I can return to the Aurecon contracts. I am told that there are 140 of them worth $33 million. Many of these 

contracts actually refer to project management. Is that the case? 

Mr Gillis: I will have to take that on notice. 

Senator KIM CARR: If you could. I would be interested in how many of the staff involved in that are 

Aurecon staff, departmental staff or ADF staff. What is the breakdown in terms of those arrangements? Can you 

provide this advice now? 

Mr Grzeskowiak: As Mr Gillis said earlier, Aurecon, a big engineering capable company, is used across 

Defence. Certainly in my world of estate and infrastructure, we use them in their capacity as an engineering 

management company for some of our infrastructure projects. If we are looking for a response from the 

department it will be a cross-departmental response. 

Senator KIM CARR: Are they operating out of defence department facilities? 

Mr Grzeskowiak: I do not actually know. That could happen from time to time. But most of the time they 

would be, I think, operating from their own offices or indeed on sites. 

Senator KIM CARR: Can you take that on notice? 

Mr Grzeskowiak: Yes. 

Senator KIM CARR: Is this work that could be done by APS personnel? 

Mr Grzeskowiak: In my world we very much rely on the construction industry for their skills and expertise 

not just for physically building sites but also for the design and project management of that work. For a long time 

now we have operated a highly leveraged model, highly outsourced, into the industry that we work with and we 

rely on their skills. 

Senator KIM CARR: There have been questions raised in regard to the capabilities of the department in 

regard to media monitoring. Secretary, there is an annual contract for media monitoring service worth $1.1 

million. I can give you a contract number, if you like. I will ask you questions in regard to capabilities here. It is 

not that there is a question about the fact that there is media monitoring. In question on notice No. 509, the 

department says the cost of media monitoring from 1 January 2016 to 31 October 2016 was $775,000. First of all, 

is there a new contract arrangement being put in place in that regard? 

Mr Richardson: No, there has been no new contract. 

Senator KIM CARR: On 6 September 2016 the department notified a new annual contract monitoring 

service worth $1.1 million. 

Mr Richardson: That was a contract extension. 

Senator KIM CARR: I see. That probably accounts for that. Why has there been an increase in the cost, then, 

if it is a contract extension? 

Ms McCrane: We extended the contract and the scope and services provided under that contract. We engaged 

more media monitoring, particularly in electronic format media, such as social media. 

Senator KIM CARR: I see. So there is an increased range, is there, of activities required? 

Ms McCrane: Yes. 

Senator KIM CARR: Who receives these services? 

Mr Richardson: Government, opposition, people across the ADF and the APS in Defence. 



Senator KIM CARR: That has not changed? 


Senator KIM CARR: The policy position has not changed—it has been the same for some years now? 

Mr Richardson: It has. The opposition has been receiving media monitoring since approximately 1972. 

Senator KIM CARR: That is right. And, unlike other departments, there has not been an issue here with the 

defence department. 

Senator Payne: It was in hard copy at that stage. 

Senator KIM CARR: It has been a longstanding controversy in some departments, but not in this 

department? 

Mr Richardson: In fact, Senator, I take a personal interest in it because I personally did the very first one of 

these ever in the Australian government in the Department of Foreign Affairs. It was introduced in 1972 and it has 

expanded since then. I am very fond of it. 

CHAIR: So have the forms of media that we receive, Mr Richardson. 

Senator KIM CARR: Minister, how many media advisers do you have in your office? 

Senator Payne: Two. 

Senator KIM CARR: Can you provide us with advice on what levels of classification they are at? 

Senator Payne: I will provide that on notice, yes. 

Senator KIM CARR: How many media advisers does Minister Pyne have? 

Senator Payne: I will provide that on notice. 

Senator KIM CARR: Again, can you provide level and classification? 

Senator Payne: Yes. 

Senator KIM CARR: And Assistant Minister Tehan? 

Senator Payne: It is Minister Tehan—he is Minister for Defence Personnel. 

Senator KIM CARR: My apologies. Can you provide classification and levels for them? 


Senator KIM CARR: Is it the same as they had for [inaudible] as well? 

Senator Payne: No, I do not believe so, but I will check that. 

Senator KIM CARR: Has there been any increase in the value relating to the numbers of media advisers 

meeting in ministerial offices? 

Senator Payne: Increase in the value? 

Senator KIM CARR: The value in the contracts. 

Senator Payne: They are very valuable people, if that is what you mean. 

Senator KIM CARR: They are—in terms of cost to service those people. 

Senator Payne: Not that I am aware of, Senator. 

Senator KIM CARR: Can we have the costs of the operations of those offices, please? 


Senator KIM CARR: There is a question that has arisen in regard to the communications branch. I am 

wondering if you can tell me what the staffing levels are of the communications branch in the department. 

Mr Richardson: I would need to take that on notice. 

Senator KIM CARR: Has there been any change since 1 July? 

Mr Richardson: Since 1 July this year? No. 

Senator KIM CARR: Is it the case in this department that the communications branch is part of the executive 

coordination unit or are they a separate bunch? 

Mr Richardson: It is part of—it is a branch within Ms Crome's division, which is called Ministerial and 

Executive Coordination and Communication. 

Senator KIM CARR: Can I have the numbers, please? 

Mr Richardson: Sure. 



Senator KIM CARR: I just want to make sure I get the right designation. In regard to the Defence media, the 

department has a separate unit entirely for Defence media? 

Mr Richardson: We have a communications branch and there are some media advisers elsewhere in the 

organisation. 

Senator KIM CARR: How many are there? 

Mr Richardson: I will need to take that on notice. 

Senator KIM CARR: Has there been any assessment of the length of time it takes to respond to a media 

inquiry? 

Mr Richardson: Yes. 

Senator KIM CARR: What has been the result of that inquiry? 

Mr Richardson: I get a weekly printout of all media inquiries which are outstanding as of that week. Most 

media inquiries are handled expeditiously. However, there are some which take an inordinate amount of time to 

answer. 

Senator KIM CARR: Has there been any change in the length of time it takes to respond? 

Mr Richardson: I think we have improved over the last 12 months, but I am quite certain you would be able 

to talk to some journalists who would have had pretty unsatisfactory experiences in the last few months. 

Senator KIM CARR: It is not unusual to have a conversation of that type with journalists. I am wondering if 

you have done any assessment of the claim? 

Mr Richardson: No. I am very conscious of it, because it was precisely because of concerns expressed by 

some journalists that I asked to get a weekly printout of all outstanding— 

Senator KIM CARR: I see—that is what led you to this thinking? 

Mr Richardson: Yes, that is what led to— 

Senator KIM CARR: And your suggestion to us is that the evidence is not there to sustain the claim? 

Mr Richardson: No, the performance is mixed. Most inquiries are answered expeditiously; others are not. I 

think our performance as a department in responding to media inquiries is mixed. 

Senator Payne: Similarly, I would observe and I think you might agree, Senator Carr, that most inquiries are 

reasonable and others are not in terms of the expectation from members of the media from time to time. Most are 

reasonable; some are not. 

Senator KIM CARR: That is often a highly subjective assessment, though, isn't it. Is there an assessment of 

the proportion of responses that need to be cleared by ministerial offices? 

Mr Richardson: Basically, the rule of thumb is that, in respect of most media inquiries, we do ensure that 

there is consistency with the minister's office. I think that is standard practice across any sensible government. 

Where the media is asking to interview an individual, I am involved in that and I always ensure that the minister's 

office is comfortable with that. 

Senator KIM CARR: Again, it is not unusual practice across governments, I would have thought. 


Senator KIM CARR: Has there been any—have you noticed any change in the amount of time it takes to get 

a clearance from ministerial offices? 

Mr Richardson: No, I myself have not. I think it is fair to say that the minister's office is pretty good at 

responding promptly. 

Senator KIM CARR: I want to go to this issue because there are substantive policy questions that arise from 

this. It is not just a question of whether or not journalists are happy with the treatment they get. It relates 

specifically to another aspect of the communications work and that is in regard to correspondence, which then can 

blow up into significant matters of public interest. Do you have a target time on the response to ministerial 

correspondence? In terms of responding, how long does it take? How does that work? 

Mr Richardson: We do. Ms Crome will respond. 

Ms Crome: Routine correspondence we seek to turn around within 10 business days. 

Senator KIM CARR: What do you regard as routine? 

Ms Crome: General correspondence from members of the public on routine matters. I am sorry; it is a bit 

vague. 



Senator KIM CARR: What about non-routine? What is the benchmark there? 

Ms Crome: It will depend on the issue. If it is identified as urgent correspondence, we will seek to turn it 

around within 24 to 48 hours. 

Senator KIM CARR: Are you able to tell me how often you have met the targets? 

Ms Crome: I would have to take that one on notice. 

Senator KIM CARR: Is there any noticeable departure from the targets? 

Ms Crome: Not to my knowledge, but I would prefer to take that on notice. 

Senator KIM CARR: How many items of correspondence do you receive? 

Ms Crome: Thousands. 

Senator KIM CARR: I would expect would be the case. However, is there a process in place for the 

monitoring of correspondence in terms of determining which category a correspondence matter would fit into? 

Ms Crome: We work with the ministers offices in relation to correspondence and line areas across the 

department to help determine what categories it might sit in. Then all correspondence is captured through our 

electronic system. 

Senator KIM CARR: So there is a log. I presume a DLO talks to ministerial advisers. Is that what happens? 

Ms Crome: That is correct. 

Senator KIM CARR: You would identify that there is a problem if an item of correspondence is in the 

ministerial office for too long? 

Ms Crome: We seek to look at correspondence with the department and track responsiveness from the 

department's perspective. Then we work with the DLOs if we receive feedback that something might need to be 

addressed. 

Senator KIM CARR: I used to always encourage the department in my time to actually tell me if there was a 

bit of correspondence sitting on an adviser's desk for too long. Do you do that? 

Ms Crome: Yes, we will go in to the DLOs if we believe there is something that we have not seen returned to 

the department. 

Senator KIM CARR: Let us take the recent case of the dispute with the Indonesians over the training 

program in Western Australia. You can correct me where I am wrong. I am told that correspondence was received 

from a General Gatot, who, it is put to me, is a friend of Australia and known to be very friendly with Australia 

and who raised concerns with the minister in regard to the training program in Western Australia. Did that occur? 

Air Chief Marshal Binskin: No. 

Senator KIM CARR: It did not happen? 

Air Chief Marshal Binskin: No. The process that we went through to understand the issue that we had, which 

took a little bit of time, was initially through post in Jakarta and our defence attache talking to myself and the 

Chief of Army. 

Senator KIM CARR: So the general did not write to an Australian minister in November of last year? 

Air Chief Marshal Binskin: I will check, but I do not believe that Panglima, who is the Chief of Defence 

over there, ever wrote to the minister. He wrote to me in response to a letter I wrote to him. 

Senator KIM CARR: This is General Gatok. 

Air Chief Marshal Binskin: Nurmantyo. 'Panglima' is his Indonesian title. 

Senator KIM CARR: My apologies. 

Air Chief Marshal Binskin: No, that is all right. 

Senator KIM CARR: So you are saying it did not happen? 

Air Chief Marshal Binskin: No, he wrote to me in response to a letter I had written to him when it became 

apparent that we had had an issue with the language training in WA. I will get the exact dates of the 

correspondence, but that was the general flow. On 24 November the head of Australian Defence staff in Jakarta 

was advised by a commander of the Indonesian armed forces assistance for intelligence that we had had this issue 

that has been widely publicised. It had come to our attention just in the couple of days before that we had had an 

issue, so on 23 November I had written to Panglima, my counterpart. On 24 November the Chief of Army had 

signed a letter to his counterpart in Indonesia. On 9 December Panglima signed a letter to me acknowledging my 

23 November letter. Then the correspondence went backwards and forwards. There were a couple of other 



correspondence—Chief of Army to his counterpart. But that was the initial correspondence trail in this. Then 

there were discussions through post with the Indonesian armed forces just a bit more on the cooperation and those 

specific areas. 

Senator KIM CARR: Why did it take so long to resolve this matter? 

Air Chief Marshal Binskin: First of all, we had to do the investigation or the inquiry, which was quite 

detailed in this. We had an initial idea of what the issues were, but we needed to get to the bottom of that. Then, 

because there were potentially affected people, there is a legal process we need to go through as well, which we 

kept tight. But it took a couple of weeks to get that through over the Christmas period and into the new year. It 

was as tight as it could be. Then we did provide updates to the Indonesians. On 16 December the Chief of Army 

sent an update to his Indonesian counterpart and then back on 11 January I signed a letter that provided an update 

to the commander of Indonesian armed forces, Panglima, on the progress as well. So we were talking to the 

Indonesians throughout this. 

Senator KIM CARR: Minister, your intervention came much later? 

Senator Payne: Yes, in terms of the public engagement. I think I held a small media conference in early 

January. It was at the end of the first week of January if I recall correctly. I communicated by letter with my 

colleague Minister Ryamizard. I spoke to him by telephone as well and I wrote to him again a second time. I did 

that, of course, in consultation and coordination and with the engagement of the senior leadership of the ADF. 

Senator KIM CARR: So at no point were you contacted directly by the Indonesian— 

Senator Payne: No, Senator. I am as sure as I can be in here, without going back to my office to check the 

records, that I did not directly receive a letter from the general. In fact, that would not be normal. 

Senator KIM CARR: And you are satisfied that the downsizing has not left you underserviced in regard to 

support from the department in any of these areas? 

Senator Payne: Yes—I have no critical observations to make in that regard. We work very closely together. 

The process is as the CDF has set it out. 

Senator KIM CARR: I will come back on that. 

Senator FAWCETT: Can I just ask a couple of questions on workforce. Secretary, you may be able to 

answer the first one. I know you made some comments on civilian workforce. This is going back again to the 

portfolio budget statement. There was an expectation that the workforce would stabilise at around 18,200 from 

2016 to 2017. I am just wondering if you could give us—if I missed that before, can you just refresh me? 

Mr Richardson: Yes. We have a ceiling of Defence APS of 18,200. We are currently at about 17,300. As I 

mentioned, we are building back to the 18,200. The reason we took it well below that is that we need a different 

workforce mix, particularly in shipbuilding and in cyber. 

Senator FAWCETT: I guess that was my next question in terms of your workforce plan—identifying the 

gaps where you need to grow capability or competence as you reach that 18,200. Are there any areas where you 

have significant gaps? Are the cyber and shipbuilding the only two or are there other areas? 

Mr Richardson: Under the white paper, as part of the white paper, the government outlined its plans in 

respect of growing the cyber and cybersecurity workforce. That is in place. 

Senator FAWCETT: Can I take it from that that the effort that you have talked about in previous estimates— 

to actually go across and essentially do a job description for each of the roles so you have a baseline of where 

your skills requirements are and where your skills assets are—is complete now? 

Mr Richardson: We have done most of that. There are still some gaps, but we have done most of it. 

Senator FAWCETT: On the ADF workforce, the comment in the PBS was that it was under the funded 

strength when the funded strength was 59,209. But now the workforce would grow to 62,400. I am just wanting to 

get an indication as to—it is early in that period, but are we on track to move toward that 62,400? 

Air Chief Marshal Binskin: I will get the exact details, but a lot of that growth is in relation to projects that 

come online as well and then also some growth in our cyber workforce. I can get you an update offline on that. I 

will take it on notice. 

Senator FAWCETT: I also have the same question I asked the secretary in terms of analysing where the 

actual skills requirement is versus an audit of where your skills capability currently sits and closing the gaps. Can 

we get an update on that as well? 



Air Chief Marshal Binskin: Okay. You remember from the white paper that there was a reinvestment of a 

number as well, where we did need to reskill to move them into new areas. That obviously will take a longer 

period as well. 

Senator FAWCETT: As you well know, CDF, I am always concerned when we have good policy 

announcements to make sure that, in the subsequent years, things are actually followed through and delivered as 

opposed to everyone just moving on from those announcements. 

Air Chief Marshal Binskin: As am I, Senator. 

Senator FAWCETT: Can I move on to the Coles and Rizzo reports. I am keen to understand—I have raised 

this with Chief of Navy previously. I wanted to see whether we have actually closed out all recommendations that 

were made by Mr Rizzo. 

Mr Richardson: While the Chief of Navy is getting ready, the answer to the number of nations in the Global 

Coalition against Daesh is 68. I will not read them all out—we will be here until lunchtime. I will just provide that 

to the secretariat. 

Senator Payne: That includes the number of entities—the African Union, NATO et cetera. 

Senator FARRELL: You mentioned a figure of 64, was it? 

Senator Payne: I said the counter-ISIL ministers' meeting at its last occasion in Brussels had 35 around the 

table. 

Vice Admiral Barrett: Your question was around Rizzo. I will put some context around that if I may. It was a 

program that looked at restoring technical integrity and naval engineering reform following some incidents within 

the surface fleet some time ago. The program finished or was closed in November 2014. I asked for a review 12 

months later to see how we were going. There were 24 recommendations; 22 were closed at that time. There were 

two that remained open. One of those is to prove that we are making whole of life decisions. We made a 

conscious decision at that time to say that we will tie it to a new project so that we can see all elements are being 

done. That has been tied to the new OPV project SEA 1180. That will remain open for some time as we go 

through that. 

The second open recommendation was around resourcing to make sure that the numbers that were needed to 

fill those engineering positions were actually put in place. That does relate to the conversation you just had with 

the secretary about white paper figures and about numbers. There are places within the white paper specifically 

for Rizzo to be able to increase the level of engineering and technical ability with Navy, both uniform and APS. 

There are positions established over the next five years, increasing in number up to about 409 over the next five 

years. It is tied up in line with shipbuilding as well. Rizzo also asked for about four other factors that were being 

looked at. It was the completion and reform of the naval engineering branch. That included establishing the 

Defence seaworthiness regime. I would contest that that has been done. The Defence seaworthiness manual has 

been approved and is promulgated. It defines the system under which we will now manage seaworthiness. It 

required the establishment of the Naval Technical Bureau. That has been completed. That now resides within 

Navy but is closely aligned with CASG. 

I will use one example. There are actually 12 naval architects within the Naval Technical Bureau, some of 

which are lent to CASG, including submarine skills when required in that design side. The other piece was to 

establish within each of the areas and the force commands that manage particular ship fleet types. That was to 

reaffirm the engineering quality of advice and to ensure seaworthiness at the SPO and group level. That has been 

put in place. An engineering regime is in place for those and it is working. The fourth one was to establish a 

regime of talent management for future engineering practice. That included things like outsourcing to companies, 

re-establishing training at the early parts of an engineer's career but also prolonging that training through the life 

of engineers. That is an ongoing aspect. It is the one that I am more concerned about because, as we have 

discussed before, that is a cultural issue and we need to ensure that it continues to happen despite changes in 

postings and people. 

We have people outsourced at the moment to a number of companies. What I am looking for in the new 

shipbuilding regime that we are moving into is that we actually take all opportunities to mix our engineering and 

technical staff with those industries during the process of the design and build phase of the new ships to increase 

the breadth of engineering understanding. All of those things are desperately important in managing 

seaworthiness in a fleet over time. That is a summary of where we have gone with Rizzo. 

Senator FAWCETT: I am very glad to hear that. You said that, of the 24 recommendations, 22 

recommendations were essentially closed out at your 12-month review point. I notice, for example, 

recommendation 6 was about identifying and then rectifying ICT gaps and shortfalls across the workforce. My 



experience in other parts of government is that it can take 12 months just to understand what the problem is, let 

alone successfully implement it. When you say it is closed out, can you provide us with some assurance that it has 

actually been actioned and the implemented result is achieving what was intended? 

Vice Admiral Barrett: It is being actioned. One of the aspects of that in the ICT was identifying those 

particular methods by which we will maintain configuration, management, control et cetera throughout each of 

the fleets. That identification of the system we will use has been made. That in and of itself sits within the 

department's view of where we are going with future ICT reform. But at this moment we are using programs that 

have been around for some time—AMS, for instance. Part of the major issue was to assure ourselves that we had 

populated AMS with the correct data to the full amount both in breadth and depth. That is still an ongoing issue. It 

was always going to be something that was going to take time. The issue for me, though, is that I was not seeking 

to measure success by saying that we had 100 per cent in breadth and depth. I wanted to be assured that, as a 

result of doing that work, I could assure seaworthiness of the platforms. So it was very much outcome focused. I 

am convinced that we are able to demonstrate seaworthiness outcomes even though we are still going through 

some of those measures within the ICT roles. But there are measures in place to continue to populate those 

particular IT requirements. 

Senator FAWCETT: I completely concur—outcome is good. I will come in a minute to some questions 

around sea-ready days across the various fleet units. Just on recommendation 14, for example—monitor and audit 

technical compliance—I am just after an indication, now that you have that system in place, of whether the results 

of that are what you expected. You obviously have had experience with the airworthiness system previously as 

you compare what DGTA finds with their audits. Are you finding that Navy is moving toward or reaching some 

of the benchmarks of Airforce? 

Vice Admiral Barrett: We are in the way that the system works in place. We set out not specifically to copy 

the airworthiness regime because there are differences. There were compromises that had to be made given that 

the management of technical integrity in the surface fleet is somewhat different from a fleet of aircraft. But part of 

the assurance regime included things like seaworthiness boards, raising of corrective action and the management 

of those corrective action reports et cetera. All of those things are in place. I am comfortable that we have taken 

all of the right steps. What I am seeing is again outcome based—I am seeing people making appropriate riskbased 

decisions given the knowledge that they now have. That does not mean that all of our ships have to be 

seaworthy all of the time on every occasion. But we have a better understanding of the technical integrity due to 

those systemic measures that we have put in place. There are a large number of corrective actions that need to be 

made. There are stresses on the system in place in terms of seaworthiness boards and all of the actions that come 

out of that. But what I see and what I have absolute confidence in and what I tell the Chief of the Defence Force is 

that I have an assurance that we are managing within all of the appropriate tolerances to be able to deliver the 

outcome. There is a benefit to doing all of this. That benefit that I see is that we have had a dramatic increase, I 

would say, in availability of in particular submarines, which is Coles related, but also with our other platforms at 

the moment. As we speak, we have about between 10 and 12 ships off the Western Australian coast performing 

an exercise as a task group. We have not seen that for a long time. Availability has improved and I put it down to 

improved engineering management. 

Senator FAWCETT: That is probably a very good segue. Can you give me a quick summary of what you 

have closed out with Coles? My understanding on availability is that late last year you actually had five of the six 

Collins class submarines available or deployed. 

Vice Adm. Barrett: If I can strip away all of the things that Coles sought to do, it was to demonstrate that we 

need to take a fresh look at how we conducted submarine operations at all levels as an enterprise. That is, it was 

not just Navy, it was not just CASG or DMO at the time and it was not just industry; it was actually an enterprise 

to look at all of it. He did three reports. The first one was I will not say damning, but it clearly pointed to things 

that we were not doing. The evidence was obvious—we were not getting submarines to sea at the levels we 

needed. His second report a year later, which was about two years ago now, indicated that there were 

improvements and we had taken on board the basics. Some of those basics were pretty simple at the end of the 

day. He reminded us that we own six submarines. He said that from that you should be able to provide four 

submarines to the fleet commander, from which he can deploy two from there. So the other two would be for 

training et cetera. He gave us until the middle of 2016 to demonstrate that we could achieve those sorts of 

measures as a benchmark. That was for availability. Following through on his measures, closing together on what 

was needed from an enterprise, we managed to do that—we met those targets last year in June. Indeed, it is 

correct that at the end of last year we had five submarines in the water, but the fleet commander had the four that 

were needed and we had two that had been deployed. Indeed, over the last 18 months we have met those 



requirements for the fleet commander consistently. So there has been a dramatic improvement in availability of 

the Collins. The next benchmark that Coles was driving us towards, which he has given us until I think 2020 on, 

was to actually look at ensuring that we had maximised the effectiveness—that is, the cost in sustaining—and that 

we were spending only that which was needed to be able to provide that availability that we have achieved from 

last year. 

Senator FAWCETT: Thank you. 

Mr Richardson: We got Mr Coles back ourselves last year. It was not under any—it was our own initiative. 

Mr Coles flagged the progress that had been made as remarkable. He said the biggest risk we faced was 

complacency. Because of that, we intend to get him back at regular intervals. 

Senator REYNOLDS: I just had the pleasure of attending on behalf of the minister your birthday celebrations 

for the Royal Australian Navy today. I just wanted to say, on behalf of everybody here, happy 116th birthday to 

the Navy. It was a day of anniversaries. Not only is it your birthday but it is also the 50th anniversary of the 

Australian White Ensign and also the 75th anniversary of the sinking of HMAS Perth and her 300-plus 

complement. I just wanted to let you know that your men and women this morning did you proud. It was a 

beautiful commemorative service down on Anzac Parade. 

Senator Payne: Thank you for attending. 

Senator REYNOLDS: I was really delighted to. It would be remiss of me not to note that there is another 

service that has a birthday today. Of course, that is Army as well. That is all—thank you, Chair. I just wanted to 

thank you and tell you that it was wonderful. 

Senator Payne: Chair, it is worth noting also, as it is the 75th anniversary of the sinking of HMAS Perth, that 

the director of the Australian War Memorial advised me yesterday that he has arranged for the bell of HMAS 

Perth to be at the War Memorial to be rung at the last post in commemoration, which I think is a special 

observation as well. 

Senator REYNOLDS: There is just one more thing, Chair. CDF, thank you very much to VCDF and the staff 

who supported the Joint Standing Committee on Foreign Affairs and Trade subcommittee hearing on the annual 

report. I had really fantastic feedback from the members who attended, particularly the House of Representatives 

colleagues who do not get the opportunity to get into as much depth in a portfolio. We were very grateful for the 

briefing and the effort that went into it. Can you pass on, on behalf of all committee members, our thanks as well. 

Air Chief Marshal Binskin: I appreciate you acknowledging that, Senator. 

Senator XENOPHON: I have a line of questioning in relation to the issue of ration packs. As I understand it, 

there is a tender out for the ration packs for the Army. Is that correct? 

Major Gen. Coghlan: It is for the Australian Defence Force. 

Senator XENOPHON: It is not just for the Army—it is for the entire Defence Force? 

Air Chief Marshal Binskin: The other services have to eat too, Senator. 

Senator XENOPHON: I did not know whether the other services—whether there was a naval ration pack or 

an airforce ration pack. 

Air Chief Marshal Binskin: No, it is an ADF ration pack. 

Senator Payne: We could send some around. I know how hard you work. You are always at your desk. 

Senator XENOPHON: Just add water. With no disrespect to our Anzac brethren, can you tell me how we got 

to a point where a New Zealand company supplies the Australian Defence Force with its food for our troops on 

the battlefield, when they need their ration packs? 

Major Gen. Coghlan: The New Zealand company is the prime vendor for ration packs. They are not the 

exclusive source for the items that go in that ration pack. They are the organisation or company that brings 

together the various components of the ration pack. There can be up to 43 components in order to produce a ration 

pack. The prime vendor arrangement for that was created in June 2009. That significantly reduced the 

administrative workload for Defence. The extension on that contract has recently run out and we released a new 

tender for combat ration packs in September 2016, followed by an industry briefing in November. The tender 

closed on 28 February this year. 

Senator XENOPHON: Of those 43 items, can you give me an idea in broad terms how many of those were 

Australian? I do not need to know the ingredients, but can you tell me how much of that is Australian-made, 

Australian-processed food? 



Major Gen. Coghlan: For an indicative one-man ration pack, 11 items or 25 per cent are Australian in origin; 

56 per cent are New Zealand in origin; and the remaining 19 per cent come from the United States, Vietnam or 

China. I can go through individual items to give you an idea of the type of product if you like. 

Senator XENOPHON: If you are on a roll, why not. Just give us an idea. 

Senator Payne: This could take a while, Senator. I can actually see the page that this is written on. Would you 

like to have it provided on notice? 

Senator XENOPHON: I might get it tabled, but just give me an idea. What is Australian? 

Major Gen. Coghlan: Sure. I might go from the other end—what is not Australian and New Zealand. The 

Chinese sourced items are very basic in nature—matches, spoons, 10 sheets of toilet paper. 

Senator XENOPHON: You do know that Kimberly-Clark makes toilet paper in the south-east of South 

Australia, don't you? 

CHAIR: You are interrupting, of course, and wasting time. We are up to toilet paper. Keep going. 

Major Gen. Coghlan: And can-openers. As far as the food items are concerned, it depends on where the 

contractor sources it from. The Australian food component and the New Zealand food component vary. In this 

particular case I can go into detail for one particular ration pack at a given point in time. 

Senator XENOPHON: Can you tender that? Are you in a position to tender that? 

Major Gen. Coghlan: I can tender it. 

Senator XENOPHON: If that can be tendered through you. 

Air Chief Marshal Binskin: You are doing take-away, are you, Senator? 

Senator XENOPHON: That is right. 

Air Chief Marshal Binskin: I was just checking. 

Senator XENOPHON: Air Chief Marshall, I did not know you had that sense of humour. 

Senator Payne: Yes, you did. We have to have a sense of humour to get through this process. 

Senator XENOPHON: Not during estimates. If that can be tendered—can that be tendered now? 

Major Gen. Coghlan: Yes. It is double-sided. I will provide you with a single-sided— 

Senator XENOPHON: That is fine. The new procurement rules that the Commonwealth has agreed to have 

come into force today. To what extent do they apply to Defence in terms of the requirement for Australian 

standard goods, looking at the economic impact of any purchases over $4 million? Mr Gillis, can you tell me to 

what extent—there will be an inquiry into procurement specifically, but will the new rules apply to any decision 

made by the Commonwealth in respect of the ration pack? 

Mr Gillis: I will ask my acting first assistant secretary for contracting and procurement, Ms Bergmann, to 

answer that question. She is specifically prepared for that. 

Senator XENOPHON: Ms Bergmann, you are familiar with the new procurement rules that come into force 

today? 

Ms Bergmann: Absolutely. 

Senator XENOPHON: Will they be applying to this tender? It is worth how much approximately? 

Major Gen. Coghlan: The last contract value was $89 million over an eight-year period. This tender closed 

on 28 February. 

Senator XENOPHON: So it is going to be over $10 million a year presumably? What will this be—in the 

order of at least $10 million a year presumably? 

Major Gen. Coghlan: Depending on the operational requirement or demand, it will vary. 

Senator KIM CARR: I was following that, but I did not quite hear you say that the new procurement rules 

apply to the contract. 

Senator Payne: It is not answered yet. 

Ms Bergmann: As you would know, the new CPRs come into effect today. 

Senator XENOPHON: It is a beautiful thing too. 

Ms Bergmann: Indeed. They do not apply to tender processes that commenced prior to 1 March. 

Senator XENOPHON: Is there any intent to conform with the spirit of those new tender processes— 

Australian made, taking into account ethical employment practices, environmental standards and the economic 



impact of buying local? Minister, can you help me with that? The new procurement rules come into force today. It 

does not apply to this tender. Has any policy decision been made as to whether those new rules, which take into 

account issues of economic impact et cetera and Australian standards, will apply for this particular tender? 

Senator Payne: I am not advised by the Minister for Finance as to whether there is an approach across 

government in relation to that. I would say in relation to Defence though and in relation to any tender process that 

it is difficult to retrofit a tender arrangement such as the one you are discussing with Major General Coghlan, 

which closed in February I think you said. It is difficult to retrofit a tender process of that nature. 

Senator XENOPHON: We are talking about ration packs, though. It is food. Presumably that could be— 

Senator Payne: Are you suggesting that we should start every tender process again that is underway? 

Senator XENOPHON: No. You are saying that, if it was an overseas supplier that was much cheaper despite 

the impact it would have on jobs and investment and all of those things as well as local supply chain for 

Australian food manufacturers and producers, that would be ignored because it would be under the old rules? 

Senator Payne: I am not necessarily saying that. In fact, I suspect the most practical approach would be to 

take it on a case-by-case basis. 

Senator KIM CARR: Minister, you said that the Minister for Finance had not advised you. 

Senator Payne: Of whether—I understand the rules to have come into operation today. 

Senator KIM CARR: But there has been a notice placed on the Department of Finance website and I 

understood this was a matter that had been communicated to procurement officers. 

Senator Payne: I was responding to Senator Xenophon's question as to whether all existing tender processes 

should be reviewed to apply it in retrospect. That was the question I was responding to. 

Senator KIM CARR: I see. I am just trying to clarify. When was this tender opened? 

Major Gen. Coghlan: It was opened in September last year and was followed by an industry briefing in 

November. It closed on 28 February. 

Senator KIM CARR: The changes to the legislation were passed by the Senate in December. Has there been 

any communication with industry about those changes from the Department of Defence? 

Senator Payne: Broadly speaking or in relation to this particular tender? 

Senator KIM CARR: Let us do both—broadly and specifically. 

Mr Gillis: Yes, I gave a briefing to the Australian Industry Group and had a discussion with that organisation 

and other industry forums about those. But we have only recently received the formal guidance from the 

Department of Finance, so we are in a process now of promulgating that to industry organisations. 

Senator KIM CARR: What would the consequence be of applying the changes to this particular tender? 

Ms Bergmann: In relation to this, we have specifically sought guidance from the Department of Finance 

about the applicability of the new CPRs. They have been very clear that they apply to new procurements—new 

approaches to market from 1 March onwards. 

Senator KIM CARR: So in your assessment they have explicitly excluded applying it to this? Is that how you 

read that advice? 

Ms Bergmann: My understanding is that our obligation is to apply them to new procurement processes. 

Senator KIM CARR: We are talking about a different thing here. I understand that the obligation operates 

from 1 March given that was the nature of the amendment. The question is: what is your obligation to Australian 

industry? What is to preclude you from applying those provisions to this tender? What are the consequences of 

doing that? 

Ms Bergmann: It would mean we would need to reopen the tender and seek additional information. This is a 

tender process that has already closed. 

Senator KIM CARR: That is your advice—you would need to reopen it. Is that what you are saying? 


Senator XENOPHON: But don't all tenders contain a clause saying they can be revisited or cancelled? I 

negotiated in good faith with Senator Cormann, the Minister for Finance, on this and I have great regard for that 

process. My understanding—and I would need to look at the Hansard—was that people were given notice that the 

system was changing and 1 March was the date when the new rules applied. But I saw that as a transitional period 

so that people could get ready for that greater degree of Australian industry participation. 



Mr Richardson: But the tender went out last September. 

Senator KIM CARR: The question I am going to is the issue of the consequence of changing the 

arrangements. You are saying that you have to reopen. What is the consequence of reopening the tender? 

Mr Richardson: It puts everything back. It delays things. 

Senator KIM CARR: Is the Army not going to be fed? Are the services not going to be fed? Are you running 

out of supplies? When is this operating from? 

Mr Richardson: Then do we reopen every tender that has gone out? I just— 

Senator KIM CARR: I am not asking for every tender—I am saying this particular one for a ration pack. 

Mr Richardson: If I could just make a general point. It is only a personal comment and it may be very wrong. 

From the Major General's comments, 81 per cent of the ration pack is Australian and New Zealand—56 per cent 

New Zealand and 25 per cent Australian. I would simply note, and this is only a broad comment, that our trade 

with New Zealand is such that, in our trade and investment, we have a particular relationship with New Zealand. 

If you want to cost Australian jobs you will start to limit things in respect of New Zealand. We have a trade 

surplus and we have an investment surplus. It is just a general comment. 

Senator KIM CARR: I do not think that anyone here has mentioned New Zealand, Mr Secretary. That has 

not been an issue. The question is about the definitions under the CPRs and all of that. We understand that. The 

question is about reopening this particular tender. You are saying that it would be too costly and too disruptive. Is 

that the proposition you are putting to us? 

Mr Richardson: That is right. Yes, that is what we are saying. 

Senator XENOPHON: I have been advised that these rules are WTO compliant and they have been checked 

by the Department of Finance's lawyers. So there is no question that they would breach any trade agreements that 

we have with any of our trading partners. 

Mr Richardson: I am not suggesting that. I am just simply making a broad point in respect of our relationship 

with New Zealand and the fact that the ration packs are 56 per cent New Zealand and 25 per cent Australian. It is 

in the spirit of Anzac. 

Senator LUDLAM: I am not sure who is most going to feel willing to take this on. I am presuming everyone 

at the table has seen the Iraq dossier released to Fairfax under FOI a couple of days ago, the details of which were 

published on the weekend. Why was that report shelved or buried or—you can choose a word to your liking. 

Air Chief Marshal Binskin: It was not buried. 

Senator LUDLAM: Why did it have to be extracted under FOI? Maybe I will use less emotive language. 

Why did it have to be sought and fought for over a period of several months? 

Air Chief Marshal Binskin: The document was commissioned by Army to get a working level view of and 

lessons learned from the Iraq war. It delved deeper than that with a working level view. In its classification it 

became evident as we went through the research that it would be unsuitable to be published, as a part of its 

original intent was as a campaign booklet that Army were looking to do. While the document from Dr Palazzo 

rightly addresses the challenges, disagreements and difficult decisions that were a part of any operation, it was 

unofficial. It was at the working level. The views were expressed as opinions from the author. It would not have 

the academic rigour that you would put into an official history that you would then go out and publish, nor would 

it have access to all of the information that was required to do a full history and analysis, which it sort of started to 

delve into. 

Senator LUDLAM: I take it you are very familiar with it. Have you read the whole unredacted document? 

Air Chief Marshal Binskin: I have not read the unredacted version. I have read the redacted version. The 

Chief of Army has been across the unredacted version. 

Senator LUDLAM: The central finding, which I suppose is certainly the one that has garnered the most 

media attention, is—and I will just quote from page 151: 'Australia joined the Coalition against Iraq in order to 

improve its relations with the United States'. Through conversations with more than 75 military figures, current 

and retired, and full access to classified material he effectively dismantled the case that there were any other 

strategic objectives served by our participation in that invasion. That is his central finding or it is certainly the one 

that— 

Air Chief Marshal Binskin: It is his opinion. 

Senator LUDLAM: Yes, it is his opinion. What is your view? 



Air Chief Marshal Binskin: I do not know if he had access to cabinet documents. He did not. So I do not 

think he is in a position to make a full assessment, to be quite honest. I think you will find that, canvassing most 

of the people he canvassed, that was a working level view without full access to what the government 

consideration of the day was looking back 13 or 14 years. 

Senator LUDLAM: Because there has never been a full public inquiry into the decision making behind the 

invasion of Iraq, this is the best we have had to work with so far. 

Air Chief Marshal Binskin: I do not think it fully covers all of the aspects, so I would not take some of the 

lessons that you might be trying to take out of it. 

Senator LUDLAM: He does not have access to cabinet documents and I do not think he claimed to do so. So 

there is a political story there, I guess, that he does not have access to them. 

Air Chief Marshal Binskin: It is not a political story. That was not the intent of the review that he was doing. 

The review he was doing was at the tactical level and lessons learned for that level of Army that they could put 

into place in the future, because we always do lessons learned. It was his decision to then delve more broadly than 

that. Unfortunately, he did not have access to all of the information required to do that. 

Senator LUDLAM: The lessons that he was learning from those on the ground at a working level, as you put 

it, were that our participation was largely pointless and entirely political. Does that concern you? Is that a decent 

enough reason to put your personnel into harm's way? 

Air Chief Marshal Binskin: I think you are going into a generalisation there. 

Senator LUDLAM: He is actually quite specific in the document. 

Air Chief Marshal Binskin: That is his opinion. 

Senator LUDLAM: Does it concern you that personnel in your care or in your predecessor's care were put 

very much into harm's way for what are essentially political rather than military or tactical or strategic objectives? 

Air Chief Marshal Binskin: Again, it is his opinion. We operate in accordance with what the government's 

strategic intent is on the day. 

Senator LUDLAM: What strategic objectives did Australia achieve through its involvement in that war? 

Air Chief Marshal Binskin: I think if we go back into that we could be here all day. I am happy to take all of 

that on notice and provide those details to you. 

Senator LUDLAM: Okay. If you are taking matters on notice, can you tell us what the total spend of 

Australian military operations in the Iraq War from 2003 to 2010 was? 

Air Chief Marshal Binskin: We can do that. We can give you a list. 

Senator LUDLAM: And the total number of casualties on all sides of that conflict. 

Air Chief Marshal Binskin: On all sides? 

Senator LUDLAM: Yes. 

Air Chief Marshal Binskin: We will take that on notice. 

Senator LUDLAM: I would greatly appreciate that. Do you dispute that central finding that Australia joined 

the war solely to strengthen Australia's alliance with the United States? 

Air Chief Marshal Binskin: Again, I was not privy to the government consideration of the day. But, given 

the general knowledge that I did have, I would dispute that that was the only reason we went into that. There were 

far broader concerns about what was happening in the region leading up to that and around that time. It is all 

widely known. It is all public access information if you care to go and read it. 

Senator LUDLAM: I have read a fair bit of that material. My view before having come across this dossier 

was that our objectives were political and not at all as described by the Howard government at the time. This 

appears to back those contentions up. 

Air Chief Marshal Binskin: You will have to go back and talk to the prime minister of the day. 

Senator LUDLAM: We will see if we can get him in front of an inquiry then. President Trump has said that 

he is seeking to increase US defence spending by $70 billion—that is in Australian dollars—or about nine per 

cent. This is since his inauguration. He has proposed one of the greatest military build-ups in American history. I 

understand that Australia and other allies—Japan, South Korea et cetera—have been under some public pressure 

in recent months to increase our defence spending. Maybe this is best directed to you, Senator Payne. What 

discussions or correspondence has the Australian government entered into regarding Australia's defence budget 

since the turnover in the US administration? 



Air Chief Marshal Binskin: I think before the minister and the secretary get a chance to talk about that, the 

reference point that the US administration incoming president was using was a NATO standard of aiming for two 

per cent of GDP. Any reference that we would have on being able to answer that would be what our current 

percentage of GDP is and what the goals of the white paper are. 

Senator LUDLAM: The goals of the white paper are to reach two per cent. 

Air Chief Marshal Binskin: So we are actually at the point where I would think the US administration would 

come from. 

Senator LUDLAM: That arbitrary settling of a target of two per cent of GDP has been criticised from within 

and outside of the Defence establishment because it is utterly arbitrary. Shouldn't we be deciding what capability 

we want and then figuring out how much it costs rather than just setting a completely artificial benchmark? 

Air Chief Marshal Binskin: It is iterative. You work along the capabilities that you would require, what the 

strategy would require us to fund and what is affordable and then you would be able to set the targets in that 

space. 

Senator LUDLAM: And that number magically arrives at two per cent for Australia and every— 

Air Chief Marshal Binskin: It did not—not 2.0 per cent. It is a goal that is a common reference around the 

world for what is an appropriate amount of spend. 

Senator LUDLAM: For countries with totally different strategic circumstances to Australia, it magically 

arrives at two per cent? 

Senator Payne: I do not think you can expect any of us to comment on the matter for other countries. But 

clearly what we have set out as a government in the defence white paper and in the Integrated Investment 

Program, which is underpinned by that, is a capability development program—and support to the key enablers, 

for example, of defence that literally make it work every day—that is targeted, carefully planned and based on a 

full structural review which preceded the development of the white paper and the Integrated Investment Program. 

As that Integrated Investment Program and the spend associated with that tracks, we are able to indicate that 

Australia will reach about two per cent of GDP spend on defence in the year 2021. That is something which I and 

the Prime Minister have spoken about regularly in the public environment. In terms of the observations of the 

United States, it is true to say that Secretary Mattis, in discussions with his NATO colleagues in Brussels at their 

most recent meeting, raised this with them. Australia was not and is not part of that discussion. As regards any 

correspondence or engagement, I most certainly very strongly advised Secretary Mattis of where we were, what 

our plan was, what our Defence white paper set out and what our Integrated Investment Program set out. I 

indicated to him that that would achieve a spend of two per cent of GDP by 2021. But, more importantly, it would 

satisfy Australia's capability needs across Airforce, Navy, Army and the Defence organisation and the things that 

it needs to do to properly address capability and serve the nation entirely appropriately. 

Senator LUDLAM: Thank you for that. I was not expecting you to go into details of that conversation. But, 

since you have, did the secretary— 

Senator Payne: It is a public statement. 

Senator LUDLAM: Did the Secretary of Defense invite Australia to make a greater contribution either in 

procurement or in military commitments around the world? 

Senator Payne: No, not at this point. I have also said that publicly. 

Senator LUDLAM: That is okay. That is what you said publicly a few days ago. It is worth bringing it up just 

to see if there are any updates. Are you expecting a request for a greater commitment of ADF resources or 

personnel? 

Senator Payne: There is a new administration, a new Secretary of Defense, new secretaries of the services 

and a new National Security Adviser. I would expect any responsible administration to review their strategic 

commitments, as any new government would in Australia. What flows from that we will wait to see. 

Senator LUDLAM: Is any contingency planning underway for a greater commitment of Australian personnel 

or resources to anywhere in particular overseas? 

Senator Payne: We are constantly reviewing our commitment. It is not caused by or as a result of changes in 

the US administration or, for that matter, any of our other allies or partners. We are constantly reviewing our 

commitments. Government is regularly informed of and advised by the Chief of the Defence Force and the 

secretary of the department in relation to those matters, as you would expect and as should be the case. As I said, 

we will wait to see what comes from any review that the United States makes in relation to its strategic 

commitments. 



Senator LUDLAM: So there is nothing new—no studies, no contingency planning and no scenario planning 

is underway within either the ministry or the ADF as a consequence of a change of administration in the US? 

Senator Payne: You are repeating yourself. And, to repeat myself, I am saying that we are always planning, 

looking at different scenarios and reviewing our commitments because the international situation is a very 

dynamic one, as you would appreciate. We have thousands of Australian men and women serving our nation in 

international arenas at the moment in harm's way. That is a very dynamic environment. It is something we deal 

with on a daily basis. 

Senator LUDLAM: Given that a large number of Australian personnel are serving side by side with Muslim 

allies in the region, have you had to evaluate any changes in the security environment resulting in, for example, 

concepts like a Muslim ban or the escalation of racist or white supremacist rhetoric from US administration 

figures that could in fact impinge on the safety of Australian personnel serving side by side with people? 


Senator LUDLAM: Is that not something that you thought might be worth evaluating? 

Mr Richardson: I personally think it would not be. 

Senator LUDLAM: Really? 

Mr Richardson: I think your colouration of all of that would not be worth an evaluation by us. 

Senator LUDLAM: Before he was president and when he was a candidate, Donald Trump proposed a 

Muslim ban. Now he is the President of the United States and they are busy trying to legislate for one or create 

one through executive order— 

Mr Richardson: I am not aware of him trying to legislate for one. 

Senator LUDLAM: No—it was an executive order. I corrected myself. 

Mr Richardson: I am aware that he had a presidential directive and I am aware that the courts made certain 

decisions on that. I am aware that there is now speculation that the administration might bring forward another 

presidential directive. 

Senator LUDLAM: I understand that. My question, to be direct—and the might be answer is no; you were 

pretty clear just now and that is fine—is whether you believe that the escalation in rhetorical hostility to Muslims 

by the Trump administration places an extra burden of risk on Australian personnel serving side by side in 

predominantly Islamic countries with allies in those regions. 

Mr Richardson: My own personal view is no. 

Senator LUDLAM: And that is reflected in policy. 

Mr Richardson: There are wider issues than that, which I will not comment on. 

Senator LUDLAM: Why would you not comment on wider issues? 

Mr Richardson: Because I am not going to. 

Senator LUDLAM: That is a ridiculous answer. 

Senator Payne: You did actually ask Mr Richardson what he believed, so he has given you an entirely 

appropriate answer. 

Air Chief Marshal Binskin: The countries we work with over there are pretty sophisticated countries. They 

understand the difference between Australia and the United States and our views and their views, whatever may 

be spoken or not. 

Senator LUDLAM: Where there is an extension of US foreign policy, I think they probably do recognise that 

we are part of US alliances and that is the sole reason we are there. 

Air Chief Marshal Binskin: No— 

Senator Payne: That is entirely incorrect. Australia makes its own judgments and assesses the case for 

engagement on its own merits, not, as you might spuriously claim, as an extension of US foreign policy. 

Senator LUDLAM: I do not think anybody outside of this room believes that. 

CHAIR: We might just leave it at that if we can. 

Senator Payne: Perhaps not in your party, Senator, but then I cannot speak for that organisation. 

Senator FARRELL: Secretary, Minister Pyne recently said that you had advised him that we need 

supplementary power generation at Osborne. Mr Gillis, before the minister made that statement, were you aware 

that there were power problems down at Osborne? 



Mr Gillis: Yes, I had read the newspapers about the power issues and outages in South Australia. 

Senator FARRELL: You then investigated the issue at Osborne, did you? 

Mr Gillis: No, we had already previously commissioned OMT—Odense Maritime Technology—to look at 

the shipyard infrastructure design, a part of which was the power requirements. 

Senator FARRELL: When was that commissioned? 

Mr Richardson: They did some work late last year and they were commissioned in early December to do 

this. 

Mr Gillis: But they had previously been working with us for up to six months doing a range of other different 

options. The specific tender or contract was in December to do this work. They are due to report back their 

preliminary findings on 13 March. 

Senator FARRELL: Is that 13 March this year? 

Mr Gillis: Yes. 

Senator FARRELL: So you commissioned this. What were they looking at? What was the nature of their 

commission? 

Mr Gillis: The task was to actually look at the existing infrastructure, which they had been doing in the 

previous six months at Osborne, then they were to look at what were the infrastructure requirements to achieve a 

continuous build of frigates in ASC South, as it is known, and what are the requirements for the facilities, what 

are the land requirements and how do we optimise shipbuilding in that location to enable continuous building at 

the lowest possible cost. 

Senator FARRELL: So this was quite a general investigation into Osborne's capacity? 

Mr Gillis: There was a specific requirement to actually redesign a shipyard and to work with local South 

Australian companies and naval architecture firms to actually build a new infrastructure for South Australia. 

Senator FARRELL: Was one of the issues that they were looking at supplementary power generation at 

Osborne? 

Mr Gillis: A part of their design was to look at all of the infrastructure, a part of which is the power 

requirements. 

Senator FARRELL: Was that specifically mentioned in the tender? 

Mr Gillis: I would have to take that on notice. 

Mr Richardson: Power requirements certainly were. I recall that. 

Senator FARRELL: In particular a supplementary power source? 

Mr Richardson: I do not know the answer to that. 

Mr Gillis: ASC already has an existing supplementary power requirement. They already have power at that 

site. This would be looking at what would be the future requirements. 

Senator FARRELL: That is correct, isn't it. They have a critical systems backup, don't they? 

Mr Gillis: Yes, and a part of that function would be to assess if that is going to be suitable for the size of 

infrastructure and the size of the work that we would be actually undertaking under the continuous build of 

frigates. 

Senator FARRELL: Just going back to what you said—that it already has a supplementary power source— 

has there been any suggestion that there have been problems with that supplementary power source? 

Mr Gillis: Not that I am aware of. 

Senator FARRELL: In a blackout period, has that swung in to do the job that it is meant to do? 

Mr Gillis: You would have to ask ASC. I am not aware of that level of detail. 

Senator FARRELL: But ASC have not mentioned to you that they have had any problem with their power 

source? 

Mr Gillis: That would be one of my ship's commodores who would have that direct relationship with them. 

Senator FARRELL: But nobody has mentioned to you that there has been a problem with power source at 

Osborne? 

Mr Gillis: Not directly to me, but that may have happened. I am not aware of it. 

Senator FARRELL: Could you make an inquiry? 



Mr Gillis: Yes, Senator. 

Senator FARRELL: Thank you. When did the minister request the department to provide information about 

the Osborne power source? 

Mr Gillis: On 8 February. 

Senator FARRELL: So the same day that the question was asked was the day he requested the information? 

Mr Gillis: The request came in from his office on 8 February. 

Senator FARRELL: What time on 8 February? 

Mr Gillis: It came in to my office at 12.00. But I had received a phone call from the staffers earlier than that 

day with a similar request. 

Senator FARRELL: So at no time prior to 8 February had Minister Pyne made any request about information 

regarding the power source at Osborne? 

Mr Gillis: No, Minister Pyne—I had actually had a number of conversations with him about his concerns 

about the power in South Australia and he had asked me prior to that about whether OMT—or I indicated that the 

OMT work was looking at the power, because he had obviously indicated his concerns about the power issues in 

South Australia. 

Senator FARRELL: When did he first raise the issue? 

Mr Gillis: I am not aware. It would have just been a conversation. I do not have a record of it. 

Senator FARRELL: I thought you said he raised it with you on the 8th. 

Mr Gillis: That was when I received a formal request from his office. I do have a recollection of a 

conversation with him prior to that, but I am not sure exactly what that day—it was just a conversation where he 

did mention his concerns about power in South Australia. 

Senator FARRELL: What was your response to him? 

Mr Gillis: I indicated that that was part of the OMT studies. 

Senator FARRELL: The official request came in on 8 February? 

Mr Gillis: Correct. 

Senator FARRELL: Did you respond the same day? 

Mr Gillis: Yes. I did not actually respond; one of my staff responded. 

Senator FARRELL: Yes, I appreciate that. What was the form of that advice? 

Mr Gillis: It was an email. 

Senator FARRELL: Before you gave the minister some advice, did you contact ASC about their power 

issues if there were any? 

Mr Gillis: Personally not, but I know that I have a number of naval commodores who work very closely with 

ASC who would have had those sorts of discussions. But I am not aware of those specifics. 

Senator FARRELL: They would have had those discussions on 8 February? 

Mr Gillis: The response came back from one of my navy commodores. I do not know whether he actually had 

a discussion with ASC directly on that date. 

Senator FARRELL: So the request comes in from the minister. What was the specific question that the 

minister was asking? 

Mr Gillis: I actually do not have that specific question. I have the response. 

Senator FARRELL: Are you able to get that question for us? 

Mr Gillis: I can take that on notice. 

Senator FARRELL: Thank you. What was your specific response? 

Mr Gillis: I did not provide a response—one of my staff replied. But I do have that response. 

Senator FARRELL: What was it? 

Mr Gillis: It was 'Defence is still developing the detailed infrastructure design, so it is not possible to provide 

a definitive answer at this time. However, Defence does expect to require a range of services, including power 

and other utilities, on a reliable, continuous basis as an underpinning enabler of delivery against government 

continuous naval shipbuilding requirements. Defence is aware that South Australia has experienced some widely 

reported power outages in recent months, including outages of several days. Defence is also aware that current 



ASC ship and submarine yards at Osborne do have their own backup power supplies to help them cater for such 

outages. Defence is yet to formally assess the extent to which current ASC owned backup power arrangements 

might contribute to the future continuous naval shipbuilding needs but holds an expectation that existing 

emergency generators will not be sufficient to meet continuous naval shipbuilding needs and will need to be 

supplemented or even potentially replaced. Having not completed the design work or tested the market, Defence 

is only able to offer a very rough ballpark of cost estimates'. The estimates provided were between $10 and $20 

million for acquisition and installation plus ongoing operation and maintenance costs thereafter. But I am also 

aware that the minister's staff had sought independent engineering estimates that provided them with the $20 

million estimate. I think that is why the minister used the $20 million. 

Senator FARRELL: You have not had your report that you have commissioned, have you? 

Mr Gillis: No. We expect to receive that from OMC on 13 March. Between now and 13 March all three of the 

frigate designers will be consulted with that preliminary design to ensure that the preliminary design meets all 

three of the potential frigate designs so that those facilities are optimised. The other issue we have to assess is the 

fact that the future frigate is a continuous build. Those facilities need to be designed for potentially 50 years of 

use. Therefore, it is a much broader requirement other than just the need for that specific first class of frigate. We 

need to look at what the broader requirements are for frigate building, replacement of the air warfare destroyers et 

cetera out to 50 years. So it is a much broader task. 

Senator FARRELL: I understand what the objective of your inquiry relates to, but it is not really fair to say, 

based on your response, that you said to the minister on the 8th that we need to build our own supplementary 

power generation, is it? That is not a fair assessment of what you have just read out to me there. 

Mr Gillis: No, I have indicated that we believe there may be a requirement for additional supplementary, that 

that ballpark was around $10 million to $20 million and that we had noted the outages in South Australia. 

Senator FARRELL: But there is quite a difference, wouldn't you agree, from what the minister said. I will 

read it out. You have not advised him that we need to build our own supplementary power. Your advice was that 

we may need to do that, but we have an assessment going on on that very issue right at the moment. Really, what 

I am saying to you is that there is a difference between what you actually advised the minister and what the 

minister claimed that the department had advised him. 

Mr Gillis: I will go back to the statement: 'holds an expectation that existing generators will not be sufficient 

to meet continuous naval shipbuilding needs and will need to be supplemented or even potentially replaced'. We 

do hold that position. 

CHAIR: The answers are blowing in the wind, Senator Farrell. But I will desist from that. 

Senator Payne: You are showing your age, Senator. 

CHAIR: It is my bias, Minister. 

Senator KIM CARR: Can I return to this question of the contracts—specifically matters relating to the IT 

contract and Abacus. Have I mentioned them before? 

Mr Richardson: No. We will get the ICT— 

Senator KIM CARR: Abacus Innovations Australia. I understand there was a contract issued for $549 

million in Defence in September 2016 for IT services. Is that correct? 

Dr Lawrence: I can tell you what has happened. Abacus is the holding name of the new entity that Lockheed 

Martin formed when they sold their organisation to Leidos. We just transferred the original contract, which was in 

the order of that value, into the new holding name. 

Senator KIM CARR: What does the contract cover? 

Dr Lawrence: All of our core infrastructure—computing, storage— 

Senator KIM CARR: For the whole department or the ADF? 

Dr Lawrence: The vast majority of it, yes. 

Senator KIM CARR: Why was it necessary to outsource that work? 

Dr Lawrence: That was a strategic decision taken in about 2011 to outsource a number of functions, including 

that, to industry. 

Senator KIM CARR: So it was a policy decision, was it? 

Dr Lawrence: That was the strategy at that point in time, yes. 



Senator KIM CARR: Could it be delivered in-house? Not now, since you have downsized the department so 

much. 

Dr Lawrence: No, correct. 

Senator KIM CARR: How many jobs in Australia will it support? 

Dr Lawrence: In terms of how many Leidos have within their operation? 

Senator KIM CARR: Yes. 

Dr Lawrence: Much as the secretary explained earlier, within our service provision contracts we contract for 

a service. Leidos resource their contract to meet the service levels we require. 

Senator KIM CARR: So how many, do you know? 

Senator Payne: We can find out for you. 

Dr Lawrence: We can get a more accurate number. 

Senator KIM CARR: I would be interested to know how many are employed by Leidos onshore and how 

many offshore. 

Dr Lawrence: Yes, we can certainly help with that. 

Senator KIM CARR: You are saying, though, that the department cannot undertake that work now? 

Dr Lawrence: We would no longer have the skills to do that. 

Senator MOORE: But you used to. 

Senator KIM CARR: Are you able to tell me what areas of skill were identified through this contract which 

are crucial to the maintenance of this service? 

Dr Lawrence: I am sorry—can you clarify? 

Senator KIM CARR: What categories of people do you actually need to run a service of this type? 

Dr Lawrence: A lot of the people we need are the deep, technical system engineering, database administrators 

et cetera to run services of that nature. 

Senator KIM CARR: I presume you will be able to identify key personnel that are required? 

Dr Lawrence: In terms of on the contractor side? 


Dr Lawrence: Yes. 

Senator KIM CARR: Can you tell me what they are or who they are? 

Dr Lawrence: In terms of names or in terms of— 

Senator KIM CARR: Yes. I would seek that information on notice. 

Dr Lawrence: I will take that on notice and see what we can provide. 

Senator KIM CARR: I would expect that for a contract of this size for a department of this size and for the 

ADF as well—I understand you are saying it is not just the department; it is the ADF as well—there are 

considerable overlays in terms of personnel between the department and ADF and the contractor? 

Dr Lawrence: We work closely with Leidos to ensure they meet the service levels we need to support what 

we are doing in an operational sense and a business sense. 

Senator KIM CARR: What are the conflict of interest provisions that are developed in regard to a contract of 

this type? 

Dr Lawrence: It would have the normal protections you see in contracts. 

Senator KIM CARR: There are no special requirements? 

Dr Lawrence: No, not in particular. 

Senator KIM CARR: Do those conflict of interest provisions provide for contacts between ministerial offices 

and the contractor? 

Dr Lawrence: All contractors are at liberty I think at times to contact ministerial offices as part of their 

normal course of business. 

Senator KIM CARR: And the provisions for the conflict of interest arrangements do cover ministerial offices 

as well? 

Dr Lawrence: I do not have that detailed knowledge. 



Senator KIM CARR: Secretary, would you be able to assist me on that? 

Mr Richardson: If it was not covered by the contract, no. 

Senator KIM CARR: Does the department monitor those contacts? 


Senator KIM CARR: You would not be aware of them? 

Mr Richardson: Maybe; maybe not. I have never worked for a government where a department has 

monitored what a minister's office does or does not do in that sense. 

Senator KIM CARR: You are aware, though, of the departmental staff that move between the department 

and the contractor? 

Dr Lawrence: Yes, a number of departmental staff did move to the contractor as part of the outsourcing deal. 

Senator KIM CARR: Was this the sort of concern that you mentioned before, Mr Secretary? 

Mr Richardson: No, this is a service provider—it is quite different. The potential conflicts of interest that I 

see sit above this. 

Senator KIM CARR: Have there been any ministerial staff that have moved between the ministerial office 

and the contractor since the contract was awarded? 

Dr Lawrence: I am afraid I cannot answer that. Not that I am aware of. 

Senator KIM CARR: I am thinking here of Mr Jack Walker. Does the name sound familiar to you? 

Mr Richardson: We simply would not know the answer to that. 

Senator KIM CARR: Minister, would you be aware of Mr Jack Walker? 

Senator Payne: I know who Mr Walker is. 

Senator KIM CARR: Is he one of the 'budgie 9' that came to such public prominence in Malaysia recently? 

Senator Payne: I would not describe him in that way, but I know who you are referring to. 

Senator KIM CARR: How would you describe him then? 

Senator Payne: As Mr Jack Walker. 

Senator KIM CARR: He did formerly work for the minister, your colleague Mr Pyne? 

Senator Payne: I believe so—or I know so. Yes. I am not aware of any of his current activities. 

Senator KIM CARR: What interests me here is that we have a contract awarded for half a billion dollars. 

Was it in September last year? 


Dr Lawrence: I have to get my dates right— 

Senator KIM CARR: What date was that? 

Dr Lawrence: I signed the contract in 2014. 

Senator KIM CARR: What was the contract that was awarded in September? 

Mr Richardson: The contract was awarded to Lockheed Martin. Lockheed Martin sold that arm of their 

business. So what you see in September of last year is simply the transfer from Lockheed Martin to— 

Dr Lawrence: The holding company. 

Mr Richardson: the company that they sold that arm of their business to. 

Senator KIM CARR: I have a contract number here. It is CN3377790. It was a contract period from 7 

September 2016 to 2 September 2022. 

Dr Lawrence: That was the remaining term of that contract. The original contract I signed in 2014 with 

Lockheed Martin Australia. Lockheed Martin Australia sold their ICT business to a company called Leidos. 

Leidos incorporated themselves in Australia as Abacus Holdings. 

Senator KIM CARR: The date of this current contract—was it renewed? 

Dr Lawrence: That would have been the date on which we transferred one contract into the other contract 

vehicle. 

Senator Payne: That is normal business, Senator. 

Senator KIM CARR: And the value of the contract was $549,016— 



Dr Lawrence: It was $549 million. 

Senator KIM CARR: Of course—million. How could I get that confused. It was $549 million. It was 

transferred on 7 September to the new entity. 

Dr Lawrence: Yes. 

Senator Payne: Which is normal business. 

Senator KIM CARR: It was a central processing procurement open tender. In October Mr Jack Walker was 

employed by the company out of the ministerial office. 

Mr Richardson: Can I say that any suggestion of impropriety there and connection I would really have to 

take exception to. I would simply point out that this contract was entered into with Lockheed Martin in 2014. 

Lockheed Martin sold that arm of their business, as I said. It transferred across. Who they subsequently employed 

or did not— 

Senator KIM CARR: It was nothing to do with the department? 

Mr Richardson: First, it was nothing to do with us. Secondly, any suggestion of a connection between the 

employment of Mr Walker subsequently and the transfer of this contract I would have to— 

Senator KIM CARR: There is no connection? It is just a coincidence that the minister's staffer who has been 

the subject of a matter of public controversy is picked up by this contractor in October 2016? 

Mr Richardson: I wouldn't have a clue. 

Senator KIM CARR: It is nothing to do with the department. Minister, are you able to advise what role 

Minister Pyne had in the employment of Mr Walker by this contractor? 

Senator Payne: None that I am aware of. 

Senator KIM CARR: So no references were written? 

Senator Payne: None that I am aware of. 

Senator KIM CARR: I ask the question of you. Are you able to make yourself aware of these matters— 

whether or not there had been any contact— 

Senator Payne: I can certainly take your questions on notice. 

Senator KIM CARR: Is it possible that you could make inquiries over the lunch break on that matter? 

Senator Payne: I will endeavour to. 

Senator KIM CARR: I am particularly interested to know what contact there was with your colleague 

Minister Pyne and the contractor. 

Senator Payne: Thank you. 

CHAIR: Were there any changes to the terms of the contract from the sale from by Lockheed to this other 

crowd, Leidos? 

Dr Lawrence: No, not at all. It was just a straight— 

Mr Richardson: And it was not a government decision; it was a— 

CHAIR: There was no extension of the contract period? 


Senator KIM CARR: I asked questions of the department. The department is saying that the employment of 

Mr Walker had nothing to do with them and it was an entirely separate matter. My questions went to the 

capabilities of the department to undertake this work. You are saying it cannot undertake it anymore. Is that the 

sort of work, Mr Richardson, that you think you should undertake in the future? 

Senator Payne: The policy decision was made in 2011, Senator. 

Senator KIM CARR: I heard that. 

Senator Payne: By the previous government, I might add. 

Senator KIM CARR: Quite clearly 2011 is a date that I am familiar with. 

Mr Richardson: These philosophical issues move around. You know that. Outsourcing is in fashion one 

decade and the next decade it is out of fashion. It moves around. 

Senator KIM CARR: I think you will know my position on that. It has not moved around. 

Mr Richardson: Absolutely. 



Senator KIM CARR: This is a problem that is now becoming quite acute. I am not saying it is necessarily a 

matter of any one administration. I am saying that the question about the capabilities of the Commonwealth to 

perform its function—this is a good example, but it flies through in a whole range of areas. I think you were 

drawing attention to that earlier today, Mr Secretary—the number of consultants that are being employed and you 

were proposing to put a cap on the amount of money spent on that matter. So clearly it is a matter of concern to 

you. Is that the case? 

Mr Richardson: This particular matter is not. Indeed, I remember the discussion with Mr Lawrence and 

others. This was an area that was seen as perfectly appropriate to outsource. We want the service. We want certain 

service levels kept and, provided that it is kept, that is our major interest. We do not need all of these skills inhouse. 

What we do need is appropriate skills to manage arrangements of this kind. 

CHAIR: We will break for lunch. 


CHAIR: We will resume. Since I have the opportunity, I would like to ask this, if I may: since last estimates, 

the government has signed the intergovernmental agreement with France in relation to the future submarines. Can 

somebody assist me to answer some questions in that space? Thank you very much for coming back to the table. 

Could you please give me an overview of the intergovernmental agreement with France and, particularly, what 

Australia has been able to secure in terms of our capability and the future of that project, please? 

Ms Skinner: The intergovernmental agreement with France is an overarching government-to-government 

agreement which sets the relationship Australia will have with France during the delivery of the future submarine 

program. It was signed by the minister for defence on the French side and the Prime Minister on 20 December. It 

enters the Joint Standing Committee on Treaties in February. There are public hearings being held in the next few 

weeks. The agreement, as I said, underpins the procurement of the submarine and all of the arrangements that 

need to be put in place. It is the framework and it defines our cooperation between the two countries so that we 

can develop a sovereign capability and sustain that sovereign capability. The key issues that are covered in the 

treaty include technology transfer, intellectual property, export controls and security of supply, which is about 

ensuring that Australia can maintain a sovereign capability in its relationship with France. It also speaks to 

maximising Australian industry participation in the program. So they are the key elements that it covers. 

CHAIR: At the last estimates, concern was raised at the possibility of US concern with the selection of DCNS 

to partner with Australia. At the time, you indicated had you no concerns or you were not aware of any being 

raised. I want to ask you two questions. Does that situation remain? Are you able to share with the committee any 

further engagement we may have had with the US on this submarine? 

Mr Richardson: No concerns were raised at the time and no concerns have since been raised. Secondly, since 

the last committee hearing, Lockheed Martin have been awarded the contract for the weapons systems integration. 

They have already started productive discussions with DCNS about the way they will work together. But no US 

uniformed or non-uniformed personnel of any significance have ever raised with us any concern in respect of the 

acquisition of the DCNS submarines. 

CHAIR: As an extension of that, we are now some months down the track. We have had some advances 

made. I am just interested in knowing what now is the view of Defence, of the Navy, the submarine community 

and the wider community. In that context, are we seeing yet any increase in staff, particularly in South Australia? 

What is the mood now? 

Mr Richardson: I think it is fair to say that, first of all, this is a very long program. It is a very big program. 

We are still in the early days. But we are starting to see movement in respect of South Australia. The submarine 

area headed up by Mr Steven Johnson is engaged in recruitment activity across the board. DCNS are increasing 

their engagement in Australia. There have been roadshows which the Capability Acquisition and Sustainment 

Group has undertaken in numerous states making Australian industry aware of possibilities. DCNS haves also 

been reaching out. We are also in the process of establishing ourselves more substantively in France itself. 

CHAIR: So we are all focused on opportunities for Australian jobs, Australian industry and Australian 

content. What more, if anything, can you share with us now that you could not share with us in October last year? 

How much more confident are you now of employment prospects and opportunities for industry and, indeed, that 

very, very sensible question about Australian content? 

Mr Richardson: Well, the government has been committed from day one to maximising Australian industry 

involvement. Everything we have been doing both at the state level and in our engagement with the private sector 

has been designed to maximise that. I do not know if Steve wants to add anything to that. 

Mr Johnson: Your questions, I sense, are more South Australia specific. 



CHAIR: Correct. 

Mr Johnson: Of course, DCNS has opened a subsidiary, DCNS Australia. They opened their office 

headquarters in Adelaide in December. On the government side, we have added 43 Australian Public Service 

personnel last calendar year, so that is a bit of an overlap with the time frame you mentioned. We have added 25 

technical people on top of that. There have been 278 companies that have responded to our second industry day. 

The first one was in November. Again, I am trying to match your time frame. That was in Sydney. We have more 

industry days scheduled. The first one, of course, was in South Australia. We have 452 companies total registered 

between the two DNSs, France and Australia. Seventy-six are on the list to be qualified as potential suppliers right 

now. Thirty-nine are already confirmed. We have a collaboration started with Australian universities and research 

centres. 

CHAIR: Ink on paper, Mr Johnson? Contracts signed? 

Mr Johnson: Yes, sir. Contracts with research and universities? 

CHAIR: Yes. 

Mr Johnson: I am not aware that they are signed yet. They are in development. 

CHAIR: And with suppliers? 

Mr Johnson: Supplier contracts? We are in the design phase. The sequence of events is to register suppliers 

and confirm their quality capability as we are doing the equipment selections. In about a year from now or so, 

they start getting the substantive contracts. There will be some—I do not think it is answering your question— 

monetary compensation. For answers to questions, you have to pay for that level of detail. I sense your question is 

about long-term confirmed contracts. 

CHAIR: Yes. 

Mr Johnson: Those are in front of us. 

CHAIR: Sure. 

Mr Johnson: But we are in very good shape. It is a good start towards developing that industry base. It, of 

course, started with a handover from ASC of our Collins suppliers already. So those are overlapping nicely. The 

design of the shipyard has already started. We will bring that forward to the secretary later in 2017 in the bids to 

build buildings and other kind of shipyard infrastructure. Several of the requests for tender will go out this year, 

but most of it will be in 2018. 

CHAIR: This is the last question before I go to Senator Xenophon and his line of questions. In the Lockheed 

Martin decision you advised us of, are there local jobs in terms of giving effect to that contract? 

Mr Richardson: Yes. There will be. I will hand to Mr Johnson. 

Mr Johnson: That office also has stood up. There are about 13 people in it. It will grow substantially. Again, 

most of this is in front of us. About 200 of the total jobs that we have talked about between the 2,800—1,100 

direct and 1,700 related, added together being 2,800—will be full-time combat system integration jobs. We have 

the laboratory. Lockheed Martin has a laboratory already started, so that is the basis that we will work from until 

the infrastructure is built in the shipyard. We will move from that Adelaide technical park location under the 

shipyard after the buildings are built. 

CHAIR: Excellent. 

Mr Richardson: I might just add that the CEO of Lockheed Martin is in Australia this week and visiting both 

Canberra and Avalon. We do have discussions scheduled with her which will also cover submarines. 

CHAIR: Thank you for that. 

Senator XENOPHON: I want to ask the minister about the naval shipbuilding plan. I refer to the longawaited 

naval shipbuilding plan, which was foreshadowed by then minister Kevin Andrews in mid-2015 and due 

for delivery at the end of 2015. Minister, in the Senate last August, you advised me in response to a request 

without notice that the plan would be finalised by the end of 2016. Where are we at in respect of that plan? 

Senator Payne: I think Minister Pyne said in the House of Representatives in the last sitting fortnight that the 

government will release the naval shipbuilding plan imminently. That brings together all of the elements of the 

government's continuous naval shipbuilding strategy, the first in Australia's history. That is indeed the case. It is 

well underway. I am sure the minister will release it as soon as he is ready. 

Senator XENOPHON: In terms of it being imminent, are we looking at this side of the financial year or by 

the end of the year? 



Senator Payne: Most certainly this year and, indeed, this side of the financial year, yes. 

Senator XENOPHON: Thank you. 

Senator GALLACHER: We were told yesterday that there are 400 projected losses of jobs between February 

and December. So how urgently is the minister taking this forward plan announcement? That is 530. 

Senator Payne: I think the quantifiable difference between how urgently this government and the relevant 

ministers are taking this and, for example, yours is that we are in the process of commissioning 54 different naval 

vessels ranging across specific patrol boats, offshore patrol vessels, future frigates and future submarines. You, of 

course, commissioned not one ship from one Australian shipyard in six years. So that is an indication of the 

priority— 

Senator GALLACHER: I think I have heard that before. 

Senator Payne: that the government places on this matter. The development of the naval shipbuilding plan is 

making excellent progress. As I said, the minister will release it imminently. 

Senator GALLACHER: And we have 400 projected job losses on top of— 

Senator Payne: And as you know, Senator— 

Senator GALLACHER: Sorry, Minister. On top of 130 we have already lost this year. 

Senator Payne: Had you done anything about that, that might have been avoided. But it was not because you 

did nothing. 

Senator GALLACHER: Well, do something. There are 530 South Australians in the firing line in 2017. You 

have got your hand on the till. You can make a decision. 

Senator Payne: Yes, Senator. And we are working towards the cutting of steel on the offshore patrol vessels 

in 2018 and on the future frigates in 2020 at Osborne in South Australia. As I said, we have commissioned over 

50 vessels in the name of the Australian government since we were elected in 2013 to address capability issues 

that you failed to respond to in six years in government. So it is frankly a little rich for you to say this government 

is doing nothing. 

Senator GALLACHER: I did not say the government is doing nothing. 

Senator Payne: I think you might have implied that. 

Senator GALLACHER: The workforce planning happening at the moment indicates 325 permanent— 

Senator Payne: Indeed. 

Senator GALLACHER: and 75 contractors. Some of them are apprentices. The decision that needs to be 

made is to allow the workforce planning for 2018 to be made. 

Senator Payne: And that is part of the naval shipbuilding plan. It is part of the development of the naval 

shipbuilding plan and a very important part of it. 

Senator GALLACHER: So urgency. 

Senator Payne: And I said it will be released imminently. 

Senator GALLACHER: Imminently? 

Senator Payne: I am using the words of the Minister for Defence Industry, but he and I are working in the 

same space on this, and that is the case. 

Senator GALLACHER: Forget me. There are many thousands of South Australian families that would like 

the imminently to be a decision made as quickly as possible. 

Senator Payne: Yes. I am sure that they have reminded you of that many times. 

Mr Richardson: I might just add that in addition to the ships that the minister specifically mentioned, we 

have finished with the department of education work on the establishment of a maritime training college. We have 

done our work in terms of workforce requirements. We are in the process of going out to educational institutions. 

We are doing all of this in a very full and proper way. I also note that we will be commencing work on the 

additional infrastructure at Osborne in the second half of this year. So there is a lot of activity going on. 

Senator XENOPHON: I will resume. Minister, if a plan was to be finalised in 2016, why did the government 

appoint Mr Jim McDowell as the government's adviser for the naval shipbuilding plan development in December? 

As you are aware, Mr McDowell is a director of Austal, one of the companies that will ultimately compete for 

build work in the naval shipbuilding program. Can you not see a massive conflict of interest in this appointment? 



Senator Payne: Well, I think given Mr McDowell's experience and expertise, he is actually making a very 

constructive contribution. 

Senator XENOPHON: But he is on the board of Austal, Minister. 

Senator Payne: Yes. But the shipbuilding plan is not a decision-making mechanism in terms of a tender or 

anything like that. It is the development of a strategic document in relation to naval shipbuilding in Australia. It 

concerns things like workforce and skills and infrastructure. He is well placed and well experienced, given his 

background, to advise on that. 

Senator XENOPHON: But you cannot see that in the advice he gives—and I do not question Mr McDowell's 

integrity or his skills—there is potentially an inherit conflict of interest given that he is a director of Austal, a 

major, well-regarded shipbuilder in this country? 

Senator Payne: Given the nature of the plan as I have described it to you and the role that Mr McDowell is 

playing, there is not the sort of conflict that you identify. 

Mr Richardson: I might add that he is providing advice in respect of the naval shipbuilding plan. There is 

nothing in the naval shipbuilding plan of a commercial-in-confidence nature. All those major decisions have been 

made and are public. Mr McDowell is not on the Naval Shipbuilding Advisory Board. 

Senator XENOPHON: On that rationale, Mr Richardson, it should not be a problem having someone from 

the board of the ASC on the same body? 

Mr Richardson: If it related to the naval shipbuilding plan, that is right. But Mr McDowell is merely 

providing advice in respect of the naval shipbuilding plan. He is not on the naval shipbuilding advisory board, 

which is involved in all matters relating to naval shipbuilding in Australia and will over time consider matters of a 

commercial-in-confidence nature. His work in respect of the naval shipbuilding plan does not involve anything of 

a commercial-in-confidence nature. 

Senator XENOPHON: I will not take it any further other than to observe that the guidance he gives may 

influence decisions of the government that could indirectly have an impact on who gets what. 

Mr Richardson: That is not right. That is simply not right. 

Senator XENOPHON: We will leave it there. I will just go to the issue of Australian industry involvement. 

Can I please get an update on where we are with respect to the Australian industry involvement on the future 

submarine program? For instance, will we hit the 90 per cent figure that Minister Pyne foreshadowed prior to the 

election? I think it was a figure that he put out in the media. It may have been on Q&A. 

CHAIR: Do not believe what you hear on Q&A. 

Senator XENOPHON: That is from the minister. 

CHAIR: Be guarded. 

Senator XENOPHON: Minister Pyne did mention the 90 per cent figure. 

Senator Payne: Senator Xenophon, there has been no change to the commitment which I have discussed with 

you at estimates on more than one occasion and with some of our former colleagues, of course, which is to 

absolutely maximise the level of Australian industry engagement and contribution to the future submarine 

program. I am sure that between Mr Johnson and the deputy secretary of capability acquisition and sustainment 

we can take you through the work that is being done now to engage Australian industry. Mr Johnson referred to 

that earlier. He said there are 452 businesses engaged and registered in that process already. 

Senator XENOPHON: I am very happy to get that information. I want to tie it back into this important 

context. The contract has a couple of deliverables—an Australian industry capability plan and an Australian steel 

development plan. Interestingly, President Trump made all sorts of announcements just a few minutes ago about 

using steel on American projects. Drafts of these documents were due at the effective date of contract plus two 

months, with finals due at effective date of contract plus five months and effective date of contract six months 

respectively. That is for the industry capability plan and the steel development plan. Can you please advise what 

these documents say? Can you provide a copy of these to the committee in terms of Australian steel being used in 

these projects and the Australian industry capability plan? 

Mr Johnson: As you know, the Prime Minister announced that future submarines will be built with Australian 

steel. The specifications for that in terms of the future submarine are in development right now. We reviewed the 

status of the approach to qualifying vendors in Australia to provide steel of that nature as recently as last week. 

That work is going forward in a robust manner. Similarly, we are in the process of reviewing those deliverables 



for the Australian engagement with industry by both Lockheed Martin and DCNS. Those two are robust plans and 

they will come forth in due course. 

Senator Payne: I will just add to that. Given that the government's clear goal is to maximise Australian 

industry involvement, I wanted to, if I can, take you through what is underway. We have 452 companies who 

have registered interest with DCNS. They are working with 176 companies now to qualify them as potential 

suppliers. They have released over 726 requests for information to those companies. They have prequalified 39 

Australian companies as potential suppliers. Mr Johnson referred earlier to the education sector engagement. They 

have collaborated with Australian universities and research institutions to establish a framework for centres of 

excellence in terms of submarine development. So a good example of that would be the Australian Maritime 

Innovation Centre in Victoria. They have established a direct research and development collaboration framework 

with the University of New South Wales. The innovation seminars, which I think Mr Johnson also referred to, 

have been conducted, of course, in Adelaide but also in Melbourne and Fremantle. That is just in relation to the 

submarine. There is more to say in relation to the combat system with Lockheed Martin, if you want me to take 

you through that. 

Senator XENOPHON: I am grateful for that. I asked a specific question. Drafts of these documents were due 

at the effective date of contract plus two months, and the finals were due at effective date of contract plus five 

months and effective date of contract plus six months respectively. Can the committee be provided with a copy of 

these documents appropriately redacted if there are any matters of commercial in confidence? 

Mr Richardson: We would need to take that on notice. 

Senator XENOPHON: But it goes to the level of Australian industry involvement. I would have thought that 

does not— 

Mr Richardson: I am simply saying that I would need to take on notice the answer to your question. I am not 

trying to prejudge an answer. 

Senator XENOPHON: Right. I would have thought that these are matters that would be in the public interest 

and ought to be on the public record. 

Mr Richardson: I simply need to take them on notice. 

Senator XENOPHON: Just in relation to that, very quickly, how many new jobs will be created in Australia 

as a result of the signing of the design and mobilisation contract? In contrast, how many new jobs will be created 

in France as a result of the signing of the design and mobilisation contract? There are some rumours within 

defence circles that it is about a thousand jobs in France. Are there any figures that you can tell us about 

Australian jobs, and what is your knowledge of any French jobs created? 

Mr Richardson: French jobs we would need to take on notice. 

Mr Johnson: Our original estimates provided to this committee last year remain accurate. They are 1,100 

direct support jobs and about 1,700 related to the submarine construction, its combat system and that sort of thing, 

for a total of 2,800. That is a peak number that we are building towards. 

Senator XENOPHON: I really want to go to an issue of power supplies at Techport. I just want to ask one 

more question. 

CHAIR: We have been dealing with power supplies. 

Senator XENOPHON: Okay. You have been dealing with the issue. Could you tell us how many jobs were 

created in Australia as a result of the signing of the design and mobilisation contract at that stage? 

Mr Johnson: I will take that on notice and give you an accurate figure. 

Senator XENOPHON: That is fine. I will be guided by the chair in relation to this. If it has been covered, 

forgive me. How did the requirement come about for a back-up supply at Techport? Was it to come from your 

office, Minister? Did it come from Minister Pyne's office? Did it come from CASG or from Navy about the need 

for a back-up supply of power? 

Mr Richardson: We answered questions on this before lunch. 

Senator Payne: We answered questions from Senator Farrell. 

Senator XENOPHON: Okay. I will put some questions on notice about how many power failures have been 

at Techport in the last 10 years. What has been the impact of these power failures? Presumably, it is not as critical 

as, say, a smelter where, if you lose power, it can cause hundreds of millions of dollars worth of damage to the 

equipment. Have any power supply failures derailed any projects, as Minister Pyne seemed to indicate that they 

might? 



Mr Gillis: On the actual day of the power outage, the two back-up generators were only able to provide 

enough power to do a back-up of the IT system and to provide a safe exit for the workforce, because the 

remainder of the workforce that was there had to be sent home. So we actually lost productivity that day. 

Senator XENOPHON: Sure. 

Mr Gillis: So the reality is the existing infrastructure for power is not adequate, especially in the situation of a 

power failure. 

Senator XENOPHON: So do you hedge? In terms of power, you have assessed the risk? 

Mr Gillis: I did answer those questions with Senator Farrell. We are looking at that as a part of the ONT study 

at the moment. 

Senator XENOPHON: Can I ask in the next two or three minutes, Chair, with your indulgence, questions 

about the Collins costs? 

CHAIR: Go ahead. 

Senator XENOPHON: Thank you. We heard from ASC yesterday that they are achieving the required goals 

in terms of mature ready days. In fact, it is going above the benchmarks, which is terrific. Can you advise me 

whether Navy is achieving its goals in terms of task ready days? That is, of those task ready days in percentage 

terms, how many of those are being spent at sea? If you need to take it on notice, Vice Admiral, I am happy for 

you to do so. 

Vice Adm. Barrett: To answer the first part of your question, yes. To actually clarify those specific dates, I 

will need to take that on notice. 

Senator XENOPHON: In a question to the minister tabled in the Senate, question on notice 232, I asked what 

the current cost of Collins sustainment is. I know the Senate has been following these costs for a number of years. 

The costs of operating Collins rose steeply over the period 2008 to 2013. The Coles review resulted in the 

transformation, of course, of those Collins sustainment costs. The numbers provided to me for this year—$979 

million—in the next few years suggests that it is not the case. Are we actually on a trajectory of lower 

sustainment costs or increased sustainment costs? My assumption was that the costs would fall as a result of the 

Coles review. Why does it appear that the cost is not falling, or have I misinterpreted the figures? 

Senator Payne: I do not have a copy of that answer in front of me. Can I take that on notice and I will get 

back to you with some details? 

Senator XENOPHON: Of course. If the costs of the operating Collins, whether they are included in the 

budget bottom line in respect of this—I presume they are— 


Senator XENOPHON: What about the Submarine Life Extension Program, which has the unfortunate 

acronym SLEP, not sleep, necessary to extend the life of Collins beyond its original planned life to the arrival of 

the future submarines beyond 2030? Has the SLEP been costed? 

Mr Johnson: The life of type extension studies have started. The pricing of that is not complete. 

Senator XENOPHON: When will that be complete, Mr Johnson? 

Mr Johnson: It will take about a year to properly price that. 

Senator XENOPHON: A year? 

Mr Johnson: Because what we are trying to do is, of course, look well beyond the next 10 years and forecast 

that cost. In a general overview, the cost of sustaining Collins will not change dramatically in the next couple of 

years. This is a look towards well beyond the future budget estimate. 

Senator XENOPHON: But didn't Defence do a SLEP study under the previous Labor administration? 

Mr Richardson: That was a study to determine whether Collins could be extended—whether the life of type 

could be extended. That determined it could be. This is a follow-up study that is now going into the detail. The 

reason why it takes quite a while is, first of all, there is a judgement to be made about where antisubmarine 

warfare will be in the second half of the 2020s and first half of the 2030s. Where will submarine technology be 

then? What capability are we talking about? You have to make those judgements. Then you have to do costing. 

That is not a simple task. 

Senator XENOPHON: Finally, therefore, it follows that these numbers have not been included in the 

Defence budget because they have not been costed yet. 

Mr Richardson: And we are talking about cost that goes beyond the next 10 years. 



Senator XENOPHON: I look forward to that statement. 

Air Chief Marshal Binskin: I want to close something off for Senator Xenophon. He was interested in the 

ration packs. There are 43 items. 

Senator XENOPHON: I cannot use props, but you can. It is not fair. 

Air Chief Marshal Binskin: I learned from Warren King. There are 43 items in there. If you would not mind 

taking that and having a look at the quality of what is there, I think it will help your research. 

Senator XENOPHON: If it is worth over $10, I need to declare it, though. 

Senator Payne: I think you are safe there, then, Senator. 

Senator KITCHING: Mr Richardson, the questions that you have taken on notice from Senator Xenophon 

about the jobs for the DCNS submarine project— 

Senator Payne: The design and mobilisation project. 

Senator KITCHING: Could you look at the percentage of the jobs being created in Australia and those being 

created in France, particularly at Cherbourg? If you look at, I think, the Elysee Palace press releases, you will see 

that the job figures are slightly different from Minister Pyne's announcements. It certainly was widely reported in 

the French media that the jobs that would be created at the headquarters in Cherbourg are quite significant. So I 

would be interested in the percentage of those jobs. 

Mr Richardson: Sure. We will provide the figures that have been asked for. I simply note that if an 

Australian company won a contract anywhere in the world worth tens of billions of dollars, I imagine you would 

also be concerned that there might be some jobs created in Australia. DCNS has won a contract worth some tens 

of billions of dollars. I would be amazed if they did not have some jobs created in France. 

Senator KITCHING: What they are saying about it— 

Mr Richardson: So inevitably you are going to have jobs created in both countries. We will provide answers 

to the questions that we have taken on notice. 

Senator KITCHING: In one of the Elysee Palace press releases, it says that there are going to be thousands 

of jobs created. Of course, they were, as you say, equally as excited about the contract. 


Senator KITCHING: And I think the term they used is 'marriage', that they are married to the Australian 

Defence Force, which is very nice and very French in its romanticism. But I would be interested in the 

percentages of the jobs. 

Mr Richardson: And, shock horror, Senator, we are actually going to have some Australians moving to 

France— 

CHAIR: Oh, my God! 

Mr Richardson: to work on the future submarines. Now that is an interesting question. Should any 

Australians be allowed overseas to work in a foreign country? We are going to have French men and French 

women coming to Australia to work on the submarines. So we are going to have a lot of movement, and we will 

get the answer to your question. 

Senator KITCHING: Vive la France. 

CHAIR: Senator Moore, back to the rat packs. 

Senator MOORE: I want to ask a question about the food packs. It stimulated my interest when you threw a 

ration pack over to Senator Xenophon. Can you confirm, Mr Richardson, that the packs that Australian personnel 

have are the same as the packs that New Zealand personnel have? 

Mr Richardson: I do not know. I would need to take that on notice. 

Senator MOORE: Can we check that? 


Senator MOORE: We are packaging them up. I would just like to know. 

CHAIR: And it is possible that New Zealanders eat more lamb than Australians. 

Senator MOORE: Maybe less chocolate. If you can find out whether the New Zealand packs are the same, 

that would be very useful. 

CHAIR: Thank you very much, Senator Moore. 

Senator FARRELL: I have some questions regarding the Centre for Defence Industry Capability. 



Mr Gillis: I am the co-chair. Kate Louis, who is also coming to the table, can answer some of those questions. 

She is coordinating that taskforce. 

Senator FARRELL: Can you tell us how the implementation of the first principles review is tracking in 

establishing mechanisms like the capability acquisition and support group? 

Senator Payne: That is quite a different question, Senator. 

Senator FARRELL: From which? 

Senator Payne: Well, from the question about the Centre for Defence Industry Capability. 

Senator FARRELL: In what sense? 

Senator Payne: It is not related. 

Senator FARRELL: Well, can somebody answer that question? 

Senator Payne: We can answer FPR questions, certainly. 

Mr Richardson: Sorry, Senator. Could you say that again? 

Senator Payne: I might have misunderstood you, Senator, but I do not think they are related to the CDIC. 

Senator FARRELL: Well, I was asking for a response to the implementation of the first principles review 

and how it related to the capability acquisition and support group. 

Senator Payne: Sustainment. 

Mr Richardson: First of all, there were 75 recommendations to the first principles review. One of those 

recommendations was that the old Defence Materiel Organisation be wound into the department. So the old DMO 

no longer exists. It has been replaced by the Capability Acquisition and Sustainment Group. There are a number 

of recommendations which relate to what is called the capability lifecycle in terms of how capability 

recommendations are considered within the department. In that context, it recommended the establishment of a 

couple of new committees, including a new investment committee chaired by the VCDF, on which sits 

representatives from both finance and Prime Minister and cabinet. There were a range of recommendations 

relating to the workforce in the Capability Acquisition and Sustainment Group. Work is continuing in respect of 

the implementation of that actual recommendation. The other recommendations relating to behavioural matters 

apply to the capability area as it does to the rest of the organisation. Many of the other recommendations which 

relate across the enterprise also relate to that group. But there were some specific recommendations relating to 

workforce and skilling and to the way in which special project offices are set up. They are unique to the CAS 

Group. We are well on the path to implementing all of them. 

Senator FARRELL: Can you give us perhaps an indication of how the goal of establishing a strong strategic 

centre is progressing? 

Mr Richardson: That has progressed pretty well. As part of that, there is a defence committee on which sits 

the CDF and myself and about four or five others. There is the investment committee chaired by the VCDF. There 

is the business enterprise committee chaired by the associate secretary Brendan Sergeant. Two groups were 

consolidated into one. The old intelligence group and the old strategic policy group became one. As part of that 

group, we have established what is called a contestability division. That was specifically recommended by the 

first principles review to provide arms-length contestability of matters coming before the investment committee. 

That is established and is working. The industry policy matters were consolidated from across the department and 

brought into an industry division. Kate Louis heads that up, and that is functioning. There was a redo of some 

matters within the VCDF group. So the strong strategic centre is now pretty well established. 

Senator FARRELL: Can you tell us what the KPIs were to achieve the outcomes for the strong strategic 

centre? 

Mr Richardson: Well, they were not. The first principles review did not recommend a list of KPIs, but it 

comes down to one—the strategic centre being at a high level, bringing into it investment decisions with armslength 

contestability. As said, I think that is working pretty well. They did not specifically mention KPIs, which 

we will tick off on a yearly basis. 

Senator FARRELL: But you are satisfied that progress is being made? 

Mr Richardson: Progress is certainly being made. I would not pretend that we are where we will eventually 

want to be. But we are along way down the track, and I believe we are beyond the point of return. 

Senator FARRELL: Can you tell us what has been the overall experience of the first principles review in 

terms of procurement processes and industry feedback? 



Mr Richardson: The industry feedback, I think, has been very positive, I think it is fair to say. Simply for the 

record, that comes down to the work of Kate Louis and her team. I have personally been pulled up by defence 

industry people who have told me, and I think they have said similar things to the minister and the Minister for 

Defence Industry, about the work being done by Kate Louis and her team. That is the feedback I am getting. So I 

think defence industry have welcomed a more active defence engagement of defence industry. Again, it is early 

days, but I think, certainly on the 12-month experience, the record is pretty impressive. 

Senator Payne: Part of that has to go to the value of the defence industry policy statement, which was 

released with the defence white paper in February last year. It set out a number of the government's plans in that 

regard, particularly the government's decision to recognise in a formal way Australian industry as a fundamental 

input to capability. I can attest to the fact that as recently as yesterday, amongst industry representatives I met at 

Avalon at the early days of the air show, there has been very significant recognition of the difference that this has 

made in terms of the engagement between defence and industry in this country. 

Senator FARRELL: Thank you, Minister. When you are getting advice back from industry, who gives you 

that feedback? 

Mr Richardson: Well, in my own case, it is CEOs and it is the Australian Industry Group and the defence 

component part of that. That is essentially who it is. 

Ms Louis: I will add to that. Of course, we have set up the Centre for Defence Industry Capability and the 

advisory board now, which has representatives from primes and SMEs and, of course, is co-chaired by the deputy 

secretary of CASG. They have been a great sounding board for us to look at our sectoral policy issues and provide 

feedback. 

Mr Richardson: I think we should put on the record the assistance we have received from the Department of 

Defence and the good work that has been going on between defence and me and the industry department. 

Senator FARRELL: That board you mentioned is the board that was established on 22 October? 

Ms Louis: Yes. 

Senator FARRELL: Is one of the members of that board former senator Johnson from Western Australia? 

Ms Louis: Yes, he is. 

Senator FARRELL: Could you not find somebody who had faith in the Australian ship building industry to 

put on the board? 

CHAIR: That is not fair, Senator Farrell. A question was asked of the minister at the time whether he had 

faith in the senior management of ASC. Stick to the point. He did not express any lack of support for the entire 

Australian ship building industry. 

Senator FARRELL: I strongly dispute that. 

Senator GALLACHER: He would not know to if you needed him. 

Senator FARRELL: He said we could not build a canoe. 

CHAIR: He said he had no faith in the senior management of ASC. 

Senator FARRELL: There must be some former member of the government who can have some confidence 

in the Australian ship building industry. 

Senator Payne: Senator, you can make as many political observations as you like. It is entirely— 

Senator FARRELL: What about Jamie Briggs? Would he not have been a better appointment? 

CHAIR: The minister is answering the question now, Senator Farrell. 

Senator FARRELL: She is interrupting my questions, I might add. 

Senator Payne: What have I done now? 

Mr Richardson: I would simply put on the record, for what it is worth, Senator, that it is the experience of 

those of us along this table who work in the ADF and the Department of Defence that when former senator 

Johnson was the Minister for Defence, he pressed us pretty hard in terms of Australian industry engagement. 

Senator FARRELL: Look, he came out publicly and made a statement about the Submarine Corporation. He 

said they could not build a canoe. 

Mr Richardson: Could not build a canoe? 



Senator FARRELL: If part of his job is to try and promote this industry overseas, for instance, the first thing 

they are going to do is Google his remarks about what he thinks about the ASC. There must have been some 

member that lost their seat at the last election in the government who you could have put on the board— 

Senator Payne: Did you add yourself? 

Senator FARRELL: if he did not have that sort of reputation and belief in the ability of Australians to build 

submarines. 

CHAIR: We are disagreeing. 

Senator Payne: I think you will find, Senator, that the appointment of Mr Johnson to the Centre for Defence 

Industry Capability is a very valuable one which is reinforced by his extensive experience and engagement with 

defence industry in this country and internationally. The centre at the moment has, I think as at 8 February, 

received 42 applications for services, of which 36 have been approved. They have progressed to engagement 

planning, with the capability advisers in the centre. We have one application for a capability improvement grant 

received and approved. The Centre for Defence Industry Capability portal is processing 257 emails— 

Senator FARRELL: Minister, I am not asking questions about those things. 

Senator Payne: regarding innovation. So it is working very well, Senator; that is my point. 

Senator FARRELL: Okay. Can I ask a few questions about the appointment? 

Senator Payne: Mr Johnson is making a very useful contribution. 

Senator FARRELL: Minister, can I ask a few questions about the appointment? 

Senator Payne: I am sure you will. 

Senator FARRELL: Who made the appointment? 

Senator Payne: The government. 

Senator FARRELL: Was it the minister for industry? 

Senator Payne: The government made the appointment. 

Senator FARRELL: So it was a cabinet decision? 

Senator Payne: I believe so. 

Senator FARRELL: On the advice of whom? 

Senator Payne: The appointment of the entire board of the Centre for Defence Industry Capability, if I am not 

mistaken, was a decision of the cabinet. 

Senator FARRELL: Was there a merit selection process undertaken for the appointments? 

Senator Payne: Not that I am aware of. 

Mr Richardson: It was appointed similarly to most boards that I have seen appointed by successor 

governments. 

Senator FARRELL: Can you tell us what former senator Johnson's annual director's fee is? 

Senator Payne: It would be the same as everybody else's. I will take that on notice and we will come back to 

you. 

Senator FARRELL: Thank you. Can you tell us— 

Mr Richardson: It is set by the Remuneration Tribunal, so it is the same for all the directors. 

Senator FARRELL: But there are different rates. 

Senator Payne: We will come back and tell you. 

Senator FARRELL: I was simply making the observation, Minister, that there are different rates for different 

boards. 

Senator GALLACHER: They seem to be a bit sensitive. 

CHAIR: Well, Senator Farrell has every right to be sensitive because nobody offered him anything when he 

was in office. So I agree that Senator Farrell is a bit sensitive. 

Senator FARRELL: Is former senator Johnson entitled to claim expenses as a director? 

Senator Payne: Mr Johnson, yes. 

Mr Richardson: Only those that are allowable by the Remuneration Tribunal. 

Senator FARRELL: Do you happen to know what they are? 



Mr Richardson: We will take that on notice. 

Senator FARRELL: If he is allowed any extra expenses, can you tell us how much he has claimed from the 

time of his appointment? 


CHAIR: Thanks, Senator Farrell. 

Senator FAWCETT: I have a few questions for the Chief of Army. Good afternoon. I will return to my 

theme of following through with outcomes from comments in the portfolio budget statement. The Army 

Aboriginal Community Assistance Program had a program in Laura last year. I believe that Toomelah is the 

project for this year. I am just wondering if you can update the committee on what the outcomes were in Laura 

and what you are hoping to achieve in Toomelah. 

Lt Gen. Campbell: Last year at Laura, we spent approximately six months with a multidisciplinary team 

deployed to the Laura community and worked with local groups. We worked in cooperation with a range of other 

government departments at state and federal level and with sporting organisations to both do some development 

work on the infrastructure of the Laura township and surrounds as well as support two community initiatives. I 

will talk to both of them. There were covered areas developed as an opportunity for young people to use them as a 

sporting facility. It could be a basketball court or it could be a volleyball court under cover. A number of road 

sidewalks were developed so that people could move safely off the road. We extensively redeveloped the town 

sewerage system so that there was a mechanism to allow for the use of a natural sewerage renewal process that 

was near the township and had an estimated life of type of about 25 years with plenty of expansion capacity in it. 

We used local persons to help where they could to become more familiar with a bit of on-the-job work in basic 

elements of carpentry, earthwork preparation and other minor infrastructure engineering activities. We then had a 

line of activity focussed on supporting the development of basic carpentry and odd job skills. We taught and 

facilitated knowledge of cooking and good health and nutrition habits and information. We also had sporting 

workshops for the local kids and reading activities, displays and a band presence on a number of occasions. It was 

an effort to make some positive contributions to the infrastructure of the community and to make a positive 

introduction to some habits of healthy lifestyle that could support that community. It is always a small step, but I 

think, with goodwill, the efforts of the community and with ongoing initiatives that we see at local, state and 

federal level, it makes a difference. 

That kind of approach has been applied across 22 years of effort all over the country. The identification of 

locations typically is 18 months to 24 months ahead so that the right planning can be undertaken with the 

community, the outcomes are what the community wants and those outcomes can be designed in ways that are 

most sustainable. At the same time as we are doing that, we are looking back to ask the question, 'What can we 

learn from our earlier efforts?' Infrastructure or engagement activities that have sustained and had longevity in the 

community are clearly the kinds of activities that are more valuable for the long-term future of the community. 

In combination with the Department of the Prime Minister and Cabinet, we have asked to engage with 

communities throughout the 22-year history of the AACAP program to look at and reflect on what we are 

learning and how we are maturing our approach both in the engagements in those soft skill areas as well as in the 

hard infrastructure. And that has seen, over the course of a number of years, the introduction of basic sport to 

medical facilities. In Laura, there were dental clinics. There was the introduction of sporting activities and 

hygiene, nutrition and other workshop activities. 

I would encourage any members of the committee who have the opportunity to visit AACAP to do so. It is on 

each year. It is an extraordinary experience because it is great young people from many different parts of our 

society coming together to do something very, very good for our country. We have the next couple planned. I do 

not have the detail with me now, but it is the same kinds of community infrastructure development as well as lines 

of engaging people, setting role models and trying to make a contribution to opportunity, ideas and initiatives that 

might generate opportunity in the community. 

Senator FAWCETT: Thanks, General Campbell. I look forward to your update on Toomelah perhaps at the 

end of the year when that is complete. I think it is one of the most successful underpublicised programs that Army 

runs in terms of working with indigenous Australians, so thank you. 

Lt Gen. Campbell: Thank you. 

Senator GALLACHER: Are you going to Oak Valley, or has that already been done? It is a South Australian 

community. 



Lt Gen. Campbell: There is Yalata community. We are doing some work there. We are going to do some 

more work through the course of this year, and then we go to Toomelah, where Senator Fawcett mentioned. 

Senator GALLACHER: I visited the Oak Valley lands and it was absolutely brilliant. It is fantastic. 

Lt Gen. Campbell: We do have the AACAP regularly on the parliamentary visits program to ADF activities 

for members of parliament. I emphasise that if it is not on the program but someone wants to visit, we will always 

accommodate that. 

Senator FAWCETT: Thank you. I take you to table 72 in the PBS, which is the current status of your top 30 

projects. There is project AIR9000 Phase 5C. You will probably know this, General, without having to get your 

table. It relates to the additional Chinook. The PBS indicates that the FOC should be declared in January this year. 

I am wondering whether that was actually achieved in terms of declaring the final operational capability for the 

CH-47 Foxtrot. 

Mr Gillis: General Mathewson is just coming into the room. He is the head of the helicopter systems division. 

He will have that information to hand. He will here in about one minute. I think I have the answer, but we will 

wait for the helicopter systems division officer. The introduction of the Foxtrot Chinook has been an extremely 

successful program. 

Senator FAWCETT: I have some other questions that will relate probably to General Mathewson's area, so I 

will wait until he comes in. There was an article over the weekend talking about political correctness in the army. 

I wonder whether you would like to make any comment on that while we are waiting. 

Lt Gen. Campbell: I am familiar with the article. It was speaking to the question of initiatives the army has to 

seek the greater participation of women in the army, as indeed you see in the air force and navy also. This is not a 

matter of political correctness. It is easy to write newspaper articles of that manner. The Australian community is 

roughly fifty-fifty men and women. I profoundly believe that 50 per cent of the talent of our nation is in the men 

and 50 per cent of the talent is in the women. At the moment, the Australian Army has 12.7 per cent women. That 

is more than it has had before, but it is not as much as I would like. I do not think that we will ever get to fiftyfifty. 

I am not seeking to get to fifty-fifty. I do not have a target destination, but I do aspire to see the army get to 

about 25 per cent participation of women. But it is a very simple point. I want the best talent available from the 

Australian community serving in the Australian Army, as do I know my service chiefs want similarly for the Air 

Force and Navy. At 12.7 per cent, I am not getting our fair share of Australian talent from half of our gene pool 

into the army. That is a question that is important to me, because it says, 'I don't have an army that is as good as it 

could be because we are not drawing on the full talents of our nation.' 

There are only two things you need to do in the army to find yourself serving in any particular appointment: be 

a volunteer and pass the physical employment standard. We worked with the Defence Science and Technology 

Group for three years to objectively identify that standard for each of the corps and areas of the army, from the 

infantry and field artillery to ordnance intelligence, signals and everything in between. So every Australian who 

volunteers and can pass the relevant physical employment standard is welcome to serve in the Australian Army. I 

would claim, with my Air Force and Navy colleagues, that we have the best training system on the planet to 

produce sailors, soldiers and air men and women. I want Army's fair share of our nation's talent and I am not 

getting it. I want more women. 

Senator FAWCETT: General Mathewson, I will repeat the question. I was asking about the Chinook project 

AIR9000 Phase 5C. The last PBS said that we were expecting an announcement of FOC in January this year. I 

wonder whether we have actually achieved that. 

Major Gen. Mathewson: At this stage, the Chinook program has been a fantastic success. The program has 

been under budget and on time yet, due to the broader fundamental inputs to capability, we have not quite cracked 

FOC at this point. But it is very close to being declared. The documentation is being developed as we speak 

before being presented to the chief for his consideration. 

Senator FAWCETT: In terms of numbers of crews and things, I am aware that at a time when we have very 

high operational tempo with the D model Chinooks, the ability to back up and train was somewhat stretched. Now 

that operational tempo has changed and we have an almost entire fleet of Foxtrots, where are we at in terms of 

each of those fundamental inputs? 

Major Gen. Mathewson: Indeed. There was quite a bit of pressure on the aviation community, a fairly small 

community within Army. There was a lot of pressure on our air crew. In addition to that, we had a very successful 

program to acquire a further three CH-47 Foxtrot conducted by broadly the same team with no additional 

resources. So that has put a fair bit of pressure on the community within CASG and within Army to deliver that 



capability of 10 aircraft. But it is absolutely one of our best programs in the aviation sphere. FOC will be declared 

very soon. 

Senator FAWCETT: Thank you. While you are still at the table, page 166 of the PBS deals with the armed 

reconnaissance helicopter weapons system. We have had in this committee and the joint committee's very good 

feedback from people about the performance of that weapons system after Exercise Hamel and others. I notice 

that one of the goals in the PBS is the refinement and implementation of measures to reduce through life costs or 

costs of ownership. I wonder whether you can give us an update on what you have put in place and where that is 

at. 

Major Gen. Mathewson: Certainly. The original contract that we put in place with Airbus was a 15-year 

contract. We found that the cost of ownership on that product was growing over time. In 2013, we commenced a 

strategic review with Airbus. We have changed the structure of the contract now to reflect a sharing of the risks. 

We are specifically focused on approximately half of the cost of supporting Tiger, which is now linked to the 

generation of rate of effort, which is army's objective, CASG's objective and industry's objective. So as we deliver 

an increased capability there, the relationship with costs will match the delivery of the capability to Army. What 

effectively that will do is reduce the cost by at least one-third from where it was, say, three years ago. So that has 

been really quite successful. At the same time, though, I think everyone would appreciate that this is a very 

complex weapons system, so we have a series of systems that need to be upgraded . Certainly not only the aircraft 

but our simulated training environment needs to be upgraded. That is an increased cost. So when you look at the 

broad costs of Tiger, you are not just looking at the aircraft and its support but its upgrade and the work that 

Airbus do in supporting the product as one of our outsourced suppliers. 

Senator FAWCETT: Can I assume that that upgrade cycle is no different to a spiral upgrade circle of many 

other weapons systems? 

Major Gen. Mathewson: No. Indeed. It is precisely the same thing that we will see on JSF that we currently 

see on Hornet. Every complex system is going to go through a much faster cycle than we have been used to in the 

past. Everyone recognises that computer systems do not have a lifecycle as long as mechanical components. We 

have seen that certainly in Tiger after operating it for in excess of 10 years. 

Senator FAWCETT: Sure. I can see the chair is getting fidgety. He is going to wind me up. I have one last 

question. The PBS mentions that you are hoping to conduct first-class flight trials in the first quarter of this 

calendar year. I am just wondering where you are at with planning for that. 

Major Gen. Mathewson: Yes. Absolutely. First-class flight trials are being conducted as we speak on HMAS 

Canberra. To date, the feedback has been positive. At the same time, we have our MRH90s expanding their ship 

helicopter limits on the same ship. 

Senator FAWCETT: Thanks. 

Senator RHIANNON: Minister, have you hired additional media or public relations staff or consultants who 

cover that area to manage the contamination at Williamtown and the contamination issue generally at other bases? 

Senator Payne: In my personal office? 

Senator RHIANNON: Within the department. The question was to manage the contamination issues at 

Williamtown. 

Senator Payne: I will ask the deputy secretary of the estate and infrastructure group to come to the table. 

Senator RHIANNON: Thank you. 

Mr Grzeskowiak: The way we are managing public relations and the interactions we have with the 

community in the main is through our own people. We have a lot of community reference group meetings out at 

the various sites that we are engaged in. We do that ourselves. That is the main mechanism for our engagement. 

We do have some people back in the office who would be helping us with the messages we need to be getting 

across to people, as would other departments engaged in the process—for example, the Department of Health. 

Senator RHIANNON: You used the term 'in the main'. Does that mean that you have hired PR, or public 

relations, staff or consultants to help in that area? 

Mr Grzeskowiak: I would have to check. I would have to take that on notice in detail. We may have some 

people who have been helping us with messaging for that. It may be that other departments are doing that as well, 

but I would have to go and look in detail just to confirm. 

Senator RHIANNON: So you can take that on notice? 

Mr Grzeskowiak: I can. 



Senator RHIANNON: Thank you. I notice that the meetings held at your RAAF base at Richmond were 

stated in the Hawkesbury Gazette as one-on-one meetings with Defence. Could you describe what that means? I 

know some consultancy firms do this. They do not have a public meeting where everybody is together, but they 

take the residents and meet with them separately. Is that what you mean by one-to-one meetings? 

Mr Grzeskowiak: I can speak from first-hand experience for that meeting. I was the Defence individual who 

led that meeting supported by a range of other organisations—for example, the local environmental protection 

agency, local health people and the like. So what we are doing when we engage in community is talk to them in 

smaller groups. So the way we will run the session is that we will hire the hall or something that is convenient. 

We will set up tables. There would be a table for Defence. There will be a table from our consultants who are 

doing environment investigation, if we have them in place. There might be a table from the local health 

authorities et cetera. People can come along and talk to the people at those tables about any issues on their mind. 

During the session—and they normally run for an afternoon—probably twice we will do presentations. We 

advertise the times of the presentations. When we do the presentation, it will be a Defence person giving a 

presentation. In the case of Hawkesbury, around RAAF base Richmond last year, what we were saying there was 

that we had done some preliminary sampling. We had those results. We are going to be back this year to run a 

more detailed investigation. So we are trying to engage the community in a way that enables people to come 

along and hear what we have to say and to sit down and talk one on one if they want to with somebody who is 

more closely associated with the field of interest that they might have, be it health or environment or whatever. 

Senator RHIANNON: When you say presentation, at that point, did you get everybody together? It is being 

written about in the research how consultants are advising departments these days to not get the public all together 

when you have these challenging situations. Do you get everybody together at any stage? 

Mr Grzeskowiak: Yes, we do. We did not have consultants and advisers at that. It is a strategy that we 

decided upon ourselves because we feel we get much more effective engagement. So we will advertise that we 

have a community drop-in session from whatever—two o'clock until six o'clock—and that there will be 

presentations at three o'clock and five o'clock, or whatever the times would be. As I said, I did the Richmond one. 

We did not have a large turnout from the community, but everyone that came had the opportunity to listen to a 

presentation and separately talking to either me or the various other organisations that we had present. What we 

found and what we have had in feedback from people as we have done a fair amount of this is that a lot of people 

are not confident in, if you like, a huge auditorium to put their hand up and ask a question. They feel much more 

confident to just approach someone who is behind a desk saying 'Health' or whatever. We get very good 

interaction at those meetings. So that is the process that we have adopted. It is a decision we made ourselves 

following the experience we have gained over this process. 

Senator RHIANNON: Thank you. I will go to question on notice No. 81. When I printed it out, it was page 3. 

At the third paragraph from the bottom, you make reference to a study. You state: 

A second stage of the study is expected to include focus groups, a survey, and an epidemiological study related to PFAS 

exposure of residents in and around affected communities. 

What is the point of the focus groups? 

Mr Grzeskowiak: That will be in reference to the epidemiological study that was announced by government 

in June last year that will be taking place at Williamtown and Oakey. The Department of Health have the lead on 

the epidemiological study, although the work is being funded by Defence. The initial approach to the community 

at Williamtown and Oakey has occurred. Department of Health representatives have held community engagement 

sessions there to try to talk to people about the epidemiological study and how that will work. I think as part of 

that process the people doing the study from the Australian National University Centre for Epidemiology and 

Population Studies, who have the contract from health, were made to sit down and talk to people about their 

lifestyles, I guess. I am not an expert in epidemiological studies. So there will be significant engagement between 

the people doing the study and individuals who volunteer to take part in the study. 

Senator RHIANNON: So the focus groups are part of the epidemiological study that is being conducted? 

Mr Grzeskowiak: That would be right. 

Senator RHIANNON: Thank you. This is the Department of Health, but you have probably been involved. I 

am referring here to the voluntary blood testing program. I was hoping that you could also explain this. What it 

states in the first paragraph is that it is being offered to people who live or work, or who have lived or worked, in 

Williamtown and Oakey. Why only those two areas? 

Mr Grzeskowiak: It was a decision made at the time of the announcement that these were the areas we were 

heavily engaged with. So the current scope of blood testing is for Williamtown and Oakey areas. As you are 



aware, they are the areas in which we are the most advanced in terms of having concluded significant 

environmental studies, significant ecological studies and significant human health risk assessment studies. So that 

is the position at the moment. The blood tests are available, again, through the primary health care network. 

Senator RHIANNON: But that becomes illogical at that point. Just because you have conducted most of the 

tests there does not mean that that is where you should be giving the free tests to people who have lived or worked 

there. 

Mr Grzeskowiak: Our blood test is something that has evolved throughout this process. It was not something 

that was at the beginning of the process. So the Department of Health has the lead on the blood tests. 

Senator RHIANNON: But it has only evolved because—let us be frank—the department has come under 

enormous pressure. At first there was a lot of resistance to doing it. Is it because Williamtown and Oakey have 

more active communities? At the moment, there is not a logical reason why you are only doing it for two 

communities and it is not happening in the other communities. 

Senator Payne: If you recall—and you have obviously been part of the inquiry on these issues—there were 

community requests for blood testing in those areas. It is important to note that in both those areas exposure 

pathways have been established and identified by the testing process that Mr Grzeskowiak refers to, which is a 

part of the health evidentiary process. It is being run by the Department of Health, but of course if the government 

is approached by other communities who are concerned and who wish to explore that, then that would be 

considered from the Department of Health's perspective. It is not being administered by the Department of 

Defence. 

Senator RHIANNON: But, even on that, the Department of Defence has admitted total liability here. You 

have never questioned that. That has been good, and we have thought we were getting somewhere at that point. 

You talk about exposure pathways, but how you have answered that question, Minister, is again putting the 

responsibility back on the local people to come forward to request. We have just heard evidence that often people 

are reluctant. They do not know about the chemicals. They are not sure. Some of them do not even know they are 

exposed. Should not the government, having admitted total responsibility, be proactive with these communities, at 

least providing them with the voluntary blood testing? 

Senator Payne: Well, it is a matter for the Department of Health. If you want me to take that on notice to seek 

the advice of the health minister, I will. 

Senator RHIANNON: Thank you. Please take that on notice. I want to return to the Hawkesbury. 

Senator Payne: To RAAF Richmond? 

Senator RHIANNON: Yes, sorry. To Richmond. It keeps coming up under Hawkesbury, where I have it 

filed. This is my first question: when did you first become aware that contamination was occurring at this base? 

What is your year for that first occurring? 

Mr Grzeskowiak: As you are aware, we have been doing desktop studies for a while now looking at areas 

where historically the firefighting foams that we are talking about have been used. As you might expect, airfields 

is one of the obvious places—not only military airfields but of course civilian airfields and a range of other 

industrial sites across the country. So we were aware that these firefighting foams would have been used at 

Richmond. From the desktop analysis, it popped up as one of the places that we should do some further analysis 

at. So in the middle of last year, we ran a very quick sampling program at Richmond, I think between April and 

July. We got those results a few months later. That showed us that there were detections of PFAS chemicals 

outside of the base. We deliberately did the tests outside of the base because we were most interested to see and 

concerned to see where these chemicals may have moved off the base. 

Senator RHIANNON: So the middle of last year is when your first testing occurred? 

Mr Grzeskowiak: That is when the first testing occurred. The results came in a few weeks later. So that is 

why we went to the Hawkesbury, close to RAAF base Richmond, last year and had the community information 

session—to advise people of what we had found and to explain a little about what we know of the historical use 

of these chemicals globally, the current state of play in terms of health effects and that we would be back fairly 

early this year for an investigation. In fact, next week, on 8 March, I think, I will be back in the Hawkesbury at 

the next community information session talking about the investigations that are due to commence there very 

shortly. 

Senator RHIANNON: I want to stay with this issue of the date. Are you aware that a submission to the 

Senate inquiry by former defence director of environmental impact management Colin Trinder said he had 

conducted the first review into problems with the firefighting foam in 2003? He said in 2002 he had received 



reports about fish kills where the foam had got into the waterways adjoining the Richmond and Amberley RAAF 

bases. 

Mr Grzeskowiak: I am certainly aware of Colin Trinder and the submission that he made to the inquiry. As 

you would be aware, until some years ago, Colin Trinder was a member of the defence environmental group. So, 

yes, we are aware of that. 

Senator RHIANNON: Considering the way you have just answered the question, when I asked you about a 

date and you said six months ago, are you saying that what Mr Trinder said is not true, or did you forget? Why the 

contradiction? 

Mr Grzeskowiak: No. Until he made that submission to that inquiry, the information that he brought to bear 

at that point was not widely known by the people who are currently working with this problem. We have said all 

along that Defence started taking action on these chemicals of concern from around 2003. In 2004, decisions were 

made to move away from the legacy product, the 3M Light Water, and use a different product, which is called 

Ansulite. The transition occurred from 2004. As I have previously said in these forums, we knew these foams 

were used, but I do not think anybody really appreciated that the potential for the contaminants to spread outside 

of bases was as much as we have subsequently discovered. 

Senator RHIANNON: We have to go back to the issue of dates. You really are starting to enter a grey area. I 

have asked you twice about the Trinder reference. Did you forget about that reference, or are you saying that it is 

not accurate? You said very clearly that the first testing was six months ago, which puts us in the middle of 2016. 

Mr Grzeskowiak: The first testing we had done, certainly while I have been involved, was six months ago at 

Richmond. We deliberately tested off the base to see if the PFAS chemicals had moved off base. We found low 

levels of the chemical off the base. That is why we are moving into a more in-depth on and off base investigation. 

Senator RHIANNON: You have just used the term 'while I have been involved'. That was not how I phrased 

the question. You have made a study of the whole thing. Again, this is a specific question about Trinder. Were 

you aware of the Trinder study? I understand you have said yes. 

Mr Grzeskowiak: Yes. I am aware of it. 

Senator RHIANNON: You have said yes. Do you accept the information in that submission, or are you 

disputing the accuracy of it? 

Mr Grzeskowiak: No. I am not disputing the accuracy. I have given you my answer about the testing we have 

done at RAAF base Richmond and outside of RAAF base Richmond. I think the issue now is that we are moving 

forward with a more detailed investigation. We are engaging with the community again next week. We want to 

really understand at the various places where these chemicals were used if there are any issues and how we fix 

them. 

Senator RHIANNON: Thank you. Minister, will you be honouring the promise you made during the 2016 

election campaign to visit the Williamtown community post the election? 

Senator Payne: Yes. At some stage. I know that the department is heavily engaged. I might ask Mr 

Grzeskowiak to talk about some of the work that is being done in remediation in particular at Williamtown. You 

would know that we have installed—and it has been operating, I think, since September or October last year—a 

very significant water treatment plant on— 

Senator RHIANNON: Lake Cochran. 

Senator Payne: Lake Cochran. 

Senator RHIANNON: I am happy if you take this on notice. I want to go back. I did ask you a specific 

question. It is eight months since the election, Minister. I really think, just for your own standing, surely you 

should give a commitment. It is more than eight months since you made that promise. 

Senator Payne: Yes, Senator. 

Senator RHIANNON: Are you saying you will go in six months, or are you going to keep it open-ended? It 

is not a good look. 

Senator Payne: Currently I have spoken to, very briefly, Ms Swanson, the local member. I am happy to visit 

at an appropriate time. 

Senator RHIANNON: Thank you. This is a quick question. The Williamtown community reference group 

meets in secret. Why does it have to meet in secret? 

Senator Payne: I think it is a reference group conducted by the New South Wales state government, but I 

might be wrong. 



Senator RHIANNON: So it has nothing to do with you? 

Senator Payne: We attend by invitation. As I understand it, it is a— 

Senator RHIANNON: So you have made no request for it to be in secret? You would be happy for it to be 

public? 

Senator Payne: Of course not. 

Senator RHIANNON: You would be happy for it to be public? 

Senator Payne: Well, I am happy with whatever arrangements the New South Wales government think are 

appropriate. It is an organisation that they operate. 

CHAIR: Thank you, Senator Rhiannon. On that same topic is Senator Kitching. Then I will go to Senator 

Kakoschke-Moore. 

Senator KITCHING: Minister or Mr Richardson, could you commit to a progress report, perhaps, on the 

contamination and the remediation process? Is that possible? 

Senator Payne: Indeed. We have a lot of work that has been done by the defence department with regard to 

our own sites where remediation has commenced. We would be happy to provide an update on that on notice. 

Senator KITCHING: That would be great. I want to ask a technical question. Is it where there are water 

sources where the water table is high, for example, where there is a particular problem? If it is on air force 

bases—in airfields, for example; that is where it has been used—it may well have been used in civil aviation. I am 

thinking about that. 

Senator Payne: Senator, that is most definitely the case. This is not a matter isolated either in Australia or 

internationally to defence facilities. Civilian airports, firefighting services such as rural firefighting services where 

other firefighting foams have been used, and commercial properties where there has been training on the use of 

firefighting foams for extinguishing liquid fires are also vulnerable in that regard. It is most definitely not a matter 

contained to defence sites. 

Mr Richardson: I might add that it was also used in waterproofing of clothing. It is also used in what is put 

on carpets for stain prevention and the like. 

Air Chief Marshal Binskin: Scotchgard. 

Senator GALLACHER: Teflon. 

Senator Payne: I will ask Mr Grzeskowiak to respond in relation to your questions about water tables and 

those sorts of circumstances. 

Mr Grzeskowiak: So the issue is interesting. Part of the reason why the investigations we do have to be so 

thorough is that we need to understand how the chemical moves in the environment. It is not a chemical that can 

evaporate, so it does not move in the wind, but it can soak into soils and then travel with water through various 

water courses. What we have learned through the detailed investigations that we have done so far is that the way 

the chemical moves in the ground is not always obvious. So we need to do significant hydrogeological studies. 

The consultants that we use to do this have the highest pedigree in terms of qualifications. They will access all the 

available hydrogeological information that exists. They conduct extensive research into the mapping of how the 

chemicals flow around in the water. In some cases, it is obvious. If it is surface water, it runs through a drain. That 

is one mechanism. 

What we have discovered is that certainly if water goes underground, particularly in an area like Williamtown, 

which has got a very shallow water table that at times essentially reaches the surface, the flow and movement of 

these chemicals is unpredictable. So a lot of work has to be done to understand that. It is interesting to note that, 

for example, at Williamtown, of the properties where we have sampled water, something like 75 per cent of them 

do not have detects. I think at Oakey, 40 per cent of the properties we have sampled do not have detects. So we do 

a lot of work to map, in the case of a water table, where the underground plume might go. All that information is 

made publicly available when our reports are finished. So the potential for exposure for a person depends 

critically on the exposure pathway. The most common exposure pathway would be through drinking water that 

contains these chemicals, and the most common mechanism for that to occur would be by drinking bore water 

that has been extracted from the ground where the chemical has found its way into an aquifer. Some areas that we 

are looking at would have those sorts of features. Some would not. So if there is no exposure pathway, there is no 

exposure. That is why we need to do the very detailed examinations. 

I will talk a little more about the chemical. These chemicals are ubiquitous in the world. They have been used 

extensively since the 1950s for a whole range of applications. The majority of the chemicals that have been 



produced have been used for two applications in particular. One is as surface coatings to prevent oil or water 

flowing through fabrics. So they are your stain resistant fabrics, carpets, curtains and furnishings and the like. The 

second large use is in food packaging. So until 10 or 15 years ago, your sandwiches were wrapped in glossy 

brown paper. These chemicals were the gloss, because they stopped grease going through the paper and kept the 

paper dry. The chemicals are no longer made in America and no longer made in Europe. Those production lines 

ran down in the early 2000s, but they are still made in parts of Asia. So it is entirely possible that people are still 

being exposed to the chemicals through products that are imported. There are no standards that regulate this 

product in food products at the moment. 

As a consequence of that, something like three per cent of the PFAS that was made, or the PFOS in 

particular—one of the chemicals—of the total production was used in firefighting foams. The rest was used in 

food packaging and stain-resistant fabrics and the like. So it is a relatively small amount we are talking about but, 

of course, concentrated in certain areas. So if you live in the Western world, you have been exposed to these 

chemicals. We all in this room have some of this in our bloodstreams. In fact, the health authorities regularly pool 

the blood samples, where they test random samples of blood from different people mixed together and they test 

for these chemicals. They always find it in the background. 

Senator GALLACHER: Mr Grzeskowiak, if you are unlucky enough to live next door to one of these 

Defence bases, you have had your property value destroyed. What does the minister have to say about addressing 

that concern? 

Senator Payne: Mr Grzeskowiak can also add to that. 

Senator GALLACHER: I would like to know what you think. 

Senator Payne: Well, if you would let me finish. Defence has been engaging with the major financial 

institutions and the Australian institute of property valuers to ensure that they have a clear understanding of the 

circumstances and the work that we are doing. That is the case particularly in relation to Williamtown and Oakey, 

but I will let Mr Grzeskowiak add to that. 

Mr Grzeskowiak: Our intent with these engagements—the last engagement was in December last year—is to 

try to help the property industry and the valuing industry understand about where these chemicals are so that as 

they are undertaking their valuations they can take that into account. But we cannot determine how a property 

valuer would determine value. We just want to educate that industry so that it understands that the chemicals are 

not everywhere—they are in some places—and maybe that can be taken into account. 

Senator GALLACHER: But that is avoiding the reality of the market. The market is saying that the 

properties are worthless because they are contaminated. You can go and argue with all the valuers you like, but if 

someone has had a significant asset demonstrably devalued by activity on the Defence base, you should be 

compensating. 

Mr Grzeskowiak: I did read a valuer's report from the middle of last year which looked specifically at the 

New South Wales area. It did not conclude that the properties were worthless. It did conclude that a devaluation 

had occurred. It did mention that property sales were continuing in that area, although at a lower rate than the 

previous year. Yes, from that evidence, there would be an impact. But I think it is a little extreme to say that the 

properties are worthless. 

Senator GALLACHER: So is there any Defence activity undertaken to ameliorate the damage that your 

neighbours have suffered as a result of Defence activity in firefighting foams contaminating their land, their bores 

and the like? 

Mr Grzeskowiak: The issue is being dealt with at a whole-of-government level, led by a PM&C taskforce. 

That is being dealt with at the moment and advice is being prepared for government consideration. 

Senator KAKOSCHKE-MOORE: There are four areas I would like to traverse, time permitting. The first 

relates to Pathway to Change. It has now been five years since the Pathway to Change strategy was announced. 

Has a review been undertaken to determine whether the aims of that strategy have been or are being met? 

Mr Richardson: What I would say is that, in the five-year program, that five years comes to an end in April 

this year. Last September, we commenced consultations with staff about a successor to Pathway to Change. We 

will certainly have one in place by the middle of the year. There are some metrics which you can use to show 

progress or otherwise in some areas—that is both ADF and APS. 

Air Chief Marshal Binskin: I can add a bit more to that, if you would like, from the ADF perspective. As of 

December last year, all the key recommendations and actions out of Pathway to Change—if you have the 

document, it is at the back of that document—have been finalised. We do look at feedback. We work closely in 



collaboration with the Australian Human Rights Commission. They have been doing ongoing work with us. We 

also do unacceptable behaviour surveys. We get the information back and we track how we are going. 

As a part of the last unacceptable behaviour survey, in general, the information we got back is that there is a 

better understanding in the organisation now of the need for cultural reform and the benefits of that. We are 

seeing reported better handling of unacceptable behaviour at the coalface of the organisation and at the levels 

where this may be reported. So the early handling of it is better. That is probably due to a lot of the education. It is 

due to a lot of the education we have out there and the fact that we conduct briefings. 

In our leadership training, a lot of this is now included. We have had SeMPRO, which is the Sexual 

Misconduct Prevention and Response Office, brief 41,000 people in the last couple of years on mechanisms for 

reporting unacceptable behaviour and how they might action that appropriately. The report from the surveys is 

that people's view in the organisation is that leaders are being held more accountable and that there is confidence 

that leaders are promoting zero tolerance for unacceptable behaviour. 

Senator KAKOSCHKE-MOORE: Those were the findings? 

Air Chief Marshal Binskin: The behaviour survey, yes. 

Senator KAKOSCHKE-MOORE: How many of those surveys have been conducted in the past five years? 

Air Chief Marshal Binskin: We normally do one a year, but I will get you the exact timings of those. 

Mr Richardson: At least five. 

Senator KAKOSCHKE-MOORE: At least five. I have not been able to find any online, doing my own 

research. Do the results of those surveys get made public? 

Air Chief Marshal Binskin: We do have summary sheets, but we tend to use them for internal review and 

how to adjust the programs we have. But we also see it play out. Because of the 'what if' of all this, there has been 

a small 'so what'. It is only small, but we are seeing a small reduction currently in the reports of unacceptable 

behaviour from 2015 to 2016. So we are starting to see that come down. All this is also reflected in the 

observations of the Australian Human Rights Commission that is working with us. So we see that as being 

positive. 

The secretary said to you that we are coming up to five years in the March-April time frame. The 'so what' of 

this is: is it all done? No, it is not. Currently we are developing the next pathway, or whatever it may be called. 

We have had Defence senior leadership group meetings. We have had a number of meetings that have focussed 

on this. We have had leadership in the organisation out talking to personnel. I think the figure we got is about 50 

per cent of the ADF, and the APS has been a part of this. We are looking at where we take the next pathway to 

this. My view is that the focus now is on the increased capability for improved culture. That is what we are really 

looking at for where we want to go. 

There is one more point, and it is a really important one. Towards the end of last year, we released the 

commanders and managers guide to responding to family and domestic violence. We saw this as being very 

important. It is actually a bit of a cornerstone for us, because that document was reviewed and a part of that 

development was done in consultation with the gender equality and advisory board that we have, which is 

external to the organisation. We work with them on a quarterly basis. We get them into Canberra. Prominent 

corporate, industry, academic, journalist and Human Rights Commission representatives are on it. When we 

finalised this commanders and managers guide to responding to family and domestic violence, at the end of the 

meeting where they reviewed it those external people were adamant that we were leading the way in that policy 

on how it should be handled. I want to put that in there because, five years on, where have we come from and 

where are we? I think we are in a good space. We have a long way to go, but I think we are in a good space to be 

able to continue into the future. 

Senator KAKOSCHKE-MOORE: I suppose measuring, quantifying and describing cultural change can be 

quite a challenge in terms of the metrics that you need to use. I notice there was an unacceptable behaviour survey 

from ADFA, I think, in 2011. All the responses were made on an anonymous basis. Were the unacceptable 

behaviour surveys conducted in the past five years also conducted on an anonymous basis? 

Mr Richardson: Absolutely. 

Senator KAKOSCHKE-MOORE: Absolutely. Why, then, are these surveys not made public? 

Mr Richardson: Well, I do not know whether we have ever turned our mind to it. I do not know whether 

BHP make their surveys public. We initiated these ourselves. We do them because, as the leadership group, we 

want information as to how people are thinking and attitudes within the organisation. 



Senator KAKOSCHKE-MOORE: In terms of the public perception and even Defence itself being 

comforted in the fact that Pathway to Change is working, having these surveys made public or at least a summary 

of the surveys being made public for the analysis of the plan would be helpful. 

Air Chief Marshal Binskin: We do have an executive summary. It is a facts sheet; it is a couple of pages. 

That is made public. We can show you where that is on the system, if you like. 

Senator KAKOSCHKE-MOORE: That would be great, thank you. 

Air Chief Marshal Binskin: Rather than all the thick, raw data, that is a good summary. It is warts and all, I 

will tell you. Some of it is not easy reading, but the facts are there. I guess the other part of it too—we did it with 

ADFA for a couple of years and then we rolled into the broader ADF—is who you compare us with, because noone 

else is actually doing it out there. It is not often I point to The Canberra Times, but I will point to The 

Canberra Times editorial earlier in the week. It compared how we approached ADFA and the concerns we had 

there and how the universities are approaching the colleges. They are just starting to get into this area. Again, we 

have probably been leading the way in the community in the way we have approached it. So it is difficult to 

actually compare us to anyone out there, when they are not doing— 

Senator KAKOSCHKE-MOORE: The same thing. 

Air Chief Marshal Binskin: The same thing, yes. 

Senator KAKOSCHKE-MOORE: Will there be a final review of Pathway to Change and the first five 

years, a document that we can look at to see how effective it has been? I know within the document there were six 

levers for implementation. 

Mr Richardson: We have not turned out mind to that. We will certainly consider that. We have been more 

focussed on one pathway not coming to a grinding halt in April, declaring victory and then turning our back on it. 

We have been far more focussed on, 'Right, this is coming to an end, this part of it. What do we do to continue it?' 

That is where we are focussing. 

Senator KAKOSCHKE-MOORE: I am in no way suggesting that a review of the first five years should 

preclude any consideration of a continuation of this, not at all. 


Senator KAKOSCHKE-MOORE: But I think it would be a helpful point of reflection, if I can put it that 

way. 

Mr Richardson: We will consider that, yes. 

Air Chief Marshal Binskin: I think it would be worthwhile to consolidate that as the point for the next 

pathway, or whatever we call it. 

Senator KAKOSCHKE-MOORE: That is right; the next one. 

Mr Richardson: I would also note that we have consulted with more than half the staff in Defence on 

Pathway to Change and what comes next. That has included the CDF and myself and other members of the 

leadership group meeting with whole ranges of people. That has included reflection about Pathway to Change. So 

we have certainly been reflecting on how successful or not we have been. We certainly have been reflecting on 

where we are. We are now working through where we go to next. 

Senator KAKOSCHKE-MOORE: I think it would be beneficial for those reflections to be recorded 

somewhere for us to consider too. 

Mr Richardson: We will consider that. We will consider it. 

Senator KAKOSCHKE-MOORE: Thank you very much. I would like to move on to my next line of 

questioning, which Air Chief Marshal Binskin touched on briefly in one of his responses, and that is SeMPRO. I 

have been on SeMPRO's website. While the option of making a confidential or restricted disclosure does not 

appear on the website's home page, it does appear on the report/disclosure page. It is quite clear that a person has 

two options—making a restricted disclosure or a non-restricted disclosure. When you click on the 'make a 

restricted disclosure' page, it sets out what support is available to someone who makes a confidential report and 

whether that person's information will be kept confidential. I saw from the website that there are some 

circumstances—and I stress that I think these are very reasonable circumstances—in which a person's information 

might not be kept confidential. An example is where there might be an imminent risk to their health or safety, or 

another person's health or safety; that is entirely reasonable. It has been put to me, though, that even the 

possibility of a restricted disclosure not remaining confidential might discourage somebody from coming forward 

to make that disclosure. Have you heard of those concerns before? 



Air Chief Marshal Binskin: I can understand that some people would have those concerns. We have to weigh 

that up with our duty of care, though, and our legal responsibilities. We have pushed the bounds here, I think, of 

being able to keep an event restricted, and work with the wishes of the victim as much as we can. The concerns I 

would have is if something came to light where other people were in danger, not only the victim. I think we have 

the best balance there. But if someone has a better idea, we are always open to looking at it. Again, it is very 

difficult to compare us here because I do not know if there is any other organisation that is working in that way. 

Senator KAKOSCHKE-MOORE: It is my understanding that the US version of SeMPRO—SAPRO, I 

think, is its acronym—accepts restricted disclosures and that they will not ever report on them. Have you been 

made aware of that? Is that your understanding of the way SAPRO works? 

Air Chief Marshal Binskin: I will ask Brett Wolski, the head of people capability, in a minute. I am not 

aware of that, but I know that we looked at a number of models and looked at what the best was for Australia and 

the Australian legal system—our workplace health and safety laws and privacy laws. We tried to bring that all 

together for the best outcome from a victim-centric approach, which acknowledged that if there were risks and we 

knew about them and did not action them, we would not be able to answer the questions at the end of that. 

Senator KAKOSCHKE-MOORE: I understand. 

Rear Adm. Wolski: In answer to your question, we did go to the US and review the SAPRO organisation that 

the US established some years ago now. To be truthful, we decided we needed to keep some measures in there. 

We could not accept a restricted disclosure. In the Australian context, if another person were at risk or a minor 

were involved, we would be remiss in keeping that as a restricted disclosure. 

Senator KAKOSCHKE-MOORE: Of course. 

Rear Adm. Wolski: The case here in Australia was assessed. They are the rules we have in place. We have 

been very clear about that right from the inception of SeMPRO. 

Senator KAKOSCHKE-MOORE: You may need to take these questions on notice; I am conscious of time. 

Last time we met in October last year, you provided some statistics. At the time, 753 clients had received direct 

assistance through SeMPRO. Of those, approximately 300 were victims of sexual assault. Would you be able to 

provide the committee with an update on those figures on notice? 

Rear Adm. Wolski: Certainly. I can give it to you right now. Slightly over 800 have received assistance; 

approximately 320 are victims. 

Senator KAKOSCHKE-MOORE: Thank you. I will quickly move on to the subject of still-serving 

members who have been accused of serious sexual assault. This is a matter that we have raised a number of times 

before. Last time we met, and in response to questions on notice, you provided some updated figures on the 

number of people who were in the Australian permanent Navy, the Australian regular Army and the Air Force. It 

was 12 people in the Navy, nine in the Army and two in the Air Force who had been accused of serious sexual 

assault. Do you have updated figures on those for this year? 

Air Cdre Ehlers: Yes. We have an update for the matters that are still open as opposed to— 

Senator KAKOSCHKE-MOORE: That have been resolved. 

Air Cdre Ehlers: Yes. So on matters still open, the current numbers indicate that there are eight Australian 

Defence Force members still serving alleged of serious sexual matters that have not yet been resolved. 

Senator KAKOSCHKE-MOORE: And that is across the ADF, including Army, Navy and Air Force? 

Air Cdre Ehlers: Yes. 

Senator KAKOSCHKE-MOORE: You may not have this information here, but I will be interested to know 

if you could provide it on notice. What is the number of people who have made allegations of serious sexual 

assault and who have left the ADF subsequent to making those allegations? 

Air Cdre Ehlers: I will look at that on notice, but it is incredibly complex as to when the allegation was 

made. Many of the folks who came through the Defence Abuse Response Taskforce were not still serving at the 

time or, as their matter was dealt with, had subsequently left. So I doubt I can give you a totally accurate number, 

but we will look at giving you an indication. 

CHAIR: I will get you to hold it there, Senator Kakoschke-Moore. There will be time later this afternoon. 

Senator LUDLAM: Are there any plans resulting from the change of administration in the US for Australia to 

host additional US military assets either on our soil or in our ports? 

Mr Richardson: No. Nothing has been raised with us. 



Senator LUDLAM: Late last year there were reports, although they were open-source reports, obviously, of 

an agreement to host the US F-22 Raptors for a period of time in the Top End. 

Mr Richardson: They have been here. 

Senator LUDLAM: They have been here. That is not based here, though? That is just a rotation? 


Senator Payne: Part of our Enhanced Air Cooperation arrangements. 

Senator LUDLAM: Okay. Do they fly— 

Senator Payne: As you know, there are two, I think, at Avalon at the moment. 

Senator LUDLAM: At Avalon? That is for the air show, though? 


Air Chief Marshal Binskin: Yes. They are currently in Tindal on a deployment for exercise. Some of those 

aircraft went down to Avalon for the air show. 

Senator LUDLAM: That is Air Force. Anything useful that you can let us know about? 

Mr Richardson: There has been no additional naval hosting et cetera. There have been no requests made of 

us. 

Senator LUDLAM: Are these rotations considered deployments or are they strictly training? 

Mr Richardson: They are training. 

Senator LUDLAM: So they are not armed? 

Mr Richardson: There is live fire training. 

Senator LUDLAM: But they are not deployment? 


Senator LUDLAM: So these aircraft cannot deploy out of Northern Australia? 

Mr Richardson: Well, that is a different question. It is part of an annual rotation through Australia. 

Theoretically, they could deploy from Australia in an emergency. However, they are part of a rotation where the 

focus is on training. If there were a humanitarian disaster in the region, the marines in Darwin could theoretically 

deploy to assist in the recovery. But, again, the primary purpose is training. 

Senator LUDLAM: I think that is consistent with what was said before either by you or your predecessor 

pretty more than a year ago with regard to the marines. You are confirming that the air force aircraft could be 

used in the same way if an emergency or something arose? 

Mr Richardson: In extremis, yes. 

Senator LUDLAM: That is fine. I guess we will leave the naval stuff aside. As far as the US Air Force 

rotations through Tindal, are those aircraft capable of carrying nuclear weapons? 

Mr Richardson: Well, I would note that for many years the B-52 bombers have come to Australia. The B-1s 

have come to Australia. They are capable of carrying nuclear weapons. 

Senator LUDLAM: Thank you. That is enormously comforting. As to the expansion of the rotations through 

the Northern Territory, the same goes? 

Mr Richardson: What do you mean? 

Senator LUDLAM: Until reasonably recently, within the last two or three years, it was not usual practice for 

the US Air Force to be operating or rotating through Tindal. 

Air Chief Marshal Binskin: Actually, I would disagree. When I was flying at Tindal in the 1990s, the US Air 

Force was rotating through the Northern Territory on a regular basis. 

Senator LUDLAM: Okay. 

Air Chief Marshal Binskin: The US marines and the US Navy. So it is not unusual. 

Senator LUDLAM: Understanding, living in a port city myself, that when nuclear-capable vessels visit, they 

will neither confirm nor deny whether they are carrying such armaments, I presume that is still the official policy 

of the navy? 


Senator LUDLAM: Does that also apply to nuclear-capable bombers? 



Mr Richardson: I would simply note what is on the public record in respect of US policy in terms of aircraft 

flying around nuclear armed. I would simply note that. 

Senator LUDLAM: And what is on the public record? 

Mr Richardson: I do not think you will find it is an everyday occurrence. 

Senator LUDLAM: That is not quite what I asked. 

Mr Richardson: You can work from first principles. You can look at what is publicly available. 

Senator LUDLAM: Or you could just give us a clear answer. 

Mr Richardson: You can draw your own conclusions. 

Senator LUDLAM: Just give us a clear answer. 

Mr Richardson: No. I think I have given it. I do not think I can do any more. 

Senator LUDLAM: You have not. You have obfuscated and told me to go and look at what is already out 

there. 

Mr Richardson: If you look at what is publicly available and you look at the purpose of the Enhanced Air 

Cooperation and you put all of that together, I think you can draw your own conclusions. 

Senator LUDLAM: Well, I do not want to draw the wrong conclusion, and I am sure you would not want me 

to either. 

Mr Richardson: I am sure you would not. 

Senator LUDLAM: So as far as what is on the public record for the navy, they will neither confirm nor deny 

whether— 

Mr Richardson: That is right. 

Senator LUDLAM: What is the case with US aircraft? 

Mr Richardson: I think the US neither confirms nor denies as a matter of course. 

Senator LUDLAM: So it is the same. That is all I am trying to establish—whether it is the same or whether 

there is a different policy. 

Mr Richardson: I am not aware of it being a different policy. 

Senator LUDLAM: I hope that you would be aware if there were a different policy. 


Senator LUDLAM: So it is possible that nuclear armed bombers are transiting through Australia? 

Mr Richardson: No. I will not agree with that, I am sorry. I just will not agree with that. 

Senator LUDLAM: Well, you cannot have it both ways. Either it is confirmed or it is not. 

Mr Richardson: Senator, I think we have said what we can on this. I would simply leave it to people to draw 

their own commonsense conclusions. 

Air Chief Marshal Binskin: I am with the secretary. That is why we are in a diarchy. You are not going 

down a commonsense approach, sorry. Look at the authorities that sit around nuclear weapons and security in the 

US and look at the US policies. I think you are heading down a non-commonsense approach. 

Senator LUDLAM: You just told me that, as far as you are concerned, the US government would neither 

confirm nor deny whether aircraft are carrying nuclear weapons through Australia. Then when I said, 'Does that 

therefore mean it is possible that they are?', you said no. Just choose one and I will move on. 

Mr Richardson: I understand the contradiction you are pointing to. 

Senator LUDLAM: Great. We will get this resolved. 

Mr Richardson: No. I understand the contradiction you are pointing to. I also draw your attention to the 

commonsense position that underpins all of that. 

Senator LUDLAM: Which is what? 

Mr Richardson: Which is what I have pointed out to you. 

Senator LUDLAM: I think others will draw their own conclusions as well. On 4 March last year, 46 experts 

in international law wrote to you, Senator Payne, expressing their concern about Australia's policy of extended 

nuclear deterrence. The lawyers urged the government to review its support for the doctrine of extended nuclear 

deterrence in the light of the growing international movement to prohibit these weapons on humanitarian grounds. 

Firstly, has such a review taken place or is it currently taking place? 



Senator Payne: No. It has not. And, no, it is not. 

Senator LUDLAM: Should I take it that settled doctrine is as it is read in the Defence white paper? 

Senator Payne: Broadly speaking, yes. 

Air Chief Marshal Binskin: Those experts might want to write to the DPRK at some stage, I would imagine. 

Senator LUDLAM: What is that supposed to mean? 

Air Chief Marshal Binskin: Well, from a nuclear proliferation point of view, there are a few nations around 

the world that are going down this path. 

Senator LUDLAM: Right. Do you think that Australia supporting the nuclear obliteration of North Korea 

makes anybody safer? 

Senator Payne: I will assume that is actually not a question for the CDF. 

Senator LUDLAM: Well, the CDF intervened and said that we should take our concerns to the North Korean 

authorities. If that was— 

Air Chief Marshal Binskin: No. I said the authorities. 

Senator LUDLAM: tongue in cheek. 

Air Chief Marshal Binskin: Yes, it was. I apologise for the tongue in cheek. 

Senator LUDLAM: It was. That is all right. We will both stand down. 

Senator Kim Carr: No room for humour here! 

Senator Payne: Certainly none for irony! 

Senator LUDLAM: Every now and again there is. Okay. So no review. First of all, are you familiar with the 

correspondence that I am referring to? 

Senator Payne: Yes. I believe I responded to it. 

Senator LUDLAM: I know that it is a while ago. 

Senator Payne: But I believe I responded to it. I recall a response of that nature. 

Senator LUDLAM: Thank you. So the lawyers wrote—I will quote from here— 

Senator Payne: I do not have a copy of the response. 

Senator LUDLAM: Yes, I understand that. 

Senator Payne: Life is not that serendipitous. 

Senator LUDLAM: I will not misquote them. They wrote that the use of nuclear weapons: 

… would almost certainly violate international law, given the uncontrollability of their blast, heat and radiological effects. 

Does the government agree? 

Senator Payne: My response was contained in that letter. I have no reason to change my views. We have no 

reason to adjust the position we have previously adopted. 

CHAIR: On that note, we will break for afternoon tea. We will resume at 3.45 pm with Senator Roberts and 

then Senator Carr. 


CHAIR: Senator Roberts looks like he has been scratched by order of the stewards acting on veterinary 

advice, so I will go to you, Senator Carr. 

Senator KIM CARR: Thank you very much. While I am waiting for Senator Xenophon, because there are 

some matters that we wish to deal with that coincide, perhaps I could just take up another matter. Secretary, we 

were discussing this morning the question of capability and the consequences of managing outsourcing. Are you 

aware of the recent ANAO reports on the education department and the immigration department—one in regard 

to the VET FEE-HELP scheme and one in regard to the management of contracts for garrison services and 

procurement? They are two related reports. Are you familiar with them? 

Mr Richardson: No, I am not. The Department of Defence specialises in giving the ANAO a lot of work. We 

do not have time to read reports that they do in respect of others. 

Senator KIM CARR: I expected you would answer something along those lines. There were concerns raised 

by the Auditor-General, and the common theme of those reports on those two departments was the capacity of the 

departments to manage contracts. 




Senator KIM CARR: This involved very, very large sums of money, which your department, of course, also 

has to manage. The reports essentially raised questions, I think, about the capacity of those departments to 

manage effectively. Are you satisfied that Defence project management capacities prevent cost blowouts? Do you 

have the capacity to monitor and control costs, the appropriate quality and accountability frameworks to manage 

risk, and sufficient data to gather and data analytics with regards to contracts to get ahead of management 

problems—basic intelligence about what is occurring within a contract regarding administrative arrangements? 

Do you think you have capacity to actually manage contracts with the downsizing? 

Mr Richardson: In general, yes, but our performance is variable. I think the ANAO reports would suggest 

that. In some areas, we have performed very well indeed, and there have been some specific projects where our 

project management has been less than what it should have been. 

Senator KIM CARR: Do you rely upon contractors to manage contracts? 

Mr Richardson: Most of that work is done by the APS, but we do get assistance in some specialised areas 

from outside. 

Senator KIM CARR: Is it not exactly the area that is core business for the APS—to actually manage 

contracts? 

Mr Richardson: Yes. As a general rule, I think—I stand to be corrected—it is the APS. But I think, in doing 

that, there may be occasions when they do get some specialised assistance. 

Senator KIM CARR: Are you satisfied with that in general—that you have the capacity but not always? 

Mr Richardson: I am satisfied that with a staff ceiling on our APS workforce of 18,200, we have the numbers 

to be able to do our job effectively. The first principles review highlighted the need to lift the skill set in some 

areas. Indeed, the first principles review suggested that with the right skill set we could manage with an APS 

workforce of under 17,000. I think that would be unrealistic and we have not sought to go there. Neither has the 

government. 

Senator KIM CARR: No. 

Mr Richardson: But certainly I think we have not yet completed all the skilling up that we need to do as 

recommended by the first principles review. 

Senator KIM CARR: I turn to the question of the return to order that was put to the Senate on 9 November 

2016, co-sponsored by me and Senator Xenophon. It concerns the $500 million design and mobilisation contract 

between the Commonwealth and DCNS that was signed on 30 September 2016. Minister, you indicated to the 

Senate that you were not going to provide the Senate with a full copy of those documents. You provided a 

redacted copy on 8 February. You claimed public interest immunity. On 8 February, the Senate resolved not to 

accept that declaration. Do you stand by your response? 

Senator Payne: I do, Senator Carr. I set out the details in my letter to the President of 8 February, which I am 

happy to provide for the record. 

Senator KIM CARR: Thank you. I am sure other senators would be pleased to have that. The document I 

have in front of me here was tabled on 9 February. 

Senator Payne: My position has not changed. 

Senator KIM CARR: It has not changed. I wonder why not. 

Senator Payne: For the reasons that I set out at the time. I have made clear in my correspondence that the 

government has recognised intellectual property and treated it, indeed, as a key element of establishing sovereign 

capability for the Future Submarine fleet. The approach that we are taking in that regard is centrally focused on 

not repeating the errors which were made in relation to the development of the Collins class submarines, which 

are well recorded. We have implemented with the government of France and with DCNS quite appropriate 

arrangements for the ownership of, and the rights to use, intellectual property. In that contract itself, the design 

and mobilisation contract to which you refer, we have secured appropriate intellectual property rights from DCNS 

to transfer submarine data to its capable industry partners in Australia, to establish that capability to operate and 

support the Future Submarines in Australia. 

The details of intellectual property arrangements with DCNS are commercially sensitive. Because of the 

commercial value and the sensitivity of those intellectual property rights, the Commonwealth has agreed with 

DCNS that those intellectual property provisions remain confidential between the parties. It is our view that 

disclosure of the terms that DCNS has provided to the Commonwealth may have the outcome of causing damage 



to DCNS in the competitive marketplace. I would also say that disclosure of the terms of the intellectual property 

rights in contravention of our agreement with DCNS could also cause damage to our relationship with France as a 

trusted partner to receive and use the submarine technology that is highly sensitive to France in accordance with 

the terms that were agreed with DCNS in France for that technology to be transferred to Australia. 

So, in providing the redacted version that was given to the Senate, we were endeavouring to be helpful. We are 

fully aware of the concerns of the Senate and of individuals in the Senate that Australia not repeat the errors, if 

you like, or the omissions which were of concern in relation to the Collins class submarines. That lack of 

intellectual property rights did have a significant impact on our ability to maintain, update and upgrade the fleet 

when we wished to. It had a direct impact on our capacity to operate the submarines as required. So we are very 

acutely aware of the importance of the right approach to our intellectual property, and that is why we were so 

careful in relation to the arrangements with DCNS. I would also say that we had those arrangements reviewed by 

independent counsel outside Defence; they are not part of the Defence organisation. As I said, they are 

commercially sensitive. They are confidential in nature and the government has not changed its position on that. 

Senator KIM CARR: Minister, you have used the word 'may' on several points in that explanation. Putting 

that to one side, these are judgement questions. That is why I presume you have used the word 'may'. It is your 

judgement that these could be commercially sensitive. It may have effects with regard to our international 

relations with France. Is that the basis on which you are using the word 'may'? 

Senator Payne: No. I would say we are talking about events that may occur in the future. That is why I would 

use the word 'may'. 

Senator KIM CARR: I see. You have indicated that there is an agreement in place. Is that a contractual 

agreement that is in place that you will not provide that information to the Senate? 

Senator Payne: Effectively, yes. 

Senator KIM CARR: So the Commonwealth of Australia has entered into an agreement not to provide that 

information? 

Senator Payne: Not to make it public, Senator. Mr Johnson may wish to add more. We agreed to the 

confidentiality of certain provisions agreed under the contract, and that is the government's position. 

Senator KIM CARR: What was the date of that? 

Senator Payne: I will ask Mr Johnson to add to that. 

Mr Johnson: Minister, you have it exactly right. These are terms of agreement of protecting that information 

not from the government, not from appropriate official review but from public release and public information. 

Senator KIM CARR: So it is available in another form if it is not public? Is that what you are saying? 

Mr Johnson: No. As the minister has already pointed out, we have brought in independent counsel to review 

those provisions and to ensure that the adequacy of our approach is thorough and appropriate. 

Senator KIM CARR: Thank you. 

Mr Johnson: And that has been upheld on numerous reviews. 

Senator KIM CARR: The chairman of the committee, at the beginning of the session, drew the attention of 

witnesses to the order of the Senate of May 2009 specifying the process by which a claim of public interest 

immunity should be raised. It specifically reminds that information in a document that is confidential and consists 

of advice to government is not a statement that meets the requirements. It says that witnesses are required to 

provide specific indication of the harm to public interest that could result from the disclosure of the information. 

To date you have not done that. You have indicated that these are speculative questions about what might happen. 

Senator Payne: Well, they have to be. They are in relation to future events. 

Senator KIM CARR: Well, who is the independent pre-eminent counsel that you have referred to? 

Mr Johnson: I will have to take that on notice. We have done a number of reviews. 

Senator KIM CARR: Is that information secret as well? 

Mr Johnson: No. It is not secret. It is not at immediate recall. I may find it and be able to bring it to you later 

this afternoon. 

Senator KIM CARR: You have indicated that the assessment of this unnamed person was that these matters 

were commercially sound. What do you mean by commercially sound? 



Mr Johnson: I will reset the discussion. We are in fact talking about an FOI request that started on 19 October 

2016. The redactions to that document were applied under section 33 of Australian regulations. Information 

bespoke— 

Senator KIM CARR: I will intervene at this point. I am referring to a return to order from the Australian 

Senate, not an FOI request. 

Mr Johnson: I was going to start at the beginning. On 9 November, there was a notice of motion from the 

Senate. On 1 December 2016, the minister wrote to the Senate president advising that the design and mobilisation 

contract can be tabled with redactions and intellectual property terms and commercially sensitive information of 

the contract not tabled after due regard for commercial and public interest immunity claims that apply. I can 

explain what those are, if you like. 

Senator KIM CARR: That is the point of my question. Specifically— 

Mr Johnson: So those are allowed. 

Senator KIM CARR: You can skip through some of your talking points. I suggest to you that the minister 

has made a statement. I am particularly interested in (1) who the independent pre-eminent counsel is—you are 

going to take that on notice—and (2) the basis for the assertion, made by the minister and you today, of this being 

a commercially sound practice. What is the basis of that claim? 

Mr Richardson: I might add that in our judgement and the judgement of independent counsel, release of the 

information could be expected to have an adverse effect on the business of DCNS by disadvantaging their 

competitive edge over their competitors. The disclosure of material may advantage those competitors in future 

tender processes. Disclosure is highly likely to affect the future supply of information or services to the 

Commonwealth under the design and mobilisation contract and potentially future submarine contracts. We also 

believe that the release of the identified information would affect the ability of the Australian government to 

maintain a good working relationship with France. 

Senator XENOPHON: With Senator Carr's indulgence, what we are seeking is what intellectual property 

rights Australia has in the context of an intellectual property dispute. We do not need to know specific 

commercial terms, simply what rights the Commonwealth of Australia would have if there were a dispute. You 

are familiar with the Federal Court case involving Kockums AB v Commonwealth and the 2001 Federal Court 

decision where that was raised. You are probably familiar with what Lieutenant General Christopher Bogdan, the 

head of the F-35 fighter program acquisition program in the United States, says: 

What I'm experiencing is the classic example that if you do not think about this upfront you're dead in the water at the back 

end of this. We didn't think much about this upfront in the F-35. We didn't write anything into the contract very well. To this 

day— 

he added— 

We don't train our program managers, contracting officers, or even our lawyers that advise us on what this monster is. 

That is as recently as late last year. What issue is there? Is there not an overwhelming public interest argument to 

at least know broadly what our rights are in the context of a dispute? The foundations of that right ought to be 

disclosed to the taxpayers of Australia. 

Mr Johnson: So, in answer to your question about our right to ensure that we follow through on lessons 

learned from Collins, I would start with the original announcement by the Prime Minister. This was the selection 

of DCNS as the preferred design partner subject to commercial agreements. Those in many ways revolve around 

intellectual property. What we have done with DCNS, Lockheed Martin Australia and the government of 

France—some of the intellectual property is owned by France—is secure the ability to establish a sovereign 

submarine capability with the right intellectual property afforded both to the government, to the Commonwealth, 

as well as our key vendors who have a role in the operation of sustainment. So, as you point out correctly, in the 

case of Collins, that lack of intellectual property impaired our ability to maintain the Collins class, which we have 

since recovered. You heard testimony earlier that we have made a remarkable change in the viability of Collins. It 

is that very much hard learned lesson that is at the core of all the work we are discussing with respect to ensuring 

that we have the right intellectual property arrangements. 

Senator XENOPHON: Well, what veto rights does the government of France have over the Commonwealth 

with respect to the foreground IP developed under the contract, including rights under the Wassenaar 

arrangement? Does the government of France have a veto right over the foreground IP referred to? 

Mr Johnson: My legal counsel is not available today, so I will take that question on notice. 

Senator XENOPHON: I asked a number of these questions specifically in question on notice No. 338. 



Senator KIM CARR: This goes to the heart of our concern. If you are saying we cannot have access to the 

particular documents, we want to know the scope of the Australian government's rights with regard to this 

contract. What we have been told is that an unnamed independent— 

Senator XENOPHON: Eminent. 

Senator KIM CARR: Eminent, pre-eminent counsel. 

Senator XENOPHON: Not Dennis Denuto? 

Senator KIM CARR: Yes. That is right. 

Senator XENOPHON: It is not Dennis Denuto? 

Senator KIM CARR: Has assessed this and that there is some commercially sound approach. It is not the 

question just so much of the commercial soundness of the issue that I am concerned about. It is the rights of the 

Commonwealth of Australia with regard to this contract. Are you telling us we cannot have that information? 

Mr Johnson: I am telling you we have that information. 

Senator KIM CARR: You have it. We want it. Why can the Senate not have that information? 

Senator Payne: For the reasons that I have explained. In providing the redacted version of the document, we 

endeavoured to provide the Senate with as much information as we could. It is also fair to say that we are a short 

way through this process in relation to contracting arrangements between us and DCNS. We will have to agree 

future contracts in relation to construction and other potential areas over time. I think the approach that we are 

taking, as I have explained it to you, is one which we have agreed with our counterparts. We intend to honour 

that. The government has not changed its position from the one I outlined to the Senate earlier in February. 

Senator KIM CARR: What was the date on which you received this independent pre-eminent counsel's 

advice? 

Senator Payne: I do not have the date, but I will find out for you. 

Senator KIM CARR: What was the cost of getting this assessment? 

Mr Richardson: We will take that on notice. 

Senator KIM CARR: And what was the basis of the assessment itself? Stating that it was commercially 

sound is not going to be an adequate response here. What was the basis on which the judgement was made that it 

was commercially sound? What material was available to allow that assessment to be made? 

Senator Payne: We will take those questions on notice. 

Senator KIM CARR: This is a limited tender, is it not? 

Senator Payne: A limited tender? 


Mr Gillis: We have actually made the selection of DCNS. 

Senator KIM CARR: That is right. It is very limited. It is limited to one. 

Mr Richardson: Well, there was an evaluation. 

Senator KIM CARR: There was an evaluation but then a limited tender with this particular provider. 

Senator Payne: No. I do not think that is the right terminology. 

Senator KIM CARR: Well, how would you describe it? 

Mr Johnson: It is a contract with a particular supplier. 


Senator KIM CARR: That becomes the result of the tender. You have a preferred provider with a specific 

contract with that one provider. There is no measure of competitive value for money, is there? In the 

circumstances, we are dealing with one contractor. 

Senator Payne: Well, that is not the case. I explained in my earlier remarks and I have explained in my 

correspondence that the engagements in relation to intellectual property are some which have high commercial 

value. This is a competitive market in which our contracting partner is working. It is not value neutral in that 

regard. 

Senator KIM CARR: In terms of the arrangements that you have entered into, is there a provision for the 

Commonwealth to establish a sovereign capability and technological transfer arrangement? 

Mr Johnson: Yes. 



Senator KIM CARR: What is the nature of that capacity? 

Mr Johnson: The nature varies by who and what the subject is. In some areas, the nature and the 

arrangements are with the French government. In other areas, it is with DCNS France directly. In other cases—in 

the case of major equipment—it is both with DCNS France as well as the supplier of those major equipments. All 

of these requirements are intended to ensure that we have the right information and the right intellectual property 

and the ability to use Australian industry to build and maintain submarines. 

Senator KIM CARR: And that is obviously our concern. The question, though, is about Australia's rights to 

establish a sovereign capability, not the French rights to establish. 

Mr Johnson: This is Australia's right. 

Senator KIM CARR: This goes to the question of future sustainment, does it? 

Mr Johnson: It does. 

Senator KIM CARR: But areas of future sustainment are not covered by this arrangement? 

Mr Johnson: At this point, there are no areas uncovered. But the flipside of that is it is very early in the 

process and so I guess you could ask that question each session. 

Senator KIM CARR: Of course we will. But the question, Mr Johnson, then arises: how can you possibly 

answer a question in the way you have when you have not made these arrangements? 

Mr Johnson: Because we are at the start and you would want factual information— 

Senator KIM CARR: I certainly would. 

Mr Johnson: based on each step. What we have now are contracts and deeds of commitment and a required 

strategy to provide the intellectual property needed to build and sustain a submarine operation in Australia. 

Senator KIM CARR: So you engaged this independent pre-eminent counsel, what, before you signed the 

contract or after? 

Mr Johnson: Well, actually, both. 

Senator XENOPHON: Hang on. Would you not get legal advice before the contract was signed? 

Mr Johnson: I could not quite hear you. 

Senator XENOPHON: Would you get legal advice before the contract was signed? 

Mr Johnson: Absolutely. That is why I said both. Both before and after. 

Senator XENOPHON: Why would you need legal advice after the contract was signed? 

Senator Payne: Because this is an ongoing process. 

Senator XENOPHON: For instance, does the IP agreement allow submarines built in Australia to be 

exported to another country, or does the IP agreement restrict it to just use by the Royal Australian Navy? 

Mr Richardson: I can say now, and pick me up if I am wrong, that these are not submarines that could be 

exported. In terms of Lockheed Martin, in terms of the US weapons system, in terms of the technology from 

France, these are not export versions of submarines. 

Senator XENOPHON: Thank you. In terms of the background IP, does the Commonwealth have to pay a 

royalty to DCNS for its use in respect of the IP? So we pay for it, but do we have to pay royalties? 

Mr Johnson: No. There is no provision for a royalty payment in the contracts today. 

Senator XENOPHON: What about tomorrow? 

Mr Johnson: Nor is one expected going forward. The contracts we have today are at the beginning. It is a 

multistep process. 

Senator XENOPHON: The contracts we have today. So it is possible that the contracts in the future— 

Mr Johnson: So the contract we have today has no royalty payment in it. The contract that we are going to— 

Senator XENOPHON: So can anyone at the table rule out that there will be royalties paid in the future? 

Mr Richardson: I think Mr Johnson is answering that. 

Mr Johnson: There is no provision or requirement for royalty payments. And, going forward, we do not 

expect any requirement for royalty payments. 

Senator Payne: Senator Xenophon and Senator Carr, I and the government want to be helpful in this to the 

extent that we are able. I have made the reservations clear in relation to the correspondence with the Senate. 

Perhaps a way to address your questions is through the questions on notice process. We will answer to the extent 



that we are able in the detail that we are able. We may come back to the committee and seek a private meeting or 

a public meeting, depending on how that pans out, to see if we can assist the committee further. 

Senator XENOPHON: Finally, in relation to that, I do not think question on notice 338 that I tabled on 12 

January this year has been answered. Can you give me an idea when it may be answered? 

Senator Payne: I do not think we have any outstanding questions, but I will check that. 

Senator KIM CARR: We thank the minister for her offer. We would be only too happy to engage in that 

process. 

Senator Payne: So let us see if we can assist in that. 

Senator KIM CARR: It is a very reasonable proposition. There is an issue here about our capacities as 

distinct from the French government's capacities. I personally am very concerned about whether or not there is a 

veto arrangement in the middle of these arrangements. Are there any vetoes there for the French government? 

Mr Johnson: No. 

CHAIR: They have got no power of veto? 

Mr Johnson: No. This is a commitment to go forward without veto now. It is a commitment limited to the 

design, building and sustainment of the future submarine. 

Senator KIM CARR: And that includes future IP development? 

Mr Johnson: Absolutely. 

Senator KIM CARR: Arising from these? Presumably, we will modify them and there will be new 

capabilities developed. 

Senator Payne: And we have made that quite clear right from the very beginning. The life of the future 

submarine is multiple decades long. We know that the first and second submarines will not be the same as the 

sixth and seventh, for example, because of the progress of technology and progress generally speaking, one 

imagines. So we will take that approach if we can agree on that and determine what we are able to make available 

to the committee through a questions on notice process. It may be constructive at some point in time to either 

have a further public meeting or a further private meeting with the committee as appropriate. 

Senator KIM CARR: Thank you. 

CHAIR: Thank you, Minister. 

Senator FAWCETT: I have some questions for the Chief of Air Force. 

Air Chief Marshal Binskin: While the Chief of Air Force is coming up, and while Senator Xenophon is 

there, I have some more food for thought. The ration packs supplied to the Australian Defence Force as part of the 

contract with the Prepack Ltd are not supplied to the New Zealand defence force. They are only provided for our 

defence force. 

Senator KIM CARR: So do the New Zealanders use these at all? 

Air Chief Marshal Binskin: No. That is what I just said. 

Senator KIM CARR: I understand what you have just said. 

Air Chief Marshal Binskin: They would have ration packs. I would not know what they have. 

Senator KIM CARR: And how much Australian content is in the New Zealand pack? 

Air Chief Marshal Binskin: I do not know. I will take that on notice, if you like. Would you like a ration 

pack as well? 

Senator KIM CARR: I would be delighted. 

Air Chief Marshal Binskin: We will organise that. 

Senator KIM CARR: Thank you very much. 

Senator XENOPHON: Thanks for dinner. 

Senator FAWCETT: I will not ask you what ration pack you had for lunch today. Likewise, as with your 

other service chiefs, I want to take you back to the portfolio budget statements just to check on the progress of a 

number of things that were highlighted there. The Woomera range remediation Joint Project 3024 Phase 1, at the 

time of the PBS, was not under contract. My understanding is that is now under contract. Given the vital 

importance of that range not only to our legacy air systems but particularly to the Joint Strike Fighter in terms of 

its testing and training, can you just give us an update on where that project is at and how its timeline will interact 

with the introduction to service of the Joint Strike Fighter? 



Air Marshal Davies: The range remediation project is on time. We are looking at the first elements of that 

being initiated in 2017, with the bulk of the work being done through 2018 and mid-2019. So at this point, even 

with a little bit of contingency, we will have the bulk of the remediation done certainly before IOC but about the 

same time as we stand up 3 Squadron with AIR 35. 

Senator FAWCETT: Can you refresh the committee on the value of the project? At this stage, do you know 

whether Australian radar technology will be included? 

Air Marshal Davies: It is in two parts. I do not have the value. 

Senator FAWCETT: You can take that on notice; that is fine. 

Air Marshal Davies: I will take that on notice. The initial part of the project has modest Australian industry 

content, but the extension for some of the detection equipment, radars in particular, restructured it so that it 

maximises the opportunity for Australian industry content, CEA in particular. 

Senator FAWCETT: Sure. I will take you to AIR8000 Phase 2. The PBS outlines a number of activities that 

are still outstanding with the aircraft. I want to ask you about certification. My understanding is it was bought on a 

civil certification basis. 

Air Marshal Davies: Yes. C-27J was around the time that we were acquiring. As you would remember, the 

US was considering divesting. So the progress of that militarisation or the certification under the US air force did 

not occur as we purchased C-27J. There are a couple of certification elements that we are going through now. The 

aircraft is flying, effectively. Minister Payne declared IOC in December last year on time for C-27J. Two pieces 

need to be worked through now. One is the G loading of the aircraft, which also includes an element of increasing 

the floor loading. The United States Air Force has a higher floor loading for the aircraft. We need to do the testing 

and the certification to go to that level. The second element in C-27J being worked on is the heads-up display. 

That is not at a certification standard we could use for high intensity low-level tactical flying. So there is a 

remediation in place for that through Leonardo and L3 to rebuild, effectively, the heads-up display. 

Senator FAWCETT: So is that something that they are funding, or is that something that the Commonwealth 

is having to fund? 

Air Marshal Davies: I do not have an answer to that, actually. 

Air Vice Marshal Roberts: The certification effort is part of the project cost. It is something that we are 

working with Leonardo, though, on. They have some level of civil certification and we are just working with 

them to make sure that that is enough for us to actually finalise that. So they actually have some certification 

through the European aviation safety authority. We have to have an overview of that. So there is some cost to us, 

but essentially Leonardo provide us with their certification information that they have already put together. 

Senator FAWCETT: So at least as an offset, is this an opportunity for us through our structures people— 

flight testers et cetera—to grow the skills and competence of our people who are perhaps not being utilised as 

fully as they could for many of the FMS purchases to do the fatigue testing? I believe explosive ordnance was 

another area that was not covered in the civil certification. 

Air Vice Marshal Roberts: Certainly in terms of the structural certification efforts for the C-27J, we are 

working with the DSTG. There will be certainly a level of Australian involvement in that program. We were 

hoping to join with another country and share some of the certification effort for the C-27J. At this stage, we will 

be able to take in the majority of that ourselves with DSTG input to it. So there will be quite a lot of, I suppose, 

experience and education for people and our engineers in DSTG in Australia for that particular certification 

program. 

Air Marshal Davies: I will add to that. It is likely that the Royal Australian Air Force will be the lead hours 

owner of C-27J in probably about four or five years. So we will need that information—hence the need to lead. 

Senator FAWCETT: This rolls into our new approach to determining value for money when Defence is 

giving briefs to government for first and second pass. Will this kind of follow-on activity, where we identify 

something that is commercially off the shelf but then we have all these add-on costs to make it fit for purpose, be 

rolled in so that government and parliament have a clear view upfront of what the whole of life cost is as opposed 

to just the shelf price? 

Air Marshal Davies: That is one of the key elements of the new capability lifecycle approach. It is identified 

early. It is what the investment committee now need to be able to make a decision, so my answer is yes. 

Air Vice Marshal Roberts: I would add that even though these things sound like they are additional to what 

was asked for in the project, because of the way we have changed the FMS arrangements on this project, we have 



not changed the level of funding that will be required to do the additional elements. So it is all within the current 

project cost as we originally planned it. 

Senator FAWCETT: Sure. Thank you. The PBS also talks about an acquisition of seven non-directional 

beacon systems. My understanding is that the civil aviation world is scaling back NDBs in favour of GPS guided 

approaches. I wonder if you could give the committee an update as to why we are investing in them when the rest 

of Australia's aviation infrastructure is reducing their holding? 

Air Marshal Davies: I would not say we are investing in NDB. It is probably more accurate to say we are 

retaining a number of NDBs for two reasons. One is we still have aircraft that rely on NDB as part of their 

approach or instrument landing criteria. Otherwise they would have only one source. Of course, you know 

yourself that having two certainly gives you more options and allows you to carry less fuel et cetera. So that is 

one part. The second is that, internationally, NDB still prevail. So we have a desire to have NDB training 

available to those crews that would use it. But Air Force intention—and it will be something we will move 

towards—is a medium term NDB retention. We will get out of NDB in due course when those other requirements 

are met. 

Senator FAWCETT: I understand we also have overseas operations and things where people would need it? 

Air Marshal Davies: We do. Internationally, NDBs still exist. There are places that we go to so we need to 

retain that skill set, yes. 

Senator FAWCETT: I had the opportunity to meet with the DOT&E group that used to be headed by Mr 

Gilmore until recently in the States. I specifically discussed with them their most recent report and their memo to 

Congress late last year on the Joint Strike Fighter program. I wonder if you would care to update the committee 

on Air Force's view of that. I think the report as it stood presented a set of facts that raised a number of questions. 

I also spoke to the Joint Program Office. They presented an alternative view of those set of facts that was far more 

optimistic. I am just interested to get on the public record Air Force's view on that report. 

Air Marshal Davies: The Dr Gilmore report is a regular report. It is something we welcome. It does keep in 

clear public view those things about the program. Even as recently as yesterday afternoon, actually, Lieutenant 

General Chris Bogdan at Avalon was talking about F-35 and it being a program that is making good progress but 

still has issues. Dr Gilmore's report highlights those issues. The overall comment I would make is that that report 

is 12 months in lag. It is reporting on what has occurred up to the time of report writing. Over the series of reports 

from DOT&E, there is nothing that remains in the F-35 program that is either not already fixed or the cause of 

which has not been identified and the remediation path set. We are closing off those issues with the program, all 

of them at this point except for the operational testing program, which was due to finish at the end of 2017. They 

will now finish, we think, about March 2018, but there could be some contingency. That is why we are saying 

complete by the middle of calendar year 2018. That still gives us over a year and a half of time for those tests and 

the software load, which is 3F, to be complete well before we start our aircraft arriving for 3 Squadron. 

Senator FAWCETT: I have one final question on the JSF. There has been some media reporting about its 

participation in Red Flag. Can you just update the committee on which models are participating in Red Flag and 

what the outcomes have been? Is it the A model that Australia uses? 

Air Marshal Davies: A models do fly at Red Flag, but I am actually not sure whether it was all A models or 

whether B models flew as well. 

Air Vice Marshal Gordon: My understanding is it was all A models that flew in the most recent Red Flag. 

Some of the statistics that were passed to me out of the scenario is that they launched a planned 207 missions and 

achieved 207 missions. They had a kill ratio of 20:1. They took out 49 of the 51 planned sand sites that they had 

during their missions. So they consider that it was quite a successful deployment. 

Senator FAWCETT: Was that Joint Strike Fighter working in isolation, or was that in conjunction with F-22 

and other platforms? 

Air Marshal Davies: That was in a coordinated mission where many of those tasks of the air to ground and 

air to air were occurring simultaneously with their ability to coordinate both the F-15 and F-16 strikes as well. 

Senator FAWCETT: Sure. I guess I would be interested, given we do not have the same spread of platforms 

that the US does, if there are any aspects of that that you can provide to the committee that look at the 

performance of the Joint Strike Fighter with comparable system elements that Australia may be using in terms of 

its performance against the kind of aggressive threat that was evident in Red Flag. That would be a useful 

benchmark, if you like, to have at this point in its development. 

Air Marshal Davies: Okay. 



Senator FAWCETT: That would be great. My final question, Air Marshal Davies, is around the PC-9 

replacement program. We touched very briefly earlier on your role as a capability manager now that the first 

principles recognition of industry is a fundamental input to capability. Your obligation now is to look at your 

workforce, for example, in aerospace engineering more broadly. I wonder with a program like this coming up 

whether there are opportunities that you see in that program, and the contractual structure we will have with it, to 

exercise Australian industry, DSTG staff or Air Force staff to expand opportunities for them to grow competence 

as part of your management of that FIC? 

Air Marshal Davies: For that particular project, 5428, the PC-9 to PC-21—by the way, PC-21 is parked down 

at Avalon at the moment in 2 FDS colours; it looks magnificent—the shift will not be dramatic. It is not a blue 

suit work force on the flight line. It is a contracted support arrangement. But my understanding, and Air Vice 

Marshal Roberts will be able to expand here, is around it being very similar. Our relationship with Pilatus has 

been very good, allowing both Australian engineering and Australian SNT to remedy a number of issues we have 

had with PC-9, which is a growing number as it ages. That has been a quite harmonious relationship. It is still a 

Swiss company. They produce the aircraft. I do not see that relationship changing. It has been a small but useful 

element of operating the PC-9. 

Senator FAWCETT: AVM Roberts, perhaps I can focus the question a little more for you. With the PC-9, I 

think as Air Marshal Davies indicated, there was work on the empennage, where there were fatigue issues. Both 

Australian industry and government employees did a lot of that engineering work, which developed a whole range 

of skills. But often under the legacy approach to considering value for money, it may be seen as quicker and 

cheaper just to defer everything back to the OEM. What I am looking for is an indication that, as we roll out DIPs 

and we look at our sovereign industrial capabilities, and that workforce crosses uniformed and civilian, Defence 

will be looking proactively for those opportunities to use existing contractual arrangements to deliver whole of 

life—in fact, whole of capability—value for money by growing the competence in our workforce that may in two 

years be supporting the Joint Strike Fighter or some other platform. This may be the most cost effective way to 

actually develop the competence in that aerospace engineering. 

Air Vice Marshal Roberts: I do not know whether that was a simpler question. I think the complexity of it is 

quite significant. I will go to the PC-9 and the PC-21, though, and the workforce that is associated with that. The 

commercial arrangements for the PC-9 involve Pilatus, Airflite in Western Australia and a level of uniformed 

workforce. The contractual arrangements for the PC-21 involve Lockheed Martin as the prime, with Pilatus and 

Hawker Pacific, who do some work on our B-300s as well. We have looked at this very closely. I have had all of 

those industry partners in a room looking at how we maintain the skills that we need to sustain that aircraft, the 

PC-9, for its life of type and the PC-21 moving forward. So we have looked at that for the industry workforce and 

the balance of industry and Air Force mix in there and DSTG. 

Some of the small companies in east Sale, like Aquila, who do quite a bit of design work on the PC-9 now, 

provide us with a link directly to Pilatus when we have had some of those significant issues. Those companies 

will still be involved in this whole sustainment effort for the PC-21. So, in that context, we really are trying to 

maintain the skills that we need to have in Australia to be able to do the level of asset management that we need 

to do in Australia. We will always have to go back to the original equipment manufacturer for some information 

and they will always be involved. In that case, Pilatus will always be involved in both of these capabilities. 

But in a much broader context, in terms of the sorts of things we are trying to do for maintaining our skills 

technically to become smart buyers in the future, in many of our contracts now, even though the arrangements are 

such that we have a very small Commonwealth footprint, we have actually embedded engineers and technicians 

so that they can learn the sort of skills they need to be able to be those future managers. So that is the method that 

we try and use now to grow our workforce. That includes APS grads as well in that workforce as we try to 

develop the skills for the future smart buyer. 

CHAIR: Thank you for that. 

Senator KITCHING: I want to ask about the Shoalwater Bay and the Townsville field training area. There is 

an MOU between Australia and Singapore and it has the status of a treaty. Is that correct? 

Mr Sargeant: Yes. We have an MOU that we have signed on 6 May as part of the joint agreement on the 

comprehensive strategic partnership Australia developed with Singapore. It was announced that Australia and 

Singapore would jointly develop training areas and facilities in Australia. On 13 October 2016, a memorandum of 

understanding on the training area access and joint development initiative was signed by the respective defence 

ministers. This represented formal bilateral agreement on training area requirements. 



Senator GALLACHER: Is that a specific base that is notified in that MOU, or is that any base that we 

operate? 

Mr Dewar: The first point is that it is an MOU so it does not have treaty status. It is an MOU, not a treaty. 

Senator KITCHING: It does not have treaty status? 

Mr Dewar: No. MOUs do not have treaty status. The MOU identifies the scale of the increase that we will be 

offering Singapore. It does identify that we will work on Townsville field training area and Shoalwater Bay 

primarily to provide that. 

Senator KITCHING: Why was that spot chosen? 

Mr Sargeant: As part of the development of the agreement with Singapore, a whole range of options was 

looked at. A range of different training areas were looked at. It was developed in the context of Singapore's 

requirements, the Australian army's requirements. As the negotiations proceeded over a period of months, it sort 

of crystallised that Shoalwater Bay training area and the Townsville field training area were the most suited to 

meet those requirements. 

Senator KITCHING: What were the grounds of suitability? 

Mr Sargeant: There were a number of considerations. One was the Singaporean training requirements—what 

they needed to do when they were doing their unilateral training in Australia. The other was the suitability of the 

infrastructure and existing facilities. Another part of it was the logistics and cost of the various options. For 

example, Bradshaw in the Northern Territory was one option that was looked at early, but the cost of Bradshaw is 

much more expensive and it is not useable for various periods of the year. So all those considerations went into 

the mix. As the process developed, Shoalwater Bay training area and Townsville— 

Senator GALLACHER: Was Cultana in it? 

Mr Richardson: I might add that the ADF requires more training area. There are two things that drive this. 

The main thing is ADF requirements. There is the agreement with Singapore. Singapore was also keen on having, 

for very understandable reasons, training facilities that were close to a largish centre or a centre, which is fine. 

Bradshaw was not suitable on those grounds. Bradshaw is also used a lot by the US marines on a rotational basis. 

Cultana did not quite meet the overall needs. Our ADF preference is to expand Shoalwater Bay and Townsville. 

That also suited our agreement with Singapore. 

Air Chief Marshal Binskin: I will get the Chief of Army to talk about what the requirements are. We get into 

the operational requirements for the raise, train and sustain within the ADF. 

Mr Richardson: Thank you. 

Lt Gen. Campbell: We look at our training areas linked to the key manoeuvre brigades around which the 

Australian army bases its major training activities and then brings together elements of the wider ADF and, 

indeed, the international partners. The 1st Brigade is based principally in Darwin but with elements in Adelaide, 

the 3rd Brigade is in Townsville and the 7th Brigade is in Brisbane. For the Darwin based brigade, we have 

training facilities at Mount Bundey, Bradshaw and Cultana. Cultana provides a very useful all-weather open 

environment manoeuvre space for large formations. Bradshaw is not all year around and there is some 

consideration to the soil composition, wet conditions and so forth. But our requirements centred on large-scale 

manoeuvre operations and training for the 1 st Brigade are covered. In the 3rd Brigade and 7th Brigade, it is less so 

as we continue to develop the capabilities within the Australian army. 

Let me explain that. Our army has over the last four years and continuing adapted its structure so that, as far as 

possible, the 1st, 3rd and 7th brigades are like brigades; they are commonly structured. Those structures are based 

now and into the future on a vehicle equipped brigade model, where we see Bushmaster vehicles, tanks, currently 

ASLAV light armoured reconnaissance vehicles and M113 tracked vehicles. But we will, with the introduction of 

Land 400, see far more modern and capable combat reconnaissance vehicles and infantry fighting vehicles join 

with our Abrams tanks. The combination of vehicles produces both a far more capable brigade effect—the 

combat power is greater—and situational awareness, with the capacity to reach out and influence, and to detect 

and be aware. It is a far more sophisticated brigade. It means that we can operate, and need to operate, with more 

dispersed formations that are interconnected and can reach out and touch our adversaries at far greater distances. 

It ought not congregate en masse in ways that would present for an adversary a very attractive target. So we are 

talking about more powerful, more capable and more mobile but also needing to be more dispersed to be 

effective. 

That has led us to look for the ADF, for the army, to the opportunities available around the Townsville field 

firing range and the Shoalwater Bay training range. As I noted, Cultana presents a lot of opportunity and a lot of 



space. We are always looking in these three brigade areas for a combination of typographies and vegetation. We 

do dismounted operations and closed country operations, mountainous or rugged terrain manoeuvre as well as the 

more open country space, where the larger vehicles would operate. 

With regard to the best development of the skills that are centred around those major equipments of Land400 

vehicles combined with our Abrams tanks, we are looking for the rolling or open terrain corridors that allow for 

the complex manoeuvre of company groups. So that is combinations of 10 to 20 of these mechanised vehicles to 

battalion group. That might be combinations of 50 to 100 vehicles manoeuvring in bands across, as I say, a more 

dispersed environment and over a longer distance around that manoeuvre corridor. We need enough space when 

we wish to use live fire so that the weapons systems can fire safely in the manoeuvre corridor. Any ricochet or 

bounced round will then naturally expend its momentum safely inside a templated area within the range. 

As our weapons systems have become more sophisticated, the distance that those ammunitions fire to and the 

potential for skip rounds to go further means that we need a larger space around the manoeuvre corridor. So in 

places like Townsville or Shoalwater Bay, you see a mixed typography environment, outstanding training for 

dismounted and some training corridor opportunities for mounted in these more sophisticated vehicles. When we 

undertake this kind of training, we need to respect and recognise the environmental management responsibilities 

we have to essentially rotate the training weight on the environment through a number of manoeuvre corridors 

over a number of years to ensure the regeneration of land and the development and maintenance of that 

environment. We have been practising this in quite a number of our training areas throughout our history. We 

appreciate that we need to plan now for the introduction of these vehicles so that we can consistently train and be 

confident of maintaining the environmental integrity of the ranges. 

The additional component that Shoalwater Bay provides for us that is quite unique in the world is the 

opportunity for large-scale amphibious lodgement rehearsal activity. There is opportunity to use the capabilities 

inherit in the two major amphibious vessels, HMAS Canberra and Adelaide, as well as the logistics support 

vessel HMAS Choules. That is an unprecedented capacity in the modern ADF for the conduct of manoeuvre by 

sea and onto the shore. Shoalwater Bay is a location that provides for that in a way that no other range area does. 

You need to look at the combination of the vehicles, the land care responsibilities and the need to present 

challenging and varied training opportunities for our people. They should not become stale and the training 

predictable, such that people are constantly going over the same location every year. If it is the same, training 

becomes boring and ineffective and capability reduces. That is why we are looking first in the ADF for the 

opportunity to expand and, in particular, to expand areas that give us additional manoeuvre corridors for land 

armoured vehicle manoeuvre in and around the Townsville and the Shoalwater Bay training areas. 

In addition to that consideration, we have the agreement with Singapore, which I would say is a wonderful 

opportunity for the development of the military to military relationship. It provides an opportunity for Singapore 

to undertake training activities for their own unilateral professional development and to have combined training. 

Senator KITCHING: I agree. I think that is important. 

Lt Gen. Campbell: So I think there is a strong basis there to sensibly develop the range capabilities now as 

we are planning and putting into service the more sophisticated capabilities that will require that space. 

Senator KITCHING: I want to ask about— 

CHAIR: Give a very, very quick response if you can. 

Senator KITCHING: The compulsory acquisition has obviously been taken off the table. How are we going 

to service, I guess, the needs of that MOU, given that, without that compulsory acquisition, that area probably will 

not be chosen? I understand what you are saying about the training et cetera. But in relation to the MOU, how are 

we actually going to go forward on that if it cannot be there? 

Lt Gen. Campbell: I will turn to my colleagues in the state and infrastructure group. I think that we will find 

opportunities where voluntary land sale enables the kind of training I have described. 

Mr Richardson: It is still possible that there will be enough willing sellers to meet the requirements. We are 

also exploring possible fall-backs, which Mr Grzeskowiak, I think, could enlarge on. 

CHAIR: Would you make your response very quick, please. We are running out of time and we have a lot 

more to cover. So if you do have anything— 

Mr Grzeskowiak: There is not really much, actually, to say. The department is currently talking to a number 

of people about the possibility of selling. As has been said, we are only talking to people who want to talk to us 

and are interested in possibly selling. It is too early to say where that will take us to in detail. 

Senator KITCHING: Do you think— 



CHAIR: Sorry, Senator Kitching. 

Senator KITCHING: I am just thinking commercially. 

CHAIR: Excuse me. 

Senator KITCHING: Will that be a lot more expensive? 

CHAIR: Excuse me. Senator Kitching. 

Senator KITCHING: On notice. 

CHAIR: Thank you. On notice, yes. 

Senator KITCHING: On notice I would like to understand whether that is going to be a lot more expensive 

to have voluntary sales of land rather than the compulsory acquisition. 

Mr Richardson: No. It will not be. That is the answer. 

Senator KITCHING: That is good. Thank you. 

Senator GALLACHER: I would just like to put on the record that we are nowhere near through our brief. So 

the possibility of a spillover day is right on the forefront of my mind and everybody else’s in the room. 

CHAIR: Thank you. 

Senator KIM CARR: While we are waiting for Mr Gillis to return, I am conscious of what Senator Gallacher 

said. Are the officers here that are able to assist us with Land400? I refer to a speech that you gave, Mr Gillis, on 

16 February regarding defence industries. 

Mr Gillis: Yes. 

Senator KIM CARR: Do you know the one? 

Mr Gillis: The ADM presentation? 

Senator KIM CARR: Yes. ADM. Are you familiar? 

Mr Gillis: From memory, yes. 

Senator KIM CARR: I am pleased to hear that. I notice a couple of things. First, not only do you and I share 

a very good name, but you are also a Footscray supporter. 

Mr Gillis: I am old enough to be a Footscray supporter. 

Senator KIM CARR: I am pleased to hear that. 

CHAIR: Is that a public immunity claim? 

Senator KIM CARR: Yes, it is. It is very limited but very successful, I might say. It is a team that has been 

rebuilding since 1954, so it has finally made it. In fact, I have a copy of your speech. You have talked about the 

need to build Australian industry capabilities. You list a whole lot of issues with regard to industry capabilities, to 

establishing force structure, ensuring industry skills are maintained, and training the workforce that is actually 

available, ensuring that we have enough engineers and scientists to support our not only industry but also the 

defence forces and so on. I looked at that, and my office provided you with a series of contracts overnight. I 

appreciate the fact that you have put so much effort into analysing them. It was not intended that you put the 

officers through that session. 

Mr Gillis: When you send us questions, we take it very seriously and put that into our responses. 

Senator KIM CARR: You do. I want to acknowledge to the officers that they have done that. 

Mr Gillis: Thank you. 

Senator KIM CARR: I have also advised my office particularly about the response from Defence when that 

happens. But I am concerned that your aspirations as outlined in this speech, which I concur with, are not being 

met in terms of our acquisitions. Would you like to comment on that? How long will it take to meet the 

expectations that you have raised in this speech? 

Mr Gillis: The speech was talking about the defence industry policy statement and the things where we are 

making changes. But these are things that we cannot change overnight. I think that you have asked about 20 

specific contracts. We do sign in excess of 16,000 contracts at varying levels across the organisation. I will go 

through a couple of them. One of the larger ones there was about Childers. You identified that it is Serco. 




Mr Gillis: In that specific contract, that contract was for Serco, who is the incumbent contractor for the 

maintenance of the Armidale class patrol boats. We require them to go out to Australian industry to do the 

remediation of that particular vessel. That contract was actually won by Austal, an Australian owned company. 

Senator KIM CARR: Can you explain that? 

Mr Gillis: Although that contract under AusTender was to Serco and, as I said before, we had already had 

issues with Serco's ability to maintain those vessels, we required Serco to go to Australian industry to achieve. So 

that is just one of the examples you quoted there, where we actually ended up having an Australian company do 

it. But it is not obvious on AusTender that that second tier actually happened. 

Senator KIM CARR: I come back to the original question. How long will it take to meet the expectations 

that you have raised in this speech in regard to local content in defence procurement? 

Mr Gillis: I think the changes in the finance regulations that we were talking about this morning will have an 

impact. The defence industry policy statement, the establishment of the CDIC, the Centre for Defence Industry 

Capability, and all of these things go together to actually grow a capability in Australia. I refer you to General 

Coghlan on a great example, which is the Land400 example, which is what we are currently going through. 

Traditionally, that would have been a very low Australian industry component or a potentially low Australian 

industry component. With regard to the work we are doing on Land400 in the tendering phase and in the 

evaluation phase and working with those companies, I will pass to General Coghlan. 

Major Gen. Coghlan: I will give you an example from Land400. When the defence industry policy statement 

was released last year, we were ready to make a decision on our downselect. We took a pause to ensure that our 

Australian industry content plan was in line with the new defence industry policy statement. We used an 

independent company to conduct extensive discussions with industry and to look at our plan. They came back and 

said we had a clear and strong alignment with the policy. However, they did recognise that we could improve. 

There were four areas. The first one was that we needed to example the implications of the policy to improve 

Australian industry for Land400. 

I will just rephrase that. The four additional things we required the tenderer to do was to develop an 

opportunity to roadmap, indicating opportunities for Australian industry to become involved in the acquisition 

and support chain. There have been approximately 3,200 visits to the Land 400 website, and approximately 1,100 

of these have occurred after the roadmap was published. Another is to participate in defence facilitation 

showcases throughout Australia, where Australian industry can directly pitch their offerings to the primes selected 

for downselect. Another is to develop costed options at differing levels of Australian industry participation in the 

acquisition and support of Land 400 Phase 2, which may include a best price acquisition option, an option that 

includes Australian made components, an assembled in Australia option and for an option for a higher level of 

Australian manufacturing. Finally, opportunities for graduates, cadets or apprentices within the tenderer and 

Australian supplier network of any future acquisition and support contracts have to be identified. 

In support of the workshops, we conducted workshops throughout Australia between 7 October and later in the 

year. And 408 Australian and New Zealand companies registered to attend the workshops. Of them, 337 attended 

and presented their capabilities; 335 were Australian companies and two were New Zealand companies. These 

workshops were held in Geelong, Melbourne, Perth, Adelaide, Darwin, Townsville, Brisbane, Newcastle, Sydney, 

Canberra, Burnie and Hobart. In each workshop, the Australian company had the opportunity to pitch to four 

senior representatives from Rheinmetall and BAE. That was highly successful. In fact, a number of contracts or 

requests for quotes have been achieved outside the Land400 domain as a result of that workshop process. 

Senator KIM CARR: That is very good to hear. When do we expect the downselect process to be completed? 

Major Gen. Coghlan: We are due to go to government in the first half of next year. 

Senator KIM CARR: Next year? 

Major Gen. Coghlan: We are currently on track. We are going through a 12-month risk mitigation activity. 

The vehicles are currently at Puckapunyal undergoing testing. They will soon move to the Northern Territory for 

hot, dry and wet testing. 

Senator KIM CARR: To evaluate. Yes, okay. When do you expect an announcement to be made about the 

successful bidder? 

Major Gen. Coghlan: We are due to provide advice to government in the first half of next year. 

Senator KIM CARR: So it is essentially the same timeline. The Victorian government announced last week 

that Rheinmetall had shortlisted Victoria as a possible site for the company's military vehicle centre of excellence. 

Have there been any other commitments entered into or offered? 



Major Gen. Coghlan: So Rheinmetall took an innovative approach. They went out to tender to state 

governments. They have down-selected two states for two final consideration—Queensland and Victoria. The 

Commonwealth has no position. The minister has stated publicly that where the vehicles will be built will be a 

commercial decision. That is up to the interplay between the tenderer and the states. 

Senator KIM CARR: It has been put to me that in regard to the submarine contract, though, the question of a 

national approach to industry development is one that industry wants to see but that has not necessarily been 

followed through at a government level. How do you respond to that suggestion? 

Mr Gillis: I think you had the answer from Stephen Johnson. We are doing a very similar industry 

engagement with very similar numbers across a range of industries and a number of organisations. The 

engagement has been very significant. 

Senator KIM CARR: For instance— 

Mr Gillis: The difference fundamentally is that we have an existing designed vehicle, so that we now know 

exactly what the requirements are and we can work directly with industry to say, 'Manufacture me a seat or a 

harness,' or a whatever. With the submarine, we are still in the very early stage of a preliminary design. Therefore, 

the engagements will be 'what is the capability level' as opposed to 'what is the actual Australian industry ability 

to manufacture a particular piece of equipment'. 

Senator KIM CARR: So has DCNS actually advised the government where they will put their design centre? 

Will it be in Australia? 

Mr Gillis: I will get Stephen Johnson, the head of the submarine program, to answer that question. 

Senator Payne: Are you finished? 

Senator KIM CARR: No. I have not. But it follows directly on from the question I just asked. 

Mr Johnson: So the question is: where is the design centre? 

Senator KIM CARR: Has DCNS advised the department where their design offices will be located? Will 

they be in Australia? 

Mr Johnson: That is a multipart answer. The design itself will predominantly be done— 

Senator KIM CARR: Our deputy chair has drawn our attention to the length of the answers. The multipart 

will be terrific. Brevity will also be appreciated. 

Mr Johnson: The design itself will be centred in Cherbourg, France. 

Senator KIM CARR: So the design centre? 

Mr Johnson: We will have our own building in France. Within that building, we will have about 100 

Australian support staff. At the end of the design, all the design authority and all the people, skills and intellectual 

property will be resident here in Australia. In between, we are working out at what point we transfer which part of 

that work. So it starts to a certain degree with training our people, doing the design and then bringing it to 

Australia. 

Senator KIM CARR: When do you expect that to occur? 

Mr Johnson: The design is starting now. Our personnel will start moving in June and July. They will be there 

for about five years. Some of them will be there a bit longer. The point at which we will bring the design to 

Australia will be not later than as we get ready to deliver the first ship. But it could be earlier. 

Senator KIM CARR: And where will that centre be located in Australia? Do you have any advice on that? 

Mr Johnson: We expect that we will do that at the shipyards so that we can collocate that design authority 

with the construction. 

Senator KIM CARR: I see. Thank you very much. I return to Land 400. At the last estimates, Major General, 

you indicated that the expected date for the operational capability will be to 2024. When will the first vehicles 

actually be available for the ADF? 

Major Gen. Coghlan: Noting we are currently in a tender situation, we expect 2020. The 2024 is an FOC 

figure. It is final operating capability, which is planned for the fourth quarter of 2024. For the phase 2 vehicles, 

the combat reconnaissance vehicles— 

Senator KIM CARR: So will the new finance department directives apply to those tenders? 

Major Gen. Coghlan: The AIC is a key component of that. 

Senator KIM CARR: So we expect that to happen. I will put the other questions on notice with regard to 

some technical answers that I was seeking. I appreciate your answers. 



Mr Gillis: To go back to your original question about my speech and the presentation, as you can see, the 

investment we are making in engaging with Australian industry across the board has been significant. Not in my 

20 plus years involved with acquisition have I seen the government engaging with a level of industry that we are 

doing now. How long will it take? It will have to cascade through those many thousands of contracts that we 

have, so it will take us time. I can give you a commitment that the effort that we are putting in now is as much as 

we have in our capacity to actually deliver. That is focussing on those very big programs and big campaigns, 

which generate the most jobs. 

Senator KIM CARR: Let us take a specific case in terms of this process you mentioned—Defence Force 

parade shoes. What is the situation with those? 

Mr Gillis: While the general is looking for those, you have asked a lot of questions about uniforms. 

Senator KIM CARR: For good reason. 

Mr Gillis: One thing I will say is that the system program office that does our uniform purchasing for the 

Australian Defence Force has been doing an absolutely outstanding job. It is the Diggerworks program. The 

United Kingdom is coming to Australia to potentially establish what they would call a tommy works, which is 

best practice in how you develop combat clothing anywhere in the word. I would put us up against any other 

nation in the world in what we actually deliver. The team that delivers that has done an absolutely outstanding 

job. 

Senator KIM CARR: I think the combat uniforms are one thing. There is a high level of local content in 

them. I am interested in some of the dress uniforms. 

Mr Gillis: It is the same team. This is a great— 

Senator KIM CARR: They are not manufactured here, are they? 

Mr Gillis: No. But this is a great team of individuals doing this job. 

Senator KIM CARR: Well, that is not the question. I am not going to the quality of the public servants here. I 

am going to the quality of the uniforms and whether or not they are made here. Australian military personnel 

should be clothed in Australian manufactured garments. That is the proposition I am putting to you. I am asking 

you particularly now about the boots. We do have good boot manufacturers still in this country, do we not? 

Major Gen. Coghlan: What type of boots are you talking about? There are parade boots. 

Senator KIM CARR: The parade boots. 

Major Gen. Coghlan: There are combat boots. The parade boots for the Australian army are the R.M. 

Williams boots. 

Senator KIM CARR: R.M. Williams boots? 

Major Gen. Coghlan: Yes. 

Senator KIM CARR: And we will maintain that? 

Major Gen. Coghlan: Yes. We have an ongoing contract with them. 

Mr Gillis: We are one of the largest contractors that R.M. Williams has in Australia. 

Senator KIM CARR: And where are the parade shoes and the army dress uniform boots made? 

Major Gen. Coghlan: They are the same boot now. 

Senator KIM CARR: The same boot. What is the size of that order? 

Major Gen. Coghlan: For financial year 2016-17, our expenditure was $1.13 million in R.M. Williams. 

Senator KIM CARR: When does that contract run out? 

Major Gen. Coghlan: The initial contract was signed on 8 August 2013 for five years, with four optional or 

12-month options to extend past that time. 

Senator KIM CARR: And when does that matter come up for renewal, then? 

Major Gen. Coghlan: So 7 October 2018 is our first option to extend. As of a couple of weeks ago, we have 

issued 42,445 pairs of the R.M. Williams boots with another 3,500 within the supply chain. 

Mr Gillis: We have been very pleased with the quality of the product. For any of the senators that are in 

Salisbury in South Australia, I would commend a visit to the R.M. Williams factory. I have been buying them 

personally for a number of years. I now see that— 

CHAIR: I can see them. 

Mr Gillis: I think if you look under the table— 



Senator KIM CARR: They look very good to see. 

Mr Gillis: You can see a series of them. 

Senator KIM CARR: I do not know how that will appear in the Hansard. 

Mr Gillis: Senators, I would recommend that if you are buying these things, going to the Salisbury factory is 

an experience well worth doing. 

Senator KIM CARR: So what footwear are Pacific Brands and Workwear Group providing? 

Major Gen. Coghlan: They provide the dress and court shoes for Navy and Air Force. They are supplied by 

the Workwear Group. That contract was signed on 7 October 2013 for a five-year initial term, with four 12-month 

options to extend. 

Senator KIM CARR: And why not R.M. Williams? 

Major Gen. Coghlan: They are a different item. Navy and Air Force have dress and court shoes. The court 

shoes are for females. Army no longer has that line. 

Senator KIM CARR: But presumably the dress shoes were of similar type to the R.M. Williams, were they? 

Major Gen. Coghlan: No. They are shoes. 

Mr Gillis: One of the issues for the Navy is that a white boot— 

Senator KIM CARR: A white boot? Is that what you mean? 

Mr Gillis: It was a controversial issue. 

CHAIR: Like Footscray. A white boot. 

Mr Gillis: I will not go there. 

Senator KIM CARR: And what was the reason? R.M. Williams do not provide that? 

Mr Gillis: R.M. Williams can. It is an issue of the dress uniforms and the chiefs of the Navy and the chiefs of 

Army and Air Force et cetera. They have their different standards of what they expect. 

Senator KIM CARR: What—R.M. Williams did not meet that? 

Mr Gillis: No. 

Major Gen. Coghlan: They do not make shoes. 

Mr Gillis: They do not make shoes. They are a boot manufacturer. If you are wearing shorts, you need to have 

them, and if you are wearing a dress. There are different requirements for uniform. It is very complex. Military 

uniforms are a very complex area. 

Senator KIM CARR: I hear that. Where are the Royal Military College's graduation uniforms manufactured? 

Major Gen. Coghlan: There was a contract out last year. It was a limited tender. They are made in China and 

Fiji, as are other ceremony uniforms. 

Senator KIM CARR: I see. Why is that? 

Major Gen. Coghlan: There was a limited tender. The current company that makes those uniforms for the 

remainder of the Defence Force, including ADFA, won that tender. It is Australian Defence Apparel. 

Senator KIM CARR: A limited tender? 

Major Gen. Coghlan: A limited tender. 

Senator KIM CARR: What—there were no Australian manufacturers able to make them? 

Major Gen. Coghlan: ADA is an Australian company. 

Senator KIM CARR: It is an Australian company but it is manufacturing offshore? 

Major Gen. Coghlan: It is manufacturing offshore. All those uniforms have been manufactured offshore 

since 2003 under successive governments. 

Senator KIM CARR: Now with the new guidelines, will that change? 

Major Gen. Coghlan: I am unsure, because when we went out to tender for the service dress uniform, no 

Australian manufacture option was presented by the tenderers. 

Senator Payne: Which we discussed on the previous occasion. 

Senator KIM CARR: We have discussed this before. I have already put to you how on other occasions that 

was not the case with regard to the exemptions to that arrangement. I am also told that R.M. Williams do produce 

shoes. 



Senator Payne: They produce women's shoes, certainly. 

Major Gen. Coghlan: I will correct myself. They produce women's shoes. 

Senator KIM CARR: You indicated before they were not eligible to make them. 

Major Gen. Coghlan: I would not say eligible. On that contract there were three tenderers—Pacific Brands, 

Workwear Group, Baxter and Company, Jroberts Manufacturing, Taipan Footwear and a fourth tenderer, Trans 

Global Footwear Trading. So it would appear that R.M. Williams did not tender for that contract. 

Senator KIM CARR: And where are Pacific Brands manufactured? 

Major Gen. Coghlan: They are made in China and have been since 2003. 

Senator KIM CARR: I am not concerned about the date on which this process started. I am concerned about 

what is happening now. 

Senator Payne: I am sure you are not. 

Senator KIM CARR: Frankly, if I had known, I would have said something at the time, as we did about the 

slouch hat and a few other items. The point is there are provisions even in the old guidelines to do something 

about this. Now we have new guidelines, I am interested to know what impact the new guidelines will have for 

these procurements. 

Major Gen. Coghlan: In this procurement, it was a $920,000 contract. 

Senator KIM CARR: So it does not count? 

Major Gen. Coghlan: My current understanding is under $4 million, but I would have to take advice. 

Senator KIM CARR: Thank you. Thank you very much. I will leave it there. 

Senator LUDLAM: This is my last batch. 

CHAIR: Try and keep it fairly short, if you can. 

Senator LUDLAM: I will do. I will try to race through them very quickly. Can we please get a current cost 

estimate for the unit price of an F-35 Joint Strike Fighter? I am asking in the context of cost reductions that the 

US President appears to have negotiated with the contractors and possibly the government of Japan. So what are 

we looking at here in Australia? 

Mr Gillis: I will wait for AVM Gordon to come to the desk. 

Senator LUDLAM: This is open source reporting. I think the Japanese government appear to have negotiated 

a six to seven per cent reduction per aircraft, which is similar to what has happened in the US. 

Mr Gillis: Could you repeat the question? 

Senator LUDLAM: Yes. No trouble. I am looking for the current estimate of the unit cost of an F-35 Joint 

Strike Fighter for Australia. 

Air Vice Marshal Gordon: Our air cost model is based on an average unit flyaway cost of US$90 million. 

Senator LUDLAM: US$90 million. Is that a reduction on the last time you were asked that question? 

Air Vice Marshal Gordon: No. That has not changed. 

Senator LUDLAM: I do not know whether you were listening in from the other room or not. There appears to 

be a cost reduction in the United States and Japan. Has that not flowed through to the Australian proposed 

purchase? 

Air Vice Marshal Gordon: The most recent negotiated price for an F-35A is $94.6 million. That price is a 

reduction for lot 10 from the previous lots. That price, of course, has flowed through to Australia. We are 

estimating that there will be further reductions in the F-35 price. Indeed, yesterday at the Avalon air show, 

General Bogdan set the goal of an average price for an F-35A of $80 million. Previously he had been aiming at 

$85 million. So we do expect that those reductions will flow on to us. 

Senator LUDLAM: What does that amount to as the total capital cost or the total purchase price before we 

get into sustainment for the whole fleet? 

Air Vice Marshal Gordon: I am sorry, Senator, but I do not quite understand. 

Senator LUDLAM: Total cost of the acquisition. 

Air Vice Marshal Gordon: What is the total cost for the project? 

Senator LUDLAM: The total estimated cost. 

Air Vice Marshal Gordon: The current approved project cost is $17.2 billion. 



Senator LUDLAM: If the reductions all the way down to $80 million come through, what would we be 

looking at then? 

Air Vice Marshal Gordon: I would have to calculate that, I am sorry. 

Senator LUDLAM: No dramas. Is that acquisition or is that sustainment over the life of the plane? 

Air Vice Marshal Gordon: They are the acquisition costs. 

Senator LUDLAM: What are the estimated total sustainment costs over the life of the aircraft? 

Air Vice Marshal Gordon: We do not have an estimate for the total life of sustainment at the moment. We 

have an approval for sustainment into the early 2020s and then we are due to come back to government with the 

figures for the life. 

Senator LUDLAM: There are estimates floating around—I do not know how reliable they are—for the total 

sustainment cost of the submarines. How come you cannot even provide us with an estimate for the aircraft? 

Air Vice Marshal Gordon: We have an estimate as to what it will be, but I would not put that as a figure at a 

Senate estimate inquiry. 

Senator LUDLAM: Why is it a secret? This is a budget estimates committee. This is what we need to do. 

Air Vice Marshal Gordon: I will have to take it on notice what the figure is. At the moment, the approval 

from government was to the early 2020s. 

Senator LUDLAM: What is the estimated life of the aircraft? How far into the future will be they operating? 

Air Vice Marshal Gordon: We are estimating their life of type will be around 30 to 35 years. 

Senator LUDLAM: You do not even have an estimate of 90 per cent of the estimated life of the aircraft as to 

what they are going to cost. Can you take on notice to provide us with the figure? If you do not have it with you, 

that is okay. 

Air Vice Marshal Gordon: Yes. Sure. 

Senator LUDLAM: What are their capabilities of the two aircraft that flew into Australia the other day that I 

gather are now down at Avalon and will be for the next little while? Are they just training aircraft, or are they 

ready to fly into battle? What can they and can they not do? 

Air Vice Marshal Gordon: Those two aircraft have the block 3I software loaded on them, which is not the 3F 

software that we will have delivered in our block 10 aircraft, which we are going to take to IOC. 

Senator LUDLAM: Just help me out with the acronyms. 

Air Vice Marshal Gordon: To our initial operation capability in December 2020. So there are some 

additional capabilities that will be delivered between now and when that block 3F software is loaded. So it is not 

the capability that we have agreed with government to deliver for that initial contract. 

Senator LUDLAM: This is just these two aircraft that I am talking about now. 

Air Vice Marshal Gordon: That is right. 

Senator LUDLAM: Apart from the software changing from 3I to 3F, do they lack anything else? 

Air Vice Marshal Gordon: It is mainly software. 

Senator LUDLAM: So what else? 

Air Vice Marshal Gordon: Recently released weapons in the US. As the program rolls out, the final 

capabilities as part of the system design and development—the demonstration phase—will be applied to those 

aircraft. 

Senator LUDLAM: But the hardware is identical to what will be the final build of the aircraft? The software 

weapons— 

Air Vice Marshal Gordon: The hardware is largely identical. There are some minor elements that are still 

going through their final firming up of the design, but they are small elements. Over 95 per cent of the aircraft is 

physically set. 

Senator LUDLAM: In order to not tie us up any longer here, could you table a bit of detail about what is in 

that other five per cent, just in case it becomes important later? 

Air Vice Marshal Gordon: Certainly. 

Senator LUDLAM: I gather from previous sessions on this aircraft that stealth is a No. 1 attribute. It has been 

criticised on a whole range of grounds as being an inferior aircraft to other fifth and even fourth generation 

aircraft. But stealth has always been posed as its area of superiority, I suppose. 



Air Chief Marshal Binskin: I will get AM Davies to take you through that. Like always, it is a bit more 

complex than that and there is a bit more to the answer, but I think he will be able to give you— 

Senator LUDLAM: I turn up to learn stuff. That is fine. 

Air Marshal Davies: Low observability is a design feature of the F-35. It is an important element to allow the 

aircraft to be able to see a potential enemy and take the first action. The other larger parts of the F-35 make-up 

that make it fifth generation is its ability to coordinate and integrate disparate elements of sensors into one picture 

and then distribute that picture to any number of aircraft, ships and land components. 

Senator LUDLAM: So it is being described as a node in a network rather than a centre? 

Air Marshal Davies: Absolutely. 

Senator LUDLAM: Its ability to not be seen has been cited in these hearings and widely elsewhere as being 

one of its key capabilities. 

Air Marshal Davies: It is one of its key capabilities. 

Senator LUDLAM: I only recently came across this, but you guys do this for a living. Have you come across 

a Chinese radar system known as a quantum radar, which would completely make obsolete the stealth capabilities 

of the aircraft? They are not deployed, but it is just being written up in the defence process as something that 

exists. 

Air Marshal Davies: I read the same article. For as long as we have been fighting, we have had evolutions of 

different elements. That is range, accuracy and detection. This is a report that at this point we have no foundation 

and no substantiation of. Are there developments that will reduce the effect of low observable technologies over 

the next 20 or 30 years? It would be ridiculous to say there are not. But at this point, it is not simply a question of 

saying, 'There is a new radar; therefore, the F-35 is obsolete.' 

Senator LUDLAM: That is not what this article says and it is not what I am putting to you. 

Air Marshal Davies: Okay. It is an effect of an entire kill chain. It is about being detected. Anyone who 

would want to, in this case, affect the F-35 or its mission would need to track it and would need to be able to hold 

it long enough to be able to have an effect on that aircraft. There are a set of circumstances that would go to the F- 

35 being obsolete in that context. Therefore, at this point, we are not concerned with the report in terms of the F- 

35 being ineffective. 

Senator LUDLAM: I am getting the wind-up by the chair, so I might put these last two on notice, if I may. 

Firstly, in relation to what we are discussing here, could you provide us with any evidence that you have taken to 

validate that claim? You do not seem overly concerned? 

Air Marshal Davies: Not at this point, no. 

Senator LUDLAM: If you can provide us with the basis of your confidence that it is not going to render a 

$17 billion investment obsolete within the life of the aircraft, I would appreciate it. I guess as these aircraft arrive 

in Australia, this next issue is going to become more and more relevant. There is a lot of reporting about the 

weight of the helmets and how low-body-weight pilots might find their spine snapped if they are caused to eject. 

Firstly, are you aware of those claims? Secondly, what is your view of them? 

Air Marshal Davies: The helmet is extremely effective. Our four pilots have been flying with the helmet. 

They have no issue with the helmet in terms of their weight or their ability to eject should they need to. 

Senator LUDLAM: Has anybody actually ejected out of one of these aircraft or in a simulator with that 

helmet on? 

Air Marshal Davies: No. 

Senator LUDLAM: How are you able to make that claim? 

Air Marshal Davies: The claim is actually around not having yet tested below a certain body weight for a 

pilot. When that testing occurs, we will find out what the minimum body weight is to meet that criterion. At the 

moment— 

Senator LUDLAM: Is that a computer simulation, or does somebody have to have their neck broken? 

Air Marshal Davies: That criterion for our pilots is not an issue. 

CHAIR: Thanks very much, Senator Ludlam and Air Marshal Davies. 

Senator GALLACHER: I want to clear up a couple of issues. Have you got two seconds? You told us you 

did not have a fast card at the last round of estimates. Defence has given a submission to the committee to say that 

you do have a fast card. Who is correct—you or the defence department? 



Senator Payne: I do not have that Hansard in front of me. I do not recall the specific conversation, I am sorry. 

I will check that. 

Senator GALLACHER: Well, I have the Hansard here. 

Senator Payne: Well, that makes one of us. I will check that and come back to you. Thank you. 

Senator GALLACHER: Very clearly, you said you had no fast card. 

Senator Payne: Senator, I have just said that I would like to check the Hansard and I will get back to you. 

Senator GALLACHER: What Defence has said to us in evidence is both yourself and Minister Pyne do have 

a fast card for 2015 to 2016 and have also expended funds on it. 

Senator Payne: I understand the point you are making. I do not recall the conversation that we had. I do not 

have the Hansard. But I will check and come back to you. 

Senator GALLACHER: It is 19 October on the Wednesday. 

Senator Payne: I will check and come back to you. 

Senator GALLACHER: I will try to clear up one other issue. Secretary Richardson, in relation to a question 

about why we had credit cards to the value of $2 million, your answer was that we need to provision ships. 

Secretary, are you familiar with the SONPAS contract? 

Mr Richardson: No. I am not. 

Senator GALLACHER: So you are not familiar with a contract which has been held for many years by a 

company which provisions our ships? 

Mr Richardson: We have thousands of contracts. I do not personally get involved in them. But there will be 

someone here who will be familiar with it. 

Senator GALLACHER: Is there anybody who has information about SONPAS? 

Mr Richardson: Yes. The chief financial officer, I think. 

Mr Prior: I understand the question was? 

Senator GALLACHER: SONPAS. What is the contract for? It is to provision ships. Your answer was that 

you give credit cards out so they can fill a ship up or provision it, but you have a contract which is— 

Mr Richardson: I gave that as an example. There have been instances where individuals have needed to 

utilise contracts in respect of certain aspects of that. There have also been examples of the cards being used when 

a lot of people are involved in something and you use one card rather than multiple cards. 

Senator GALLACHER: I think the direct answer was that you provision ships and you need to have a credit 

card of a very high value for that. 

Mr Richardson: For some aspects of it, yes. 

Senator GALLACHER: My question to you is: are you aware of the contract which your department has 

which relates to shore based provision of Navy ships in many ports around the world? 

Mr Richardson: And I have given my answer to that. And the Chief of Navy might be able to help. 

Vice Adm. Barrett: The SONPAS contract is used by Navy to resupply ships in certain ports both around 

Australia and can be used overseas. It is not exclusive as a means of resupply for ships. 

Senator GALLACHER: My curiosity is how do you manage one of these $2 million credit cards? Do you 

courier them to a ship that might need it, or does someone always travel with it? How do you do that? 

Vice Adm. Barrett: We plan our deployments. Where we know there are ports that are not capable of taking 

or using SONPAS, we made provision to the authorised person on board who has delegations and authorities and 

training in how to manage funds. They will be given the provision of one of those cards. 

Mr Prior: I will also add that, with the so-called million dollars credit card limits that were in place as a 

matter of practice, which the auditors brought to our attention, it was a practice of convenience rather than one of 

relating to the acquisition levels. Since that time, we review annually all credit card limits. The report I have in 

front of me and which I ran yesterday from our credit card system has as the highest level of limits for purchase 

cards—there are a number—$500,000. They can relate to things such as, and as the Secretary said, when 

acquisitions are being made on behalf of a number of people, where there is an exercise, and where there is an 

acquisition overseas for supplies and goods and services. 

We regularly monitor them now, so it is not the case that there is an unlimited credit card wandering around. 

We monitor all the cardholders who have those credit cards with high levels of limit. When the level of activity 



for those credit cards reduces down because the event may have occurred or there is not an event about to occur, 

we reduce them down to an appropriate level to match the activity. But there are a number of circumstances 

where it can be the case that there is a need for an acceptable means of conducting a business internationally and 

nationally when there are multiple people involved. 

Senator GALLACHER: So you do not have any $2 million credit cards? 

Mr Prior: There are no $2 million credit cards at all. 

Senator GALLACHER: I return to 16 October last year, where the reply to my question was we need to fuel 

a ship. So we have a contract to fuel a ship and now we do not have any— 

Mr Richardson: The Chief of Navy just gave you an answer to that question. What you just said there is 

wrong. The Chief of Navy — 

Senator GALLACHER: What part of what I said is wrong? 

Mr Richardson: Well, he said we have a contract that covers certain countries. There are certain ports that 

naval vessels visit where there is a need to have large scale purchases through the use of credit cards. Where that 

occurs, both Chief of Navy `and the chief finance officer gave you a very specific answer as to the process that is 

worked through. 

Senator GALLACHER: My next question is: how do they actually manage that credit card? Is it in the name 

of the organisation or a person? 

Mr Prior: No. All credit cards are issued to individuals under their name. 

Senator GALLACHER: Does that person have to travel with the ship? That is my obvious question. 

Mr Prior: Well, individuals travel, as you can imagine, all around the world. So for individuals that have a 

requirement to purchase goods and services for the department, where they are located internationally or 

nationally, clearly they would have a credit card made available to them. It is a process. 

Senator GALLACHER: I want to ask this very direct question to either Navy or finance; I am not really 

fussed which one. SONPAS is an eminently reasonable way of victualling ships around the world. How many 

exceptions would there be—if you have to take it on notice, that is fine—where you need to give someone a $2 

million credit card to buy some whatever? 

Mr Richardson: We just said that there are no longer any $2 million credit cards. 

Senator GALLACHER: Was there on 16 October? 

Mr Richardson: It was just 10 minutes ago that the chief financial officer took you through that very 

specifically and explained that the maximum limit was now a half a million dollars and how that worked. 

Senator GALLACHER: On 16 October, when you gave that direct answer to my question— 

Mr Richardson: And that was a correct answer. 

Senator GALLACHER: were those credit cards in effect and were they being used? I am happy for you to 

take that on notice. 

Mr Richardson: I am very happy to take it on notice. 

Senator GALLACHER: Your answer led me to believe that they were being used to fuel and victual ships. 

Mr Prior: I repeat: we do use credit cards in different circumstances where— 

Senator GALLACHER: Well, let us have it on notice. 

Mr Prior: Where there is not an arrangement in place that a purchase order in the normal case could be 

utilised. There are parts of the world where—and I will not go into detail — 

Senator GALLACHER: And I fully understand that. 

Mr Prior: Okay. 

Senator GALLACHER: I fully understand that. 

Mr Prior: That is the case. 

Senator GALLACHER: My question was very generic and it got a very direct answer, saying, 'We needed to 

do this.' How many ships are there in the world? They do not go around with credit cards. They have proper 

arrangements with people who supply ships. 

Mr Richardson: We have given you an answer and quite a detailed answer. What we have not answered we 

will take on notice. 



Senator GALLACHER: Thank you. I have 13 areas I want to cover, so it is unlikely we are going to get 

through this. The next is the consolidation of defence bases. You have 75 major bases with apparently a gross 

replacement value of $68 billion. The first principles review, and I think Defence is saying, says you are caught in 

an unsustainable cycle of insufficient funding to maintain the current estate footprint. Is that an incorrect 

statement, or is that a statement that Defence is standing by? 

Mr Grzeskowiak: Certainly in these forums over years we have talked about the forward workload of 

particularly estate maintenance that we have had to do and the decline in the remaining useful life of the Defence 

estate. We have been talking about it for some years. The defence white paper that was released last year put a 

correction into the system, if you like, in terms of putting significant extra funding over the next decade into the 

estate and infrastructure space. So while there is a lot of work to do for us to improve the overall remaining useful 

life of the estate, we are now on a positive trajectory. So as I look forward in a budget sense, I see increasing 

funds for both capital investment in renewing parts of the estate and in estate maintenance in terms of being able 

to maintain the existing estate. So that is an improving story at the moment. 

Senator GALLACHER: An improving story? 

Mr Grzeskowiak: Yes. 

Senator GALLACHER: So given that we appear to have an extremely large and valuable estate but we are 

not in a position to fully maintain that footprint—I have seen some of the expenditure in the public works area, 

where you have had to remediate significant areas of land—what progress is being made, if any, in addressing the 

disposal of the 17 bases identified in the 2012 future defence estate report? 

Mr Grzeskowiak: The government in recent years has made some decisions about disposing of some 

properties. One of them is Leeuwin barracks in Western Australia; one of them is Bulimba barracks in 

Queensland; one of them is the Pontville training range in Tasmania; and one of them is a former married quarters 

at Inverbrackie in South Australia. The Pontville range has been sold and disposed of. The Inverbrackie former 

married quarters has been sold and disposed of. We are working through processes at the moment around the 

disposal of Leeuwin barracks and Bulimba barracks. I would expect through the rest of this year those properties 

to go to market. 

Senator GALLACHER: So in terms of the footprint, I am not familiar with those bases. I would not imagine 

that the Tasmanian base is a huge geographical spread. In terms of reducing your footprint, are they significant 

sites? Are they the big ones or the small ones? 

Mr Grzeskowiak: Leeuwin barracks is a significant property. Bulimba barracks is a significant property. It is 

really reducing the number of sites where we have people and a need to maintain that is important. The scale of 

the Defence footprint, being close to three million hectares, is actually dominated by the training ranges. So all 

the big training ranges are the bulk of the footprint. But there are 70-odd major bases and 400 other sites. So we 

are looking at rationalisation. In terms of the overall footprint, it is a fairly small percentage, but it is significant 

for us in terms of being able to repurpose those former Defence bases for alternative community use and to 

consolidate our presence into places that we already own as we invest in improving the condition of those 

facilities. 

Senator GALLACHER: Have you made progress on three or five of the 17 identified, or are these 

components? 

Mr Grzeskowiak: I would have to check the bases that were listed in the 2012 report. 

Senator GALLACHER: Perhaps you could take that on notice. How many of the 17 identified in the 2012 

report have you made progress on? 

Mr Grzeskowiak: Yes. I will take that on notice. 

Senator GALLACHER: Given that it is now 2017, that is a five-year-old report. Is there no urgency in this 

area, or are there contests between Defence's reasonable operational requirements and your obvious financial 

imperatives? 

Mr Grzeskowiak: Since the first principles review and the implementation, the way we would look at this 

now is maybe different than the way we would look at things in 2011 as that 2012 report was being built. So we 

would look in terms of the strategic centre and the force design work and the future projections for where we need 

to be as being one of the primary inputs to future disposition of the estate. We are working through that at the 

moment. The reality is that the future estate disposition is something that is always under review to some extent. 

Senator GALLACHER: I will be very, very specific. How do you actually manage to dispose of a base? Do 

you say, 'Look, this is the one that you want to do.' You then meet with Air Chief Marshal Binskin and say, 'Are 



you happy for us to close this base?' , and you both tick off on it and that is what happens? Is there any example of 

that happening? 

Mr Grzeskowiak: Ultimately, decisions are made by government. Ultimately the decisions are made by 

government. The first principles review made a recommendation about disposals and the response to that 

recommendation was that individual sites would be considered on a case-by-case basis. 

Senator GALLACHER: Perhaps the secretary would know. Have any of the defence ministers that we have 

had since 2012 actually signed off on the disposal of a whole base in the 17? 


Mr Grzeskowiak: Leeuwin barracks, as I said, was signed off by government. Bulimba barracks was signed 

off by government. Pontville was signed off by government. And Inverbrackie. 

Senator GALLACHER: But you cannot really tell me whether they are in the 17 identified? 

Mr Grzeskowiak: I just need to confirm how many of those were in the 17. 

Mr Richardson: Certainly some of them were. 

Mr Grzeskowiak: At least two of them were. 

Senator GALLACHER: So how would you characterise the progress? Are we three out of 17 or five out of 

17? 

Mr Grzeskowiak: I think we are making progress. There is a range of disposal options around smaller sites 

being looked at all the time. We have talked about one of them earlier in the committee today. 

Senator GALLACHER: So since the last update you have given us, can you address anything that has 

happened since then? Since the last update, have any additional bases been added to the list for consolidation? 

Mr Grzeskowiak: The list that you are referring to—the 2012 list—is of its day. As I said, we are constantly 

looking, as the future force evolves, at what our posture should be and disposition for the future and developing 

options where we may need to adjust. 

Senator GALLACHER: We have heard at length from the Chief of Army that you have a well-thought-out 

training regime going on. Has there been any impact on Defence skills and capability as a result of this proposal 

to reduce your footprint? 


Senator GALLACHER: And from your perspective, it is all working entirely well? 

Air Chief Marshal Binskin: There is a lot of factors that go into the disposal of the properties. It takes time. 

It takes work with the community. Obviously it takes work across the political side as well. For a lot of these, we 

also need to relocate the forces that may be there in the time period. So it is not something that happens overnight. 

Senator GALLACHER: Clearly, we have been at it since 2012. Is this a decade-long event or is it a 20-year 

event? 

Mr Richardson: It will be more of a decade. For a start, internally you do not have the estate and 

infrastructure people on one side and the ADF on the other. We are integrated. There are ADF people who work 

with Steve. There are civilians who work with the CDF and VCDF. I have yet to experience a situation where out 

of the blue Steve's area says to the ADF, 'Hey, we want to sell a base.' Within government, I think for successive 

governments—this will be no surprise to you—it takes a long time. Governments always, understandably, want to 

consult with local members. You have state governments. You have local authorities. Sometimes as Senator 

Hinch raised this morning, you can have a special interest group that is pursuing a particular property. You really 

need to have patience in this part of Defence. 

Senator GALLACHER: And given some of the issues you have. I will use Point Cook as an example. 

Millions of dollars were spent there remediating. 

Mr Richardson: Sorry? 

Senator GALLACHER: Point Cook. There were several proposals there to try to remediate some of the 

contamination. So you have a double problem. It is not just a matter of getting rid of land. 

Mr Richardson: That is right. 

Senator GALLACHER: You have to remediate it as well. That is probably true. How many of these 17 bases 

would fall into that category? 

Mr Grzeskowiak: Certainly some of them would. There is no doubt about it. Virtually every site that we look 

at for disposal would require some form or other of remediation. Whether Defence did that or it was done by 



industry post the sale would depend on the severity and scale of any contamination. I might just add that I think it 

is worth noting that the 2012 report, which did name a range of bases, was a 25-year look into the future. So some 

of the proposals in there were for base adjustments in the late 2020s and early 2030s. 

Senator GALLACHER: Well, we are where we are historically. I have often wondered why we are on the 

eastern side of Australia and not the west, but history will tell us that. 

Senator Payne: In 1770, Captain Cook took a particular direction. 

CHAIR: There is 1616. 

Senator GALLACHER: I will go to another issue. 

Senator Payne: Before you do that, I will clarify that question you asked before I had to leave. I am sorry I 

had to duck out momentarily. I indicated on 19 October in the last Senate estimates when we discussed this matter 

that I have and am entitled to use a Cabcharge card. You have asked me about that. The Cabcharge card is, as I 

understand it—and I am not au fait necessarily with the terms—is a Fast Card. So I said I had one. I also said at 

the time that the report to which you were making reference at that time was prior to me taking up the role as 

Minister for Defence. It is correct to say that I used that card once on 23 May 2016 for a charge of $19.64. Under 

the MoPS arrangements, though, Senator, when you are a minister in a portfolio and you use the Cabcharge, 

which we are all issued with, that Cabcharge is costed back to the portfolio. That is where that charge of $19.64 

and that single use has come from. 

Senator GALLACHER: Defence said that there is a Fast Card issued to you and Minister Pyne and there is a 

$966 cost. I do not know whether it is— 

Senator Payne: I think the cost of $965.77 is in the table from attachment A, corporate system cash payments 

to Cabcharge Fast Card trip breakdown. It is $965.77 beginning in January 2015 and extending to October 2015 

across six different ministers. So that $965.77 goes across six different ministers. That attachment A, which 

relates to the $965.77, does not, in fact, relate to me at all. 

Senator GALLACHER: I can only go on what I have here. It basically says: 

The Department of Defence has two Fast Cards (Cabcharge on issue). One card is held by the Minister for Defence, Senator 

the Hon. Marise Payne, and one by the Hon. Christopher Pyne. The total expenditure for the 2015-16 financial year for the 

two cards was $966. 

I am not fussed about whether you have a Fast Card or not. 

Senator Payne: No. I understand that. 

Senator GALLACHER: I thought I asked you and you said you were like me—you had a Cabcharge and 

Comcar. 

Senator Payne: I said I had a card which is a Fast Card, and it is billed back to Defence when I use it. That is 

the extent of my understanding. If that is not correct, then I will obviously correct the record. 

Mr Prior: I can confirm that there are available Fast Cards—two Cabcharge cards that are issued to ministers. 

It is the case that when all new members come to the parliament, the Department of Finance issues them with Fast 

Cards as a matter of practice. 

Senator GALLACHER: I thought we were a little unclear about that when we had the discussion earlier. 

Mr Prior: It is the case that when a minister is appointed, the costing goes back to the department. Upon the 

usual practice, upon expiry of a card, the department would then issue the new card to a minister. 

Senator Payne: So if there is a need for any further clarification, I am happy to provide that. 

Senator GALLACHER: You have to move about. I thought we would ask a question— 

Senator Payne: Well, not very far—$19.64. 

Senator GALLACHER: Someone is moving around. I will go to the review of the suicide prevention 

services for Defence Force members. In August, the Prime Minister announced that the National Mental Health 

Commission would undertake a review of suicide and self-harm prevention services available to ADF personnel 

or veterans, with a report back due to government in 2017. So we are now precisely at the end of February 2017. 

Would someone like to give us an update? 

Air Chief Marshal Binskin: Can you repeat that question, please? 

Senator GALLACHER: In August, the Prime Minister announced the National Mental Health Commission 

would undertake a review of suicide and self-harm prevention services available to ADF personnel and veterans 

with a report back to government in February 2017. So we are right at that point. Is there any report about? 



Air Chief Marshal Binskin: We spoke with the commission chair only last week. She briefed us on that. 

While I would not want to speak for her, I think she indicated at that stage that they would be seeking an 

extension to bring all the data together. As you would expect, it is quite a complex topic. They wanted to make 

sure that they approached it properly and with full completeness. 

Senator GALLACHER: I do understand that it was tasked by the Prime Minister and it was last week they 

informed you it was not able to complete by February? 

Air Chief Marshal Binskin: They were discussing at that stage talking to Minister Tehan and Minister Hunt 

about seeking an extension. So other than that, I would not be the appropriate person to talk about what their plans 

are. 

Senator GALLACHER: So in general terms, are you aware of any concerns raised by the commission prior 

to the deadline that they would be unable to meet this February deadline? 

Air Chief Marshal Binskin: Again, I am not the appropriate person to talk to there. They are not within the 

defence portfolio. 

Senator GALLACHER: So would that be a veterans' affairs issue? 

Air Chief Marshal Binskin: It is veterans' affairs and health. 

Air Vice Marshal Smart: The three departments are assisting the National Mental Health Commission to 

have access to data. But the actual report is an independent report. Last week was the first time we heard that they 

were not going to be able to deliver the report at that time. They informed both the ministers of that as well. 

Senator GALLACHER: What date was that? 

Air Vice Marshal Smart: That was last week. I think they informed the ministers last week as well. But, as I 

said, it is an independent inquiry. We are assisting across the three departments. 

Senator GALLACHER: I understand the importance of the inquiry and the breadth of the work they need to 

take up, but who set the timeframe if it was obvious? 

Air Vice Marshal Smart: That was the government. 

Senator GALLACHER: So it only opened for submissions on 2 November and closed on 27 November. Was 

it a bit optimistic that a subject like this could be addressed in such a relatively short timetable? 

Air Chief Marshal Binskin: I think you are asking us questions we are not in a position to be able to answer. 

They are not accountable to us for what they are doing. They are independent. 

Senator GALLACHER: So what input did you have into the inquiry? 

Air Chief Marshal Binskin: We provided input. 

Air Vice Marshal Smart: We provided input. We provided each of the three departments provided personnel 

to assist in gathering the information. We also provided access to some of our personnel to be able to undertake 

focus groups. We also had representatives on the reference group related to the review. We also provided a lot of 

information that was requested in terms of our suicide programs and our other mental health data. 

Senator GALLACHER: When this report eventually is made available, who is it made available to? Is it 

made available to you, Air Vice Marshal? Who does the commission report to? 

Air Chief Marshal Binskin: I am not actually sure exactly who it reports to, but the review and the outcomes 

will be made available to us because that is ultimately what it is there for. We are looking forward to receiving it 

because, being the review that it is and offering areas that we might be doing well and areas that we might be able 

to improve and the input that the commission has taken, I think it will be valuable for us. 

Senator GALLACHER: Will the report be made public? 

Senator Payne: The report, as I understand it, will be presented to the Minister for Veterans Affairs and the 

Minister for Health. That is my understanding. 

Senator GALLACHER: So Defence is a happening and willing participant. You have delegated resources. 

You are not in control of the agenda and the timetable and all that sort of thing. It is just that you are the subject 

matter, I suppose. 

Air Chief Marshal Binskin: It is not stopping us progress our programs in supporting our serving members, 

working with DVA for the veterans. But it will inform where we may need to go into the future. 

Senator GALLACHER: So in the same announcement there was an establishment of the first suicide 

prevention trial site in North Queensland. Do you have any information on that? 



Air Vice Marshal Smart: That was announced at that time. That mainly relates, though, to the Department of 

Health and the Department of Veterans Affairs because it is a civilian suicide prevention trial. It is one of 12 sites 

that I think the Department of Health is looking at this for. But the Townsville site in particular was going to 

focus on veterans. While Defence is talking to both departments and remaining engaged, it is not really a matter 

for Defence. 

Senator GALLACHER: I understand. So you are basically saying go to health and go to veterans' affairs for 

more specific affairs? 

Air Vice Marshal Smart: Correct. 

Senator Payne: That is actually a Department of Health trial process. I think if you are here later this evening, 

and you want to pursue questions with veterans' affairs, then they will help as far as they can. 

Senator GALLACHER: I will quickly jump back to Mr Grzeskowiak. I should have that pronunciation right 

by now. I see him enough times. 

Mr Richardson: We call him Steve G in the department. 

CHAIR: A very wise move, Secretary. 

Senator GALLACHER: Senator Kitching asked a number of pretty straightforward questions about the 

Defence training area expansion. We got a very good, instructive answer about the capability and training 

requirements of the various brigades. The question we have is: was not this public furore, Minister, eminently 

foreseeable? We did know we needed a bigger footprint. Basically, it appeared to be a joust in the media which 

the farmers won. 

Senator Payne: I think there are a number of important things to bear in mind. One of those is that Defence, 

as I think was and is appropriate, took an open and consultative approach to their initial planning. The alternative 

to that is Defence effectively hiding their activity which, in my book, would not be appropriate. That is a view I 

have held right from the very beginning. In the initial planning process for something as significant as the 

expansions of ADF training that we have been talking about, there was obviously engagement with the local 

community in the key areas of Shoalwater Bay and Townsville. I think I have here the number of consultations 

and meetings that the organisation has engaged in with members of the local communities to take on board their 

views and their concerns. They have attended public meetings. They have had one-on-one meetings. They have 

held drop-ins and walk-ins and extensive information sessions. They have worked within the key local relatively 

urban areas in Rockhampton and Townsville and so on. 

The initial planning of an undertaking of this nature is always going to be broad brush by its very nature. What 

we have been able to do in the process as information has been brought back to Defence is to give an assurance to 

the community that there would be no forced sales of land. That was given in early February. We have been able 

to pursue a master planning approach, which means we can work with land that is available from willing sellers. 

That has been an important assurance given to the community. No land has been acquired in any compulsory way. 

Any land that will be acquired for the said expansions will be land that is owned by the Australian government for 

the interests of the ADF. As you said, the Chief of Army has provided a very useful and deep explanation of the 

training requirements. We will continue to work within those local communities and we will also, I might say— 

and this has been particularly welcomed in Central and in North Queensland—ensure that as the investment is 

made in the expanded areas, the infrastructure is created and the training areas are developed, we will use local 

providers, local trades, local businesses, for that work as far as possible. In fact, that is literally determined in the 

MOU itself, which is unusual. That is an undertaking which the government has given and which I have given 

and which Defence has given and one which I certainly intend to see through. 

Senator GALLACHER: Well, we certainly have a chequered history in relation to this. If you go back to 

Cultana. You were not in government then. 

Senator Payne: I was not going to mention the war. 

Senator GALLACHER: We had a similar difficulty transition to what is now going to be hopefully a very 

successful base. So when was the strategy of compulsory land acquisition promoted? Is that part of how you do 

things? Do you work that out first? 

Mr Richardson: There is the Land Acquisition Act, and that is the legal framework within which the 

government operates to acquire land, including from willing sellers. 

Mr Grzeskowiak: That is right. The Land Acquisition Act is the mechanism that the government has always 

used for purchasing land. There are three mechanisms included within that. One is simply buying something that 

is already advertised on the market and just entering into an agreement. The second mechanism is purchasing by 



agreement, where the sale may not be advertised on the market but Defence in this case would be approached by 

somebody saying, 'We're interested in selling.' And the third mechanism under section 41 of the act is what people 

most often associate with compulsory acquisition, which is where the Commonwealth can compulsorily acquire 

land either by agreement. Compulsory acquisition is not by agreement with the seller. Compulsory acquisition is 

without the consent of the seller. 

CHAIR: In the meantime, that concludes the committee's examinations. Minister, CDF, Secretary of the 

Department of Defence, I thank you and your officers for your attendance. The committee will now move to its 

examination of Defence Housing Australia. 

Defence Housing Australia 

[18:07] 

CHAIR: I welcome you back, Minister. I also welcome Ms Jan Mason, managing director, and your officers 

from defence housing. Ms Mason, would you like to make an opening statement? 

Ms Mason: No. Thank you, Senator. 

CHAIR: Excellent. In that case, we will go straight to questions. 

Senator GALLACHER: The perennial question: what is the government's plan for DHA? I go back to the 

Commission of Audit recommendations. Can you give us an update on where we are at at the moment? Do you 

continue to do work as normal, or are we looking at parting company with some of DHA's work? Where does it 

sit at the moment? 

Ms Mason: It is business as usual very much for DHA. 

Senator GALLACHER: Business as usual. Like your houses; you have got a business as usual model. We 

found out in an examination of some expenditure in Tindal that the business as usual model was a lot cheaper than 

the bespoke model. So business as usual is good. So there is no possibility or plan or examination to privatise any 

part of DHA? 

Ms Mason: None whatsoever. 

Senator GALLACHER: And there is no suggestion by the minister for a partial privatisation? 

Ms Mason: None whatsoever. 

Senator GALLACHER: We are going right through on this one. 

Senator Payne: But you have asked them before and I have given you the same answer. 

Senator GALLACHER: Yes. I am trying to hold the line until Senator Chisholm comes because he has a 

question about Toowoomba. What about the development of the estate in Western Australia? Is that progressing? 

Ms Mason: I will ask one of my colleagues to join me. I can introduce the topic. With regard to Seaward 

Village, Mr Dietz and I appeared before the public works committee on 3 February over in Perth. We gave 

evidence about the proposal for the project, which was to implement the government's decision that all of the 

homes in the village should be refurbished. We provided detail about our plans in doing that. Subsequent to the 

hearing, we provided additional information to the committee. At this stage, we await the outcome of the 

committee's deliberations. 

Senator GALLACHER: I missed that hearing, but I am sure that it will come up next sitting fortnight. I do 

not have any other questions for DHA. 

Senator MOORE: I have a follow-up question on that. Ms Mason, has that particular area been refurbished 

before, or is this the first refurbishment to the whole area? 

Ms Mason: This will be the first refurbishment of the whole area. There have been repairs and maintenance 

work done in the village. There are individual homes that have been refurbished to a certain extent. Of course, 

they are now quite ageing. Perhaps my colleague Mr Dietz can give you some additional details. 

Mr Dietz: Ms Mason was correct. We have done a small amount of refurbishment to individual houses. 

Senator MOORE: As required? 

Mr Dietz: As required, correct, yes. 

Senator MOORE: In terms of the establishment of that particular lot of properties, when were they actually 

constructed? 

Mr Dietz: There was a range. From the early 1990s predominantly. 

Senator MOORE: So they are relatively new buildings from the early 1990s. In terms of your stock— 



Senator Payne: They are getting towards 30 years old. 

Senator MOORE: In terms of your stock, Mr Dietz, what is the age variation? What would be the oldest 

stock that you have? 

Mr Dietz: There would be a significant age variation. 

Senator MOORE: Yes. I think there would be, depending on the process. 

Mr Dietz: Yes. And many of the older stock is actually on defence bases owned by Defence. The average age 

of our properties—correct me if I am wrong—is closer to nine years. 

Senator MOORE: Nine years. I am surprised. I thought it would be older than that. That means that this 

particular Western Australian property lot is one of the older groups? 

Mr Dietz: Correct. 

Ms Mason: I might also observe that the homes in Seaward Village are situated in an area that is based on 

sand and is in a harsh climate where there are very strong winds. Probably in terms of their ageing process, they 

have aged less gracefully than some other properties in the portfolio. 

Senator MOORE: They have had a tough life, Ms Mason? 

Ms Mason: Yes. 

CHAIR: Ms Mason, what you refer to as sand is good quality Western Australian soil. 

Ms Mason: Well drained soil. 

Senator GALLACHER: Can you give us an update on the DHA board. 

Ms Mason: Certainly. We are pleased to say that we now have a full complement of directors on the board, 

with some recent appointments. We have discussed that at previous hearings. All the positions on the board are 

now filled. 

Senator GALLACHER: I can check from the website. Who are they? Have we got Mr Ewen Jones? 

Ms Mason: Yes. Mr Ewen Jones. 

Senator GALLACHER: He was up in Townsville, was he not? He was the member for Herbert. 

Ms Mason: Yes. 

Senator GALLACHER: He was appointed in 2016. Ms Galloway? 

Ms Mason: Andrea Galloway, indeed. 

Senator GALLACHER: Robert Fisher. 

Ms Mason: Do you want us to run you through them? 

Senator GALLACHER: Yes. I just want to make sure I have the right information. 

Senator Payne: Some of these are nominees. The secretary of Defence has a nominee, Mr Martin Brady AO. 

The Chief of the Defence Force has a nominee, Vicki McConachie. The secretary of finance has a nominee, 

Janice Williams. The managing director herself is a member. We have four commercial directors—Alan 

Ferguson, Robert Fisher, Andrea Galloway and Ewen Jones. 

Senator GALLACHER: So this website is up to date. So there are no changes. Mr Macdonald is still the 

chair, is he? 

Senator Payne: Yes. Sorry, I left him out. Indeed. 

Senator GALLACHER: I have no further questions of DHA. 

CHAIR: I have only the one, or a couple. Measures that DHA takes to ensure local content in any of its 

construction projects and upgrades, please. Can you take us through that? 

Ms Mason: Certainly. I will refer this question to Mr Dietz, who is head of our construction area within the 

organisation. 

Mr Dietz: It is beneficial for DHA, if we can use builders that are local to the area. They usually have very 

good relationships with the local contractors. When we look to tender the building contracts that we put out, we 

do look to package them in sizes of a roughly 20 houses. We have found that that is actually an efficient group of 

housing to be able to contract for. It ensures that mixes of builder sizes can actually tender on those houses. 

CHAIR: Thank you. In terms of property upgrades, can you tell me whether there are any or many, or take it 

on notice, actual members of the ADF who put their own personal dwellings into the DHA portfolio for 



subsequent rental out et cetera? Is DHA an attractive location for ADF members to actually place their property or 

properties if they own them for DHA to manage them? 

Ms Mason: I hesitate slightly in terms of the amount of information we have. Certainly we consider DHA to 

be an appealing investment. In terms of us leasing existing properties from ADF members, the Department of 

Defence has quite stringent requirements in terms of the features of a home that would be suitable for a service 

residence. We do consider direct leasing in certain circumstances provided that the property meets the 

specifications of the Department of Defence, which are, as I said, quite strict—an ensuite bathroom, 33 lineal 

metres of clothesline, laundry tubs of a particular size. So provided the property meets those criteria, then we may 

consider leasing it. We also need to have covered outdoor entertaining areas. But I am aware of a number of 

Defence members who have purchased properties that we have constructed and they purchase them through our 

sale and leaseback program and then we lease those properties back from them for can be periods of 12 to 15 or 

sometimes we extend to 18 years for those leases. 

CHAIR: Does DHA have excess capacity at the moment or ever in the sense that you have more properties 

than are required by Defence personnel, in which case you would be putting them out on the open rental market? 

Ms Mason: We try for as close as possible match between the requirements of the Department of Defence and 

the housing that we provide. But at any moment in time we do have vacancies because there is an ebb and flow of 

Defence members moving between locations. So we aim to meet about 90 per cent of the defence housing 

requirements. The additional provisioning comes from private sector rental. In certain locations, we will have 

vacancies while we are waiting for those services residences to be occupied by incoming members to that 

location. 

CHAIR: I have good news. The good news is that that completes our interrogation. I do not have good news. 

Senator MOORE: Senator Chisholm has not been able to come. I want to see whether there is an update on 

anything that is happening in the Toowoomba area on accommodation for DHA or for structures in DHA? 

Senator Payne: There is a proposal that we can update you on, yes. 

Ms Mason: I think you are probably referring to a proposed development at Mount Lofty. We have a parcel of 

land that we acquired from the Department of Defence. We do have plans to develop a portion of that site for 

providing homes to Defence members but also some of the lots will be sold to members of the public who are 

interested in living at that location. We are at a very early stage of that development. Typically, if we acquire 

land, we go through thinking about how it might best be developed. We consult with the community. 

Senator MOORE: This is undeveloped land completely, Ms Mason. There is nothing on the land you have 

just brought? 

Ms Mason: That is right. 

Senator Payne: It was Defence land. 

Ms Mason: The typography of it is such that there are wooded areas that are unlikely to be suitable for a 

development. So we intend to propose to the council that we develop a portion of the site. But there are large 

tracts of land on the site that we would propose to transfer subsequently to the council and have it retained as part 

of the adjacent Jubilee Park. There are a number of mountain biking groups and bushwalking groups that are 

interested in using that land for those purposes. So a portion of it we will develop. We are going to go through an 

extensive process of consulting with the local community and making sure that we take account of their views as 

we develop our plans. So what we intend to do is submit some plans to council after technical reports and 

community consultation towards the end of this calendar year. One of the issues that has already arisen for us is 

that there is a significant tree that was planted on the land that the community is concerned about. We certainly 

intend to protect that tree in any development that we might do on the site. But Mr Dietz may have additional 

comments that he could make. 

Mr Dietz: I think that is a great summary. Thanks, Jan. The real key message is that we are just at the very 

beginning of this development and just starting our messaging and communication out to the community. Right 

now is the time for the community to get involved and give us the input that we require to get the right master 

planning. We will come up with a concept plan probably about April or May. We will then mature that through 

into a draft master plan about August. As Ms Mason said, we will then mature a final master plan that can be 

taken to council early next year. So now is the time for the community to chat with us. 

Senator MOORE: So this is a standard place you have in your organisation? It is following a stepped process 

that is well known? 

Mr Dietz: Absolutely. 



Senator MOORE: So what consultation model or thoughts have you given to how the consultation will 

operate? Will it be through DHA or through the council? 

Mr Dietz: I will take you through our process at the moment. It will be through DHA and the team that we 

have put together to deliver this project. Some of the things—and, as I said, now is the very first stage, so we are 

going through promoting the fact that now is the time to communicate. 

Senator MOORE: And you are doing that to the local community? 

Mr Dietz: Yes. In doing that, we have delivered 858 personal letters to neighbours who reside or own 

property in the region. We have had face-to-face meetings with 20 local stakeholders. 

Senator MOORE: So that is individually or in groups? 

Mr Dietz: Individually. 

Senator MOORE: So these are people who have responded to the letters? 

Mr Dietz: In some cases they have responded to the letters, yes. But we also have a website up which 

provides information. It also allows people to— 

Senator MOORE: They have responded to a letter or the website, depending on their technological nous. The 

20 with whom you have spoken have made approaches that they wanted to have a talk? 

Mr Dietz: Exactly right. As I said, we have launched a website. We have updated that website a number of 

times, in some cases to ensure some misinformation in the marketplace was corrected and to keep the community 

updated. We have had 107 registrations opting in to have the engagement program via that channel. So that is 

actually people who, I have said, were happy to become part of a group of people who will get our 

communication right up through the master planning process. 

Senator MOORE: This is on top of or part of that 850 letters? 

Mr Dietz: As a result of the 858 letters asking people to get involved, we have now had 107 who are 

essentially opting in to that discussion. 

Senator MOORE: So the next round of engagement? These people want to have a more active role? 

Mr Dietz: I will again say it is the very beginning. We have only been out there for a month or so, so I would 

hope that that increases. 

Senator GALLACHER: What is the process for appointing directors? Is that a decision of the board? Do 

they call for expressions of interest? Is there a GBE process? 

Ms Mason: It is quite a complex process. As the minister mentioned earlier, the DHA Act does have some 

special provisions in it for nominees. There is a nominee of the chief of the Defence force, a nominee of the 

secretary of Defence and a nominee of the secretary of finance as the other shareholder minister represented by 

the secretary of that department. There are four commercial directors. The managing director is via the act a 

member of the board. So the government thinks about these things and makes appointments. There are a number 

of factors that come into play. Once we are advised of the government's decisions, we go through an induction 

process to assist new directors to understand the company quickly and make their contributions as part of the 

board discussions. 

Senator GALLACHER: How do they get appointed, those that are not stakeholder representatives? 

Ms Mason: By the government. 

Senator GALLACHER: So it is a GBE. 

Senator Payne: Through the cabinet process. 

Senator GALLACHER: Is an expression of interest called? 

Senator Payne: Through the cabinet process. 

Senator GALLACHER: You do not have— 

Senator Payne: It is confirmed by the cabinet. 

Senator GALLACHER: Is there a secret list or is there a public list of people that you would like to be on the 

board? How do people get on the board as a non-stakeholder director? Let us not be shy about it. Ewen is a good 

bloke. How did he get on the board? 

Senator Payne: In fact, Mr Jones addresses the requirement as a commercial member. For example, you can 

be appointed as a commercial member if you have expertise in one or more of these fields—housing operations, 



property development or management, business management, real estate management, finance, building or 

construction management and social planning. 

Senator GALLACHER: Is it by invitation? 

Senator Payne: The government makes board appointments the way we make many board appointments. 

Senator GALLACHER: So you invite people to put their name forward? 

Senator Payne: You consider people who might be appropriately qualified and put those through the cabinet 

process if they are determined to be appropriately qualified. He had extensive experience in both real estate and 

finance before entering the parliament, having represented what I understand to be known in Queensland as the 

garrison city of Townsville, he certainly has the defence life experience, if you like, of having been that 

representative. 

Senator GALLACHER: I am just curious. Having been appointed to a government board, I was basically 

invited to put a nomination in. Is that what happens here? 

Senator Payne: It is a similar sort of approach. 

Senator GALLACHER: Thank you for that. Senator Carr has just asked me if you would indulge him in 

answering a question about whether you have had a chance to speak to Senator Pyne about Mr Walker? 

Senator Payne: Yes. I did not speak to him directly, but our office has communicated. The minister indicated 

that he did provide a reference for Mr Walker as he would for any valued former member of staff. 

Senator GALLACHER: Excellent. They are all the questions I have. 

Senator MOORE: Mr Dietz, I am going to check the website about the Toowoomba project. If we have any 

questions, we will come back to you on it. We are very much in this early stage. I just want to put that on the 

record. Thank you. 

CHAIR: Thanks, Senator Moore. That then, Ms Mason, does conclude the committee's examination of 

defence housing. I thank you and your officers for attending. We will resume at 7.30 pm with an examination of 

the veterans' affairs portfolio commencing with the Australian War Memorial. We are suspended until 7.30 pm. 

Proceedings suspended from 6.25 to 7.30 pm 

Australian War Memorial 

CHAIR: Good evening. The committee will conduct its examination of the Veterans' Affairs portfolio in the 

following order: amazingly enough, the Australian War Memorial followed by the Department of Veterans' 

Affairs. I welcome back Senator the Hon. Marise Payne. representing the Minister for Veterans' Affairs; Dr 

Brendan Nelson, Director of the Australian War Memorial; and officers from the Australian War Memorial. I will 

come to you and your staff in a few moments, Mr Lewis. Minister, would you like to make an opening statement? 

Senator Payne: No, Senator. Thank you. 

CHAIR: Dr Nelson, would you like to make an opening statement? 

Dr Nelson: Only to wish the minister well and to thank the committee for its forbearance in permitting us to 

go first. I know the secretary of the department would not be disappointed if we spend three hours on the War 

Memorial! 

Senator HINCH: My question is to Dr Nelson, Director of the War Memorial. I want to start—it may sound 

strange—by quoting Weary Dunlop to you: 'Get men working at arts and crafts at the hospital thereby helping 

them acquire an interest in life.' I quote Weary Dunlop because I want to talk to you about ANVAM. I know you 

are aware of ANVAM, the Australian National Veteran Arts Museum, whose site we are trying to acquire on St 

Kilda Road in Melbourne. It is a part of the Victoria Barracks footprint and it is opposite the Shrine of 

Remembrance. It has been vacant for 20 years. The Defence department have decided, suddenly, that they want to 

sell it now and they want to sell it this year. My question to you is: have you been approached by them? Have you 

got some involvement with them? What is your reaction to them? 

Dr Nelson: Firstly, I do not recall being approached by them, but I am certainly aware of and supportive of 

general movements which encourage veterans to be engaged in art not only as a way of expressing themselves but 

also for coming to terms with the impact on them of what they have done for us. 

Senator HINCH: We have got veterans with post-traumatic stress disorder; we have seen the shocking rate of 

suicides among vets. With the War Memorial, as I understand it, some of those vets actually use your museum as 

therapy, don't they? 



Dr Nelson: Thank you, Senator. I am 58 years old and I learn something every day. In the last four years I 

have had the privilege of being the Director of the Australian War Memorial. Among the many things I have 

learnt is that this institution is a part of what I call a therapeutic milieu for men and women coming back to a 

country that has no idea of what they have been doing. Historically, the memorial, founded in the vision of 

Charles Bean and the depths of the bloody fighting at Pozieres in 1916, has engaged art not only as a way of 

telling Australians and giving them some insight into an understanding of the Australian experience of war but 

also as a form of very powerful expression. You quoted Weary Dunlop. Amongst the 38,000 artworks which we 

have got are a significant number which have been done by Australian servicemen and servicewomen under some 

of the most trying conditions. Whilst it is entirely a matter for the Department of Defence what it does with this 

particular property, I can only say, in a general sense, that encouraging veterans to be active participants in art— 

whether it is creating art, displaying art or choosing artworks to display which reflect some of their own 

experiences and emotions—is a positive thing. I would think its proximity to the Shrine of Remembrance would 

be a very powerful thing in a positive way. 

One of our official war artists whom we commissioned is Ben Quilty, the Archibald Prize winner. We sent him 

to Afghanistan in 2011. He produced over 20 works depicting the impact of the war on the men and women who 

had participated in it. So powerful was that that I asked him back and gave him another commission. We have 

three of his artworks hanging in the War Memorial at the moment—one of a daughter of an SAS sergeant killed 

in Afghanistan, one of a widow of a commando killed in Afghanistan and the other of a woman living with a 

partner and five kids, the partner having severe PTSD. People weep openly in front of the paintings. 

I tried unsuccessfully to offer them to the parliament, by the way, when they are finished at the War Memorial, 

given that it is you who decide whether these men and women are going to go and do these things. I was told that 

apparently there is no room. When I walk around the place—I know I am digressing—I see a lot of interesting 

artworks, but why on earth this country is incapable of hanging these artworks in this building somewhere is 

beyond me. 

Senator HINCH: You can have my office. 

Dr Nelson: Thank you. 

Senator Payne: Perhaps mine as well. That is something I can take up with the Speaker and the President. 

Dr Nelson: I have done so—unsuccessfully. All I can say is that Mr Ben Quilty, who I have got to know 

reasonably well now, has a small legion of veterans who to varying degrees are suffering as a consequence of 

what they have done for us who he has been teaching to paint. It is at its own cost, of course. He runs classes and 

does all sorts of things for people, mainly men and some women. 

I think the objective that you are pursuing—and which I presume others are pursuing—is clearly a worthy one. 

Whether the government and the defence department are in a position to make that building available and the 

questions about the restoration of it and who might then fund its maintenance are entirely matters for others. 

Senator HINCH: The idea would be to have veterans there as artists in residence. You could try to maybe 

have an exchange with some of your artists at the War Memorial. The other thing is that you must have a lot of 

artwork hidden away in your basement you would like to put on display somewhere else at some stage. 

Dr Nelson: As I said, we have close to 38,000 artworks. We display as many as we are able to. I have worked 

very hard to get them out. In fact, any senators here are welcome to have any of our artworks displayed in their 

offices. We would like them back, of course! If the security was appropriate and the environmental atmosphere 

was appropriate for the display of our artworks, of course we would lend them to such an institution. 

Senator HINCH: There is insurance and stuff like that. It is like when something like the Versailles 

exhibition comes to Canberra—you would have to have those sorts of protections. 

Dr Nelson: Of course. I can only say to you I have seen too much in my various roles to not think that this is a 

positive thing. I have also seen enough in my current role to note that this is an extraordinarily positive, 

therapeutic activity. 

Senator HINCH: I will be coming and knocking at your door. The last military veteran Australian Prime 

Minister once said: 

Of all the objectives of my government, none had a higher priority than the encouragement of the arts—the preservation and 

enrichment of our cultural and intellectual heritage. 

That is what I want to do with this building which was built in 1937 to repatriate veterans of World War One. If 

we can put all this together, it would be the most amazing thing coming up to the centenary. 



Senator GALLACHER: Welcome, Dr Nelson. Given your encyclopaedic knowledge of the War Memorial, 

can you give us a refresher on the stats from your last annual report. While you are touching on that, can you 

address the query that people from Honest History have made in respect of an allegation of misrepresentation. 

You start from a point of 1.3 million visitors. Let's see if we can flesh that out in the discourse. 

Dr Nelson: Thank you very much. I will ask Ms Anne Bennie, who is the assistant director responsible for our 

public programs, to answer that for you. 

Ms Bennie: We are aware of some of the claims of Honest History, and we are certainly aware of what went 

into the Memorial's annual report. What is correctly reflected, and what we know the figures say, is that the 

Memorial's total visitation to our site has had a decrease, and that is what Honest History are picking up on. I 

think another point that they made was that, in fact— 

Senator GALLACHER: Do not be shy about putting the 1.232 visitors that we had. 

Ms Bennie: Sure. That is right. There is a number of counts that go into our total visitation. If I talk about the 

figure that is actually our total visitation to the War Memorial, excluding exhibitions that we have on the road 

touring or travelling, for the 2015-16 financial year that is 1.087 million. That is slightly down on 1.142 from the 

previous financial year of 2014-15. The claim that Honest History are making is that the Memorial is claiming an 

increase in visitation through the front gates but, in fact, there is a decrease. But we know that, in fact, through the 

front gates or up the front stairs of the Memorial from one financial year to the most recent report, we have had an 

increase of 6.7 per cent. You can do your math. 

Senator GALLACHER: But your headline figure is that with visitors to the Memorial, the storage facility in 

Mitchell and its touring exhibitions, you have reached 1.23 million Australians. 

Ms Bennie: That is right. 

Senator GALLACHER: And visitors strictly to the Memorial is 1.08 million? 

Ms Bennie: That is right. 

Senator GALLACHER: So some Honest History students have—what have they actually done? They have 

picked up that you have— 

Ms Bennie: The description against the figures in our annual reports is absolutely correct. What they are doing 

is assuming that it is apples with apples, if you like. We have had a different reporting of the figure, but it is still 

our total visitation figure. Again, numbers through our front gates is certainly the figure that the chairman refers 

to in his summary as being an increase in visitation—both domestic and international visitors to the Australian 

War Memorial. 

Senator GALLACHER: So is it fair to say that the War Memorial is still a significant tourist asset to 

Canberra? 

Ms Bennie: Yes. You might expect that Anzac Day 2015 drove some very large visitation to the War 

Memorial, as did the opening of our stunning new First World War galleries, but I think it is testament to visitors' 

interests in and understanding of our military history that the numbers of our people walking up through our front 

gates to our galleries in 2015-16 showed an increase of almost seven per cent. 

Senator GALLACHER: How do you estimate a media coverage of 33.71 million during the Anzac Day 

Period? 

Ms Bennie: It is based on exposure. You are looking at measures of media reach, if you like, then they put a 

value on that reach. It is, I suppose, a common formula in which the number of mentions in media then have an 

equivalent value as to the reach of that audience—I suppose it is more from an advertising aspect, if it were to be 

valued in that way. 

Senator GALLACHER: And the introduction of The Last Post ceremony has been very successful. 

Ms Bennie: They have been very successful. Certainly, one of the biggest increases over the last quarter, if 

you like, has been the reach not only of on site visitors to the War Memorial, but also the reach that we are 

achieving by broadcasting that service live through Facebook every day. Our reach with some ceremonies—and I 

say 'reach', which means our message is getting out to people that that ceremony is on—is about 150,000 people. 

That is obviously many more than can physically attend the ceremony in the commemorative area at the 

Memorial. 

Senator GALLACHER: Do you actually quantify the value? It is obviously of inestimable value to the 

Australian community but, in pure fiscal terms, what does it mean to the Canberra economy to get this amount of 

visitors? 



Ms Bennie: I would probably have to leave that for VisitCanberra and the ACT government. They do not 

release those sorts of figures in detail to the War Memorial but we do know that, through the 2015 period, there 

was a directly attributable increase of, I think, a number of nights spent, and therefore the value spent, in the ACT 

economy as a result of the Australian War Memorial and its activities, and certainly the opening of our First 

World War galleries. 

Senator GALLACHER: I had a constituent say to me last week they were planning a visit to Canberra, and I 

mistakenly thought they were interested in the parliament. But they said no, they have got to spend some time at 

the War Memorial and that sort of thing. 

CHAIR: Thank you, Dr Nelson. On the Spirit of Anzac Centenary Experience, can you give us an update 

including, if on notice, the number of visitors who have been through in the different locations? 

Dr Nelson: If I could just to add to the answer about visitor numbers, we had 562,000 and 618,000 for the 

September and December quarters respectively for this financial year. That is an increase of three per cent. That is 

through the front gates. Our school students are up one per cent. What actually distorted the figures—Honest 

History is actually one person, by the way—was the enormous attendance to the site for Anzac Day 2015. We had 

128,500 at the dawn service. Last year, there were 55,000. It is still growing, of course. The Spirit of Anzac 

Centenary Experience has now attracted just on the 300,000 visitors. We are very pleased with the way it has 

gone. 

CHAIR: If you could on notice just give us an indication, if you know, of those numbers at each of the 

locations. Also too, staying with spirit of Anzac, I am just interested to know what the local community feedback 

has been as a result of the exhibition travelling. 

Dr Nelson: We will certainly provide a breakdown on the visitors to each site. Some exceeded expectations 

and someone were a little soft—Kalgoorlie, for example. The local community reaction has been overwhelmingly 

positive. In fact, we are very shortly about to go to Newcastle. Clarence Jeffries's Victoria Cross is actually going 

to leave the cathedral up there and come into the Spirit of Anzac Centenary Exhibition, which reflects generosity 

on the part of the wardens of the church. Major General Brian Dawson has been overseeing it on our behalf. I will 

get him to add further to this. 

Major Gen. Dawson: We have just closed in Geelong on Monday. We have got three more locations to go: 

Orange and Newcastle, as a director said, and then we will finish in Sydney at the Sydney International 

Convention Centre at Darling Harbour over the dates 15 to 27 April. In each location, we have assisted in curating 

a community exhibition which is generally at the end of the main exhibition and really draws on stories from the 

local community and region. We have been given a fair bit of latitude, if you like, for those stories to bubble up 

from the local community. We have also found, from the 200-odd artefacts from the War Memorial's collection 

that have been on tour, a number of local linkages and relatives who had not seen those objects for many, many 

years. 

CHAIR: Now, you will be disappointed if I do not ask you for any comment on the War Memorial's 

association with the National Anzac Centre down at Albany. You are continuing to support that centre? 

Dr Nelson: We are supporting them on the beaches, we are supporting them in the view from Albany and we 

are supporting them in everywhere we can. Yes, of course we do. I think the Albany centre has exceeded 

everybody's expectations and, in terms of visitor numbers, we have got quite a few artefacts and relics that we 

have on loan there. We provided images, curatorial and other support, and we continue to do so. 

CHAIR: If I can just go do some aspects associated with funding: what, if any, measures have you put in 

place to maintain your current standard of service available to the public visiting the War Memorial? 

Dr Nelson: We are very appreciative of both sides of politics over the years for the strong support they have 

provided to the Australian War Memorial. Our appropriation in recent years has been essentially static in the 

current environment and we have significantly improved efficiencies. I think it is fair to say that our productivity 

has improved substantially over the last 3 to 4 years. We have been working very hard on our non-government 

funding and at the moment we are drawing about $5 million a year out of our partnerships, commercial activities, 

bequests and a range of other non-government funding sources. That enables us to provide the difference between 

something that is excellent and something that is absolutely stunning. 

We also were able to successfully receive some money from the public sector modernisation fund to allow us 

to meet increasing demands that are upon us. Senator Gallacher asked about visitors, but of course what is often 

not appreciated is all of the demands that we have upon us that come by telephone, email and other forms of 

communication. That is people wanting information about their family history. They want images, photographs, 

film, support and advice. There is a whole variety of demands which actually stand behind the headline figures. I 



think we are in a solid position at the moment. I might add that our chairman, Mr Kerry Stokes AC, continues to 

be a very solid and generous benefactor of the War Memorial. 

CHAIR: Before I go to Senator Fawcett, the presence of the Israeli Prime Minister in Sydney last week 

reminded me of the events at Beersheba on 31 October. I wonder to what extent the War Memorial is involved in 

that commemoratives process. 

Dr Nelson: The Department of Veterans' Affairs is overseeing a major event which will commemorate 

Beersheba in October. 

CHAIR: We will perhaps leave that to further discussion with— 

Dr Nelson: We are providing some material for the interpretive centre that is being constructed there and we 

will also provide a commemorative service for Beersheba at the War Memorial at our last post. We will also bring 

for public display objects that we have to complement what is already in our First World War galleries. 

CHAIR: I will put you on notice as well. That, of course, is the events leading up to commemorating the end 

of the First World War in 2018. 

Senator FAWCETT: You have stolen my thunder around Beersheba, but that is good to hear. I am glad there 

will also be something here, because obviously there are many people who will not be able to make it over to 

Israel for that particular commemoration. I will start off by saying, since the last estimates when we spoke, I have 

heard many comments by both domestic and international visitors to Canberra who have said that the War 

Memorial is one of their highlights. Those who could not attend the last post ceremony have said that they heard 

about it and one of their regrets of visiting Canberra was not actually attending the ceremony. 

I will just commend you and your staff for not only the initiatives you have put in place but clearly the ongoing 

work to maintain the high standard that really engages people, even those who do not have a history as an 

Australian. The international visitors were equally positive about it. It is a real credit to you and your staff what 

you are doing for Australia. Thank you. To go to the issue of funding, just going back to the portfolio budget 

statement. Table 45 talks about grants. I noted that there was an estimated 2015-16 grant for $2.727 million, but 

the total grant approved was $8.181 million. I am just wondering if you could give us some detail as to what that 

was for and how that has been utilised? 

Dr Nelson: I will ask my chief financial officer to answer the question. 

Ms Patterson: Unfortunately, I do not have the PBS right in front of me, but from the memory I believe that 

the $2.7 grant you are referring to is transfer for the Spirit of Anzac Centenary Experience. Alternatively, it could 

be for the official history of Iraq and Afghanistan. 

Senator FAWCETT: Feel free to take it on notice. 

Ms Patterson: Thank you, I will. 

Senator FAWCETT: It is just that there is no explanatory note in the table. I was just interested as to what 

that amount was for. The estimate for 2016-17 is that it is $2.7 again, so it looks as though that is a consistent 

grant; but there was obviously a spike in that last period. It is page 102. 

Ms Patterson: I am sorry, I do not see that figure on the document. 

Senator FAWCETT: Section 3.12, grants. Table 45, approved grants. It is about halfway down the table. 

Ms Patterson: Is this the 2016-17 portfolio budget statements? 

Senator FAWCETT: Let me just check that I am not looking at the additional ones. 

CHAIR: The problem with modern electronics, as you and I found in the national centre in Albany on the day 

it opened. Neither one of us could make the technology work, as I remember. 

Dr Nelson: I would be pretty confident that it is one of two things. It is either the official histories— 

Ms Patterson: I found it. 

Senator FAWCETT: You found it? 

Ms Patterson: Yes, this confirms it is for the Spirit of Anzac Centenary Experience. My apologies for the 

confusion. 

Senator FAWCETT: That is all right. I had not even yet scrolled back to the top of the document. So that 

was just general funding to enable the tour that has gone around Australia, a specific purpose grant for that? 

Ms Patterson: Yes, the government provided an original $10 million in funding and, over the years, as the 

project progressed, we reallocated funding in the year that the money would be spent. That came through in the 

portfolio budget statements. 



CHAIR: Thank you very much. That does conclude the committee's examination of the Australian War 

Memorial. I thank you, Dr Nelson, and officers of the War Memorial for your attendance. The committee will 

now move to its examination of the Department of Veterans' Affairs. 

Department of Veterans' Affairs 

[19:55] 

CHAIR: I welcome Mr Simon Lewis, the secretary, and officers of the department. Mr Lewis, do you wish to 

make an opening statement? 

Mr Lewis: There is no opening statement today. 

CHAIR: In which case, we will go straight to the questions. 

Senator GALLACHER: Can I just go back to some questions I asked of Defence in relation to the National 

Mental Health Commission's review of suicide intervention services for Defence Force members and veterans. 

Just to recap, the Prime Minister made a decision or an announcement in August that the national Mental Health 

Commission would undertake a review of suicide and self-harm prevention services available to ADF personnel 

and veterans with a report due back to government in February 2017. We now stand at 28 February 2017. 

CHAIR: It is 1 March. 

Senator GALLACHER: We passed it! Yesterday was 28 February. How are we looking? Can you give us a 

broadbrush description on what has happened? 

Mr Lewis: I understand that last week the National Mental Health Commission had some meetings in 

Canberra at which they requested an extension, which was granted. I believe they put out a short notice on their 

website to advise that they had sought and been granted an extension of time—four weeks—for the delivery of 

that report. I think it is now— 

Senator GALLACHER: That is an additional month, is it? 

Mr Lewis: I think it is just short of that. I think it is now to be presented to government by 28 March. 

Senator GALLACHER: Were you aware of any concerns being raised prior to the deadline that we would be 

unable to meet this February deadline? 

Mr Lewis: I do not think we were. There is a lot involved in a study of this kind. To some extent, it depends 

on what emerges through the course of the inquiry itself and the period of time they need to finalise their report. 

Obviously, it has been commissioned by ministers and we are assisting with the review, as are Defence and 

Health. But it is being done independently by the commission. 

Senator GALLACHER: The Prime Minister has announced that a review would take place. We know from 

Defence's evidence that the services provided input, focus groups and resources. What did your organisation 

provide? 

Mr Lewis: I will turn to Ms Campion to assist with that. 

Ms Campion: We have worked closely with the commission and with those other agencies—Health and 

Defence—to support the review. Each of the three departments provided one full-time officer to work with the 

commission to help them link back into the departments and to provide information and other sorts of resources 

that they required. At a more senior level, we have also worked very closely, meeting regularly with the 

commission. Obviously, we respect their independence, but we were doing what we could to help them given that 

it was a reasonably short period of time to do the review. We did what we could to give them as much assistance 

as we could. 

Senator GALLACHER: How many staff did you provide? 

Ms Campion: We each provided one. Health, Defence and DVA each provided one person, taking one person 

offline. 

Senator GALLACHER: One person each? 

Ms Campion: Yes. 

Senator GALLACHER: They were a liaison between the National Mental Health Commission and each 

respective department? 

Ms Campion: Yes, that is right. 

Senator GALLACHER: Were those people constrained by the short duration of the time frame? 

Ms Campion: No, not to my knowledge. 



Senator GALLACHER: Were they able to get all of the work they needed to do done in that time frame? 

Ms Campion: Yes, absolutely. 

Senator GALLACHER: So what is the reason for the delay? Is it the compilation of the report or the 

evidence? 

Ms Campion: I think that would be a question for the commission. The people we took offline to support the 

commission completed that work towards the end of last calendar year, so they have come back to the respective 

departments and the commission is now doing the detailed analysis of all the information that they received as 

part of their research. 

Senator GALLACHER: Is your department aware of any groups who approached the commission? Did they 

come through you to go to the commission? 

Ms Campion: No. The commission approached the groups directly, and they had a reference group to support 

them and consult with as well. 

Senator GALLACHER: To the best of our department's knowledge, all the groups found their way to the 

right area to make their submission? No-one came to you and said, 'We don't know where to go'? 

Ms Campion: No, not to my knowledge. 

Senator GALLACHER: Do you have any idea how much this review has cost? Who costed it? 

Ms Campion: The commission is meeting all of the payments to date. We will split the cost between the 

respective agencies who have been involved in the review. That will be DVA, Defence and Health. But we have 

not yet received a final invoice from the commission and worked out the respective proportion between the 

agencies. 

Senator GALLACHER: Excuse my ignorance, but it is paid for by Health. 

Ms Campion: It will be paid for by Defence, DVA— 

Senator GALLACHER: No, but then the bill will be apportioned out to you. 

Ms Campion: The invoice will come to DVA, and DVA will work with Health and Defence to work out the 

respective proportions for each of those agencies. 

Senator GALLACHER: So you do not actually know what the figure is going to be? 

Ms Campion: Not at this stage. We do not have a final yet. 

Senator GALLACHER: So you will be presented with a proportion of it. Is that fifty-fifty, thirty-three-thirtythree 

or what? 

Ms Campion: As I said, we still have not quite finished that part of the process. 

Senator GALLACHER: But we are not aware of how much it actually costs at this stage. 

Ms Campion: As I said, we do not have a final amount yet, no. We will not until the work is completed. 

Senator GALLACHER: Is the new deadline anticipated to be a fixed and firm deadline? All your work is 

completed? 

Mr Lewis: We would assume so. We are actually quite keen to see the results of this work. It is useful to 

inform not just the parliament but also the work of the various departments. 

Senator GALLACHER: How many veterans do you think were engaged in the program? Do you have any 

idea? 

Ms Campion: No. Certainly the commission would, but we do not have that information. 

Senator GALLACHER: So no-one came through you. 

Ms Campion: No. 

Senator GALLACHER: How was it advertised? 

Ms Campion: The various aspects of the review? There was a survey that was put online, and the 

commission, from memory— 

Mr Lewis: I would have thought there would have been ads, but we might need to take it on notice to update 

you on that. 

Senator GALLACHER: Okay. 



Ms Campion: The commission did issue a media release in relation to the survey and also invited 

submissions. Then, of course, they also did a range of focus groups and also did some in-depth interviews with 

key experts and others in the area of suicide. 

Senator GALLACHER: We know the Prime Minister would have had some attendant publicity. I am curious 

about whether after that there was a structured advertising program. If you could take that on notice, that would 

be fine. 

The same announcement highlighted the establishment of the first suicide prevention trial site in North 

Queensland. How is this working? What does it look like? 

Senator Payne: As we said in the previous Defence estimates, that is a health initiative. Because of the 

location in Townsville, it does have a significant veterans focus, but the Department of Health actually runs the 

trial site itself. There are 12 across Australia. I can tell you that. Their focus is on innovative and collaborative 

approaches to suicide prevention. In this case, the Northern Queensland Primary Healthcare Network, which is a 

Commonwealth entity which covers the state government health area, will receive funding of up to $1 million per 

year for three years through to June 2019 to manage the trial. 

In December last year, the then health minister, with the Minister for Veterans' Affairs, hosted a roundtable 

discussion in Townsville to help plan and inform the design of the trial site. That roundtable did conclude that 

better coordination and publicity about both government and non-government services available to veterans and 

their families in the Townsville region is needed. There were a number of commitments agreed to as a result of 

that roundtable. They include: a shared commitment between the Australian government, the ex-services 

community and the health service providers to reducing the rates of suicide in the ex-service community; better 

communication about available services to occur; a focus on young former serving men and support services for 

the families of ex-serving personnel; and that the Townsville trial develops a suicide prevention model that can be 

further used to support the veteran community across Australia. A veterans' suicide prevention project steering 

committee was established, consisting of representatives from that Northern Queensland Primary Healthcare 

Network and the ex-services organisations, to commence initial planning and to conduct further consultation 

activities. I understand it is the Department of Health at the Commonwealth level which is working closely with 

that steering committee, as you would expect, to develop the next action items for the trial. 

Senator GALLACHER: I understand that this is the first site of 12. Are you at the stage of knowing where 

the other locations would be? 

Senator Payne: I do not have that detail. It would be Health detail, I should imagine. 

Ms Campion: I think there have been four or five announced to date. The Townsville one was the second. 

There was one in the Kimberley, with a focus on Indigenous suicide. It was announced prior to the Townsville 

one. And I think there have been a few more announced in the last few days. 

Senator GALLACHER: So these are health initiatives in respect to suicide, but some of them are tailored 

specifically towards veterans? 

Mr Lewis: The Townsville one is focused on veterans because Townsville is often described as a garrison 

town. 

Senator Payne: 'City'. 

Senator GALLACHER: I suppose you could add Darwin in there, too. 

Mr Lewis: 'City'—yes, I am corrected on that. I said 'town'; I meant 'city'. 

Senator Payne: The mayor will take you to task. 

Senator GALLACHER: Are there any full-time equivalent positions attached to this funding? Are any 

additional people put into these ventures? 

Ms Campion: That would be a matter for the primary health network. They will get the funding from the 

Department of Health and will determine how they expend those funds to conduct the trial. 

Senator GALLACHER: All right. Thank you very much for that. If I can move to probably one of the most 

pressing issues in the department—the ICT systems upgrades. PwC has been engaged by the Department of 

Finance's Business Advisory Panel. They have come up with $18.7 million to develop a second-pass business 

case. Did you meet the deadline on that? Is that completed and submitted to government? 

Ms Cosson: I will just give you an introduction, if I may. The PwC contract, which I think you may have been 

referencing off our AusTender—I think there was a duplication in its reporting, for one thing. I think the contract 

value is just over $9 million—so not the value you just mentioned. With our second-pass business case, as you 



know, in the budget last year we received some funding to develop that business case to be considered as part of 

our budget process this year. I can report to the committee that we are on track. I am very pleased with the quality 

of that report. PwC was a strategic partner to give us advice in the development of that business case because it 

requires a range of artefacts and it requires us to engage very closely with a number of agencies, but also to look 

at the digital standards that are required to present a large ICT project. At the moment that business case has been 

circulated and, as I mentioned, it is now part of the budget process. It has picked up a range of feedback that, as I 

mentioned— 

Senator GALLACHER: I have a number of questions. Can you clarify what you just said to us then? I am 

talking about Department of Finance business advisory panel from 8 August 2016 until yesterday, 28 February at 

a cost of $18.7 million. Are you saying that is wrong? Is it only $9 million? 

Ms Cosson: I would have to— 

Senator GALLACHER: I think you mentioned a figure of $9 million. 

Ms Cosson: Yes. Through AusTender, which I do have in my folder, we entered into a contract with PwC for 

our second pass business case for them to provide the service as a strategic partner. I think the value of that 

contract was about $9 million. 

Senator GALLACHER: Okay. Can we just clarify that? 

Mr Lewis: We might need to check that. 

Senator GALLACHER: I am looking at a brief that says $18.7 million. So if it is $9 million that is obviously 

a significant difference. From what we understand, the role is to identify and prioritise a range of reform readiness 

initiatives. Can you describe what the recommendations are? 

Ms Cosson: For the business case we have developed we have had a range of workshops and stakeholder 

engagement activities to actually listen to our veterans' experience with us and DVA. This business case is 

looking at how we can simplify and streamline a range of our processes and, importantly, to give our staff the 

tools that they need to support their veterans. At the moment our ICT environment is extremely complex. We 

have separate systems supporting the different acts that we administer and it makes it very difficult for our staff to 

give the support to veterans in a timely fashion. Our veterans and their families have said that they find it very 

complex to navigate the department. The business case has listened and has captured all of that feedback that we 

have received. It is offering a range of recommendations for government consideration in the budget process. 

Senator GALLACHER: That sounds very positive. Were there also savings measures attached to those 

recommendations? 

Ms Cosson: Certainly, the business case over a period of time will realise a range of benefits. They include 

benefits for the veterans' user experience in their contact with DVA, benefits for the veterans in that early 

intervention and early engagement with them so that we reduce the longer-term health costs through delays in 

actually getting their claims and that treatment that they need early and benefits in how we deliver a more 

efficient and effective support arrangement for our veterans. 

Senator GALLACHER: I fully support longer-term benefits for people being healthier and needing less 

assistance. In the environment we are living in at the moment are there any brutal savings measures recommended 

by this advisory panel? Are they saying you are doing things wrong or should be doing things cheaper? 

Ms Cosson: They are certainly saying we could do things more efficiently by streamlining our business 

processes. We have done some considerable work with our staff to understand where we can streamline those, 

remove those inefficiencies and ensure that we are still compliant with our legislation. Those processes will 

realise efficiencies in the longer term. 

Senator GALLACHER: Can you give us an example of an efficiency that has been recommended? 

Ms Cosson: I might ask Ms Pope if she can recall any off the top of her head. 

Ms Pope: We have done a particular piece of work and a project we call the Lighthouse, which is meant to 

show the way we are going to develop in the future. One of the things we have examined there is the initial 

liability process, which currently takes up to about 120 days. It is a paper based application and so on which is the 

process that a veteran needs to go through to establish the causal link between whatever their condition is and 

their service. That is the first step towards making a claim. We have looked at a way to make this available on a 

phone-based app with a much shorter number of questions and including the opportunity to be able to upload your 

doctor's diagnosis for whatever the condition might be. This applies to musculoskeletal injuries, which are some 

of the most common that veterans experience—problems with knees, hips, back, shoulders, neck and that kind of 

thing. We have been testing this with veterans, who found it takes somewhere between 10 and 20 minutes to 



complete an online application to the department. The quickest resolution of one of those applications has been 

within four days, compared to 120 days. That is for a small subset of our cases, because we are testing this, taking 

a sort of wide approach but a fairly thin one, to look at what we think we can improve, and the results for this so 

far have been very positive. 

The other element of this is looking at what we call straight-through processing. By establishing the nature of 

the length of your service and the particular service that you have been engaged in, we can work out that you will 

have qualified for an initial liability without you having to account for how many kilograms you have lifted or 

how many ladders you have climbed, depending on which service you are in. That has a really major streamlining 

impact on a whole range of cases and really reduces the amount of investigation we have to go through in order to 

establish that causal link. 

Senator GALLACHER: Are you able to do a cost-benefit analysis on that the example? 

Ms Pope: We will do. We are just working towards the next trial of that on a wider basis, and that will help us 

to get a better baseline of what we think we will be able to achieve. We do not quite have those results yet, but the 

early indications are very positive. 

Mr Lewis: That is work we are doing with the central agencies, who, of course, are in a sense seeking to 

verify and confirm the business case we are putting forward in order to get support through the current budget 

round. 

Senator GALLACHER: It seems to be an eminently sensible way of doing it. You have got it electronically; 

you can move it around. You can probably still lose it, Mr Lewis— 

Mr Lewis: We will try not to! 

Senator GALLACHER: but you can still claim it back, I think. 

Mr Lewis: If they can do their own business on one of these, we will be in the 21st century. 

Senator GALLACHER: So you will do a cost-benefit analysis, obviously, as you get a bigger dataset. 

Ms Pope: Yes, absolutely. 

Senator GALLACHER: Did the PWC report only make recommendations in relation to ICT or did it have a 

broader scope in other functions? 

Ms Cosson: Certainly, our second-pass business case is looking not just at the ICT. As we know, just 

delivering an ICT solution does not actually realise the broader business benefits. We are particularly looking at 

how we process our claims, how we as an organisation are designed to support the veterans and how we as a 

leadership team fundamentally change our whole frame of thinking from a claims based, paper based organisation 

to one that is putting the veterans at the centre of our business and our thinking. The business case that PWC has 

helped us deliver is covering off on a range of initiatives to improve the business model, including IT. 

Senator GALLACHER: A report has been made available to government. What recommendations from the 

report are you able to disclose? 

Mr Lewis: I do not think we are able to discuss the specific recommendations at this stage. Obviously, once it 

has been through government and government makes a decision, we would be happy to share with you the 

government decision. But, in the meantime, we have given you a pretty good sense of the kinds of issues that are 

coming up in the report. I did want to add: one of the benefits of getting our clients to be able to do a lot of this 

stuff themselves through streamlined processing is that it frees up DVA staff. We will be able to focus on the 

more complex cases—individuals with multiple needs, comorbidity et cetera—so we can provide them more 

tailored support then we have been able to in the past. 

Senator GALLACHER: You have obviously invested a significant amount of funds in this report, and I am 

heartened by the advice you are giving here, but I want to drill right down. Are there substantial savings 

recommended in this report? 

Mr Lewis: It is not about savings; it is actually about a business case to get the government to support what 

will be a very substantial spend. Of course we will want to build that case around a way in which we are going to 

deliver services to veterans which meets their needs, but it will be in a much more efficient way than we do now. 

With, as I have described in the past, 200 systems and I do not know how many databases—probably hundreds 

again—that do not talk to each other, we do not have a whole-of-client view and we cannot support our clients the 

way we need to. The reality is: when we adopt a modern ICT infrastructure, we will be able to do that much more 

efficiently than we do now. For an individual claim to be processed now might require a delegate to open up more 

than a dozen systems at the same time. As our ICT gets older we only need the system to go down and they have 



lost possibly a day's work. There are really quite compelling reasons why we need to have this ICT 

redevelopment. It is much more than just that. 

Senator GALLACHER: There has been a substantial spend on this report; I am not sure whether it is $9 

million or $18 million. You are making a business case for a further substantial investment in the department. 

Will this report be made public at any stage? 

Mr Lewis: It will be a report of the government. It will be the minister's decision what he does with the report. 

Let me say this: there will be a lot of information that we will want to convey after budget night, depending on 

what the government's decision is, because at one level this needs to be thought of as a high-level blueprint for the 

transformation of the department. It is much more than ICT; it is an entirely new way of operating into the future. 

Senator GALLACHER: From the department's perspective this is informing the minister in advance of 

budget to get some funding. 

Mr Lewis: And the Expenditure Review Committee of cabinet. 

Senator GALLACHER: Will the final decision be for the Minister for Veterans' Affairs? 

Mr Lewis: It will be a government decision. 

Senator GALLACHER: It will be a cabinet decision, basically. When would we expect a decision to be 

made? 

Mr Lewis: I would be thinking the second Tuesday of May. 

Senator GALLACHER: Tuesday, 2 May. 

Mr Lewis: No, the second Tuesday of May. 

Senator KAKOSCHKE-MOORE: My office has recently been alerted to an issue where veterans claiming 

compensation related to service where that service is classified regularly have their applications for compensation 

rejected at the first instance because the DVA delegates do not have the authority to confirm when classified 

service occurred. Currently many of these rejections are being overturned on appeal. Has the department 

considered a more effective approach whereby, if a compensation claim refers to a classified operation, the claim 

goes through a delegate authorised to receive such information or Defence are provided with information and they 

then note that the claim period is correct? 

Mr Lewis: I would like to think that we would not have any cases like that, so thank you for raising the issue. 

It is an important one. We are aware that sometimes there are classified operations where we need to have 

procedures to deal with that, and I thought we did. I will turn to Mr Geary. 

Mr Geary: I checked around today on this particular issue and my staff tell me that they are not coming 

across that type of problem. We do have a point of contact in DVA who can contact Defence. We do not need to 

know the specifics of the service or the operation. We just get an answer: 'Yes, something has happened.' My staff 

tell me that most of those claims are for people who were involved, say, in the commandos or the SAS et cetera 

and that those claims are pretty much accepted. So I would be interested to know if you have come across some 

cases where that has not occurred. 

Senator KAKOSCHKE-MOORE: I have and I was speaking with someone just last week, on Thursday I 

think, who is an ex-submariner and there is some dispute or confusion around when he was on particular 

deployments and there not being any official records. In this particular case his application was refused by DVA 

and it is currently being appealed in the VRB. I understand the VRB have adjourned on the basis that they are 

waiting for DVA to provide information about his service history. There is a particular document that they need. 

The applicant, in this case, has the document and can provide it to the VRB, but the VRB are saying, 'No, we need 

to get that from DVA.' Just last week claims that relate to service which was classified were being rejected—I 

know of them personally. 

Mr Geary: DVA relies on the service documents from Defence, so whatever Defence give us is what we use. 

Senator KAKOSCHKE-MOORE: Is it possible that these service documents do not always contain 

information about particular missions that were classified? 

Mr Geary: Staff who work for me tell me that some of their service documents are not complete. I have staff 

working for me who are ex-service personnel and they say some things are missing from their service documents. 

That can happen, I guess, in the hurly-burly of deployments et cetera. 

Senator KAKOSCHKE-MOORE: So it is possible that that can happen. I think it is in many of those 

circumstances where the ex-service person then goes on to try to claim compensation and their service histories 

are incomplete. 



Mr Geary: Yes. 

Mr Orme: If that member has a document that pertains to the proof and the evidence of their service, then I 

would assume that has been submitted in a claim in the first place. If he has retained a document that he has not 

given to the department, then it is very difficult for the department to make a decision in the absence of that 

document. He has the documents— 

Senator KAKOSCHKE-MOORE: He did not obviously withhold it; he found it after he was told he needed 

to find it, and, with his own searches, he managed to obtain it in that circumstance. 

Senator Payne: I think it is very difficult and, in fact, verging on invidious to discuss individual cases in the 

context of an estimates committee. But certainly the officers from Veterans' Affairs and my officials from 

Defence would work together to facilitate rectification of any problems that you have identified through 

representations made to you. 

Senator KAKOSCHKE-MOORE: I appreciate that, and I had this person's permission to discuss this. 

Senator Payne: I understand that. I still think it is very difficult for the officials, though. It can become a 'he 

said, she said' circumstance. I do not think that is helpful. 

CHAIR: Do I interpret that Senator Kakoschke-Moore would be at will to share this information if she has got 

the permission of her constituent— 

Senator Payne: She has indicated that she is, and I understand that. I just think it puts the officials in a 

difficult position, but I know that Minister Tehan and his office would be very happy to look into this personally. 

Senator KAKOSCHKE-MOORE: Thank you. 

CHAIR: It would be wise to take the specifics of that up with them. 

Mr Lewis: I think the key point is that we will always then be relying on Defence. That is the reality because 

as part of every claim we process, we are essentially reaching back into Defence in relation to that service history. 

The quality of the service record is a matter for Defence. 

Senator Payne: And part of the effort that Senator Tehan is working on, and I am working on with him— 

CHAIR: Minister Tehan; we are not going to elevate him to Senator! 

Senator Payne: Indeed; I am severely chastened for my error—part of the effort that Minister Tehan is 

working on in terms of the seamless transition, which is what we would like to effect for serving members who 

are leaving Defence. We would like to effect a seamless transition between Defence and Veterans' Affairs, if they 

end up in the veterans' affairs context. Part of that is addressing problems just like this. 

Senator KAKOSCHKE-MOORE: Thank you. The reason I have raised that example is that I felt it was 

being put to me that this was not happening, and so I felt that I needed to put an alternative view to that. Just 

going on to the point that you made that sometimes service histories can be incomplete: what sort of evidence 

could be accepted by DVA in order to fill in those gaps? Would a statutory declaration of somebody who was 

with the particular person confirming that 'yes, they were present with me between these dates' suffice? 

Mr Geary: That can be taken into account, yes. 

Senator KAKOSCHKE-MOORE: Will it be enough? 

Mr Geary: It depends on the circumstances. 

Senator KAKOSCHKE-MOORE: Can you give me some examples of some other sort of qualitative 

evidence? 

Mr Lewis: There might be contrary views from other people at the time, for example. 

Senator KAKOSCHKE-MOORE: That they were not on that particular— 

Mr Lewis: Yes. 

Senator KAKOSCHKE-MOORE: How would DVA find that out? 

Mr Lewis: It is hypothetical. You raise such a hypothetical issue that I am not sure I can give you a lot of 

insight into how it would be assessed, because it depends on the circumstances at the time. 

Senator KAKOSCHKE-MOORE: With respect, though, it is not a hypothetical situation. 

Mr Lewis: But, as the minister just made the point, we cannot get into the specifics of an individual case at 

this inquiry. 

Senator KAKOSCHKE-MOORE: But I am just asking in general; would a statutory declaration be enough, 

and if not, what more— 



Senator Payne: You are armed with a lot more information than we are. 

Mr Lewis: I do not know what the stat dec might say. I do not know, when we make inquiries of Defence, 

what they might say. It would need to be looked at; that is the point. 

Senator KAKOSCHKE-MOORE: Is there any other guidance or suggestion you might make about what 

information would be helpful to DVA in terms of filling the gaps that exist in records provided by Defence? 

Mr Orme: If the individual gave an account of what their contention was—the dates the events occurred, 

what occurred, who was there at the time, and any supporting evidence that assists a delegate to make a 

decision—it would all be taken into account. In this case that you have identified previously, there was evidence 

that the delegate did not have available to them, and subsequently appeared. When delegates get all the 

information and the story in front of them in as simple terms as possible, they will make the decision based on the 

circumstances, and engage with Defence and engage with other sources to corroborate the evidence. If it is clear, 

then the decision is made in favour of the veteran. 

Senator KAKOSCHKE-MOORE: Thank you. I will leave my questions there for now, and I do appreciate, 

Minister, your indication that Minister Tehan would be willing to look into matters such as the ones that have 

been brought to my attention about service histories being incomplete and challenges facing veterans as a result. 

As part of the inquiry into veterans suicide that is being held by this committee, we had a public hearing in 

Brisbane last month, and at that hearing an organisation called Ruff Love appeared. Ruff Love are based in 

Queensland, and they train assistance animals for veterans, particularly those with some mental health challenges, 

such as PTSD, and some of them have been suicidal. The evidence they gave was incredibly compelling, and 

when I put to each of the individuals from that group whether or not they believed that their assistance dog had 

saved their life they all said yes. So, anecdotally at least, the benefits of assistance animals were heard by the 

committee on that day. 

We also heard that there has been an instance where DVA has approved an assistance animal for a particular 

person. We were not given any information about this, and I do not have any specifics. So, my questions are 

around how DVA went about approving the assistance animal and whether or not that is an option that is 

available to more veterans if they wish to pursue that particular aid. 

Mr Lewis: At this stage in restricted circumstances only. But I will ask Ms Foreman to assist the committee. 

Ms Foreman: At the moment we receive requests for two types of assistance dogs—one from people with 

sensory or motor inabilities and the other from people with mental health conditions. We run an evidence based 

system in relation to compensation and support. At the moment this evidence that dogs are able to assist people 

with picking up the remote control, turning on the TV or walking—for sensory and physical illnesses or 

disabilities, the evidence is that assistance dogs provide a very helpful service—in relation to mental health the 

evidence is not quite there yet. We are aware that the United States government is looking at this issue as well, 

and they will be reporting in 2018 on the ability or the efficacy of using assistance dogs to support people with 

mental health conditions. 

So, we are in touch with the United States defence services in relation to this study, and we are watching it very 

closely, and we are looking to see what that study shows in terms of the circumstances in which assistance dogs 

might be helpful for people with mental health conditions and what type of support we might need to give with 

the assistance dog. We might have to do other things as well. But the main thing is that we need to have some 

evidence behind us, and there is no evidence in this area. As you mentioned, there are quite a lot of anecdotal 

stories from veterans about how helpful and comforting they find being with dogs, but we just do not have the 

evidence yet. So, we are waiting for that study to be completed. 

Senator GALLACHER: Could I ask what the evidence would look like? 

Ms Foreman: It could look at a number of things, but it would look at what the experience has been in the 

United States for returned army officers et cetera in terms of the sort of support the dog has given them and, as I 

said, what other support we might need to give for people with mental health issues. It needs to be part of a formal 

treatment plan. 

Senator GALLACHER: So, you would need a doctor to certify that their mental health has improved 

through the experience with the dog. 

Ms Foreman: That would be one thing. But, as I said, we would also need to see what other supports— 

because caring for a dog is not just about the dog being there when you are not feeling well; there are 

responsibilities when you have a dog, and we would need to be sure that we were able to equip veterans who have 

mental illnesses with the right support so that if it does form part of their treatment plan— 



Senator GALLACHER: I understand perfectly what you are saying. I am just wondering what the evidence, 

whenever you get it, will look like. Will it be a collection of doctor's reports that say, 'Patient A has a 100 per cent 

outcome'? 

Ms Foreman: No. 

Senator GALLACHER: Or 'Patient B couldn't look after the dog and failed'? 

Ms Foreman: No. It would be much broader than that. 

Senator GALLACHER: So, what will it encompass? 

Ms Foreman: It would be broader in terms of the types of illnesses. It would look at the types of dogs, what 

sorts of services would need to be provided and, as I said, what sort of additional support may need to be given to 

the veteran in certain circumstances. 

CHAIR: Certainly anecdotally we heard from witnesses saying that the number of visits they are making to 

psychologists and psychiatrists has dropped dramatically. 

Ms Foreman: Yes. 

CHAIR: And Senator Kakoschke-Moore can correct me, but I think one particular person said that their 

actual levels of medication have dropped dramatically as a result. 


CHAIR: Since we have interrupted your line of questioning— 

Senator FAWCETT: But we are all coming in on your side, so— 

CHAIR: I am not declaring my veterinary interest at all! 

Senator FAWCETT: In fact, veterinary interest is what I am going to talk about. Back as far as 2004, when 

we were looking at setting up a veterinary school in South Australia, one of the parts of the argument was actually 

around some studies that had been done on pet therapy. So, clearly there is a body of evidence out there already 

working with people with a whole range of conditions, from the autism spectrum through to other mental health 

issues. Has the department sought to do a desktop study of existing work in controlled trials et cetera to establish 

the efficacy, rather than repeating what has already been done? Have you taken the approach of seeing what 

already exists that might be able to give you those guidelines you are looking for? 

Ms Foreman: We have, but at the moment the evidence is not in yet regarding using those sorts of dogs as 

part of a medical treatment plan, which is what we provide to veterans. I am hoping that it will come in and that 

we will get a clear idea of when we can provide such dogs and, as I said, what other supports might need to be 

given. But we need to see that from a medical perspective and an overall perspective that giving an assistance dog 

to a veteran with a mental health condition is a good outcome and the dog can be cared for. But Mr Bayles just 

wanted to say something to add to that. 

Mr Bayles: The United States study Ms Foreman referred to is a study being done by the United States 

Department of Veterans Affairs. It is a controlled study. They are looking at matching veterans who have PTSD 

with dogs for a period of time, and then after that time, over the course of maybe 18 months, assess what the 

impact on the veteran has been of having had that dog in terms of quality of life and improvement in health and 

wellbeing. So, it is a controlled study and it will tell us more about whether there is an effect that is more than just 

a short-term effect—is there a long-term effect? And it will be a properly constructed research study, as opposed 

to just an individual doctor saying, 'This veteran would benefit from having a dog.' This is a research study being 

done by the United States Department of Veterans Affairs. 

Senator FAWCETT: Sure, but I guess my question goes to: why put all of your weight on one study if there 

have already been multiple studies done that have measured the efficacy of the interaction between a person who 

has a range of conditions and the dog? It strikes me that we are perhaps unnecessarily delaying support that would 

be beneficial to the veteran and potentially more cost-effective for DVA in terms of delivering service. 

Ms Foreman: Just so that you are aware, this was recently considered by the Military Rehabilitation and 

Compensation Commission and the Repatriation Commission, and they are very keen to see the future evidence 

that we can find. But at this stage it was felt that there was not the evidence to support it. There is a lot of 

anecdotal evidence, but there has not been a controlled study, as Mr Bayles mentioned, that provides evidence 

that a companion dog assists with medical treatment. And that is what we need to have before we are able to go 

out and provide and pay for dogs for veterans with mental health conditions. 

Senator KAKOSCHKE-MOORE: Was I correct, then—and please correct me if I am wrong: has DVA 

approved an assistance dog to date? 



Ms Foreman: Yes, for people who have sensory and physical conditions. We have a framework for that, yes. 

Senator KAKOSCHKE-MOORE: Okay. Just in light of what was said, I wanted to double-check my 

understanding of the circumstances in which those approvals took place. So, there is more than one? 

Ms Foreman: We might have to take that on notice. I am aware of one. 

Senator Payne: Sorry—what was that question, Senator? 

CHAIR: The question was on financial support for a veteran having, or the cost of, a dog, but it has been on 

the basis of a defined condition— 

Ms Foreman: Sensory condition. 

CHAIR: which clearly the dog assists with. 

Senator Payne: I am interested in Senator Kakoschke-Moore's questioning. I might take it up with the 

Minister for Veterans' Affairs myself. 

Senator KAKOSCHKE-MOORE: Thank you. 

CHAIR: And Minister, you will be pleased that in addition to the canine side of things there is also a program 

with horses. 

Senator Payne: Canine, equine, feline, piscine—all in favour! 

Senator KAKOSCHKE-MOORE: Chair, I was going to move on to a completely separate line of 

questioning. I am not sure if now is the time to do it. 

CHAIR: Use the opportunity while you have it. I will go to Senator Roberts in about two or three minutes. 

Senator KAKOSCHKE-MOORE: I will see what I can do on this one as it may be a bit contentious. It is in 

relation to the government's digital readiness bill and, in particular, the minister's rules surrounding the public 

disclosure of personal information. Over the weekend there were reports about similar rules within the 

Department of Social Services being used to authorise the disclosure of personal information in response to 

complaints that had been made by an individual in relation to Centrelink's debt recovery system. I am curious to 

know whether the extent of the information that was released by the Department of Human Services to the media, 

to correct the record—I think that was the basis on which the information was released—would be as much as 

under the rules that are proposed in this legislation? 

Ms Spiers: I have not been able to confirm this directly with the Department of Human Services, but 

according to the media releases that I have seen in relation to the particular event you are referring to, the Human 

Services release of information, in accordance with that issue, was not the equivalent public interest disclosure 

rule that is being proposed by DVA's digital readiness bill. In fact, I am informed that it is in accordance with 

section 202 of the Social Security (Administration) Act 1999—the secrecy and confidentiality elements of that 

particular act. When we were looking at the bill that is currently before the House of Representatives, the digital 

readiness bill, we were proposing public interest disclosure rules using the equivalent of 208 of the Social 

Security (Administration) Act 1999. So I cannot comment on the extent of the disclosure that happened because I 

do not think it is like for like provisions. 

Senator KAKOSCHKE-MOORE: I apologise but I do not have those sections of the social security act to 

hand. Is section 208 narrower in scope than section 202 in terms of the type of information that can be released? 

Ms Spiers: I am not sure. I do not have 208 with me—I have 202. But 208 is the public interest disclosure 

equivalent that allows the ability for the Minister for Social Services to make rules for the purposes of the 

disclosure. There are no rule-making powers as far as I can read with section 202, which is the provision I am told 

was the fundamental underpinning of the disclosure at the weekend. 

Senator KAKOSCHKE-MOORE: I see. There were no rules governing the release of information under that 

particular section of the act? 

Ms Spiers: To the best of my knowledge. But, as I said, I am relying on media reports that suggested that it 

was section 202. It is a disclosure power at section 202, and it is not the provision that we were relying on as the 

equivalent disclosure provisions for the public interest disclosure rules that were developed in the digital 

readiness bill. 

Senator KAKOSCHKE-MOORE: If you could confirm your understanding of that on notice that would be 

fantastic. 

Senator MOORE: Ms Spiers, we met the other day. 

Ms Spiers: Yes, Senator. 



Senator MOORE: I am interested in the same question that Senator Kakoschke-Moore just asked, but I 

understand that we have to clarify the legislation. What I am more concerned about is the final end result. Is the 

kind of information that we have seen publicised quite clearly in the media in the last couple of days, and the 

response to that information, the kind of information that we are considering in the other piece of legislation? 

Listening to evidence the other day, it was clear that under special circumstances to correct the act that may have 

impact on the wider community when there are those provisions that the secretary could authorise the release of 

details of someone's claim. I would like on notice the parameters of the kind of information that can be released. 

When I read that information, I spoke with Senator Gallacher. It seemed to me that it was exactly what we were 

talking about in our hearing. People had made a claim about a process in the media and then the secretary of 

Human Services felt—I presume; we have not asked Human Services—that that was bringing the department into 

such disrepute and it could cause other people to fear what was going on, that it may be a similar outcome. Could 

we get that information clarified? 

Ms Spiers: I am happy to do that. I just want to clarify with the committee: the ministerial rules that apply in 

the social services context are obviously the responsibility of that portfolio— 

Senator MOORE: Yes, absolutely. 

Ms Spiers: The ones that are being developed by Minister Tehan for the digital readiness bill are specifically 

tailored for the veteran community and there are aspects of those rules that are very much akin to the issues that 

are of concern in terms of the release of information. It is very difficult to compare. While we said, and we have 

made it clear, that the digital readiness bill and its rules are based on the original ones from Human Services and 

Social Services, I think that is where the comparison should end, because after that we have made quite distinct 

and significant changes to the draft rules—excuse me, Minister Tehan has; I will correct who is making the 

changes—and those are very much tailored to the experience of the veteran community. 

Senator MOORE: But could the end result be that the background to someone and the background to the way 

they made a claim would be the wideness of the information that could be released? That is what I am interested 

in. 

Ms Spiers: That is fine—and I think Minister Tehan will be comfortable with me saying it to this 

committee—there are very clear limitations to the level of information that is being proposed in the public interest 

disclosure rules in relation to what can be released. We shared that with the committee the other day. In all the 

consultation that has been very clear. The other thing I think the minister will be comfortable with me sharing is 

that, following the consultation with the Office of the Australian Information Commissioner, one of the other 

limitations to be proposed in the rules is that there has to be a genuine attempt to correct the record using deidentified 

data first. In terms of some of the questions you have asked about the operation of the Human Services 

rules, that would possibly be a matter that should be referred to the relevant minister. I am not sure of the process 

for that. 

Senator MOORE: That will be tomorrow night. 

Senator GALLACHER: Just for clarity, will the rules be put up at the same time as the legislation? 

Ms Spiers: No. 

Senator GALLACHER: So the legislation passes and the rules are contained elsewhere? 

Ms Spiers: That is— 

Senator GALLACHER: When does someone who may be concerned about this get a chance to look at both 

of those? 

Ms Spiers: The proposal is that the legislation passes which authorises the making of the rules. Without the 

legislation passed, there is no authority to make the rules. At present, the work that Minister Tehan has been 

undertaking, in consultation with the shadow minister for veterans affairs, has been looking at a draft that has 

been tailored to the purposes of the veteran community. As I understand from my discussions with the minister, 

he is comfortable with the consultation with not only the veteran community but the shadow and other like 

parties, that the— 

Senator GALLACHER: So the rules will be subject to the consultation with various groups? 

Ms Spiers: Correct. Once he is comfortable with making them, he executes the rules, but there is a list of 

instruments, so they are subject to a disallowance requirement sitting in both houses. 

Senator GALLACHER: They stand for 15 days? 

Ms Spiers: That is correct. 



Senator GALLACHER: Thank you. 

Senator ROBERTS: Thank you for appearing tonight. We have three former servicemen in our team and 

they are all very proud of serving the country. I am also cognisant of your responsibility to protect taxpayer funds. 

I am also aware of the responsibility that veterans have shown at forums I have attended, especially in connection 

with post-traumatic stress disorder. It really is remarkable to see these people. It is a very difficult topic. I will 

start by asking: on average, what percentage of claims for compensation by former and current members of the 

Australian defence forces are initially rejected by the Department of Veterans Affairs? 

Mr Orme: In 2015-16 there were 44,588 primary decisions. A primary decision is the initial decision to 

accept or reject liability. Liability is the contention that the veteran has served, the veteran has an illness or an 

injury that is diagnosed and we accept liability for that injury or illness as it was caused by their service. There 

were 44,588 in 2015-16. Of those decisions, 5,543 or 12.4 per cent were reviewed. Of those decisions that were 

reviewed, 2,022—4.5 per cent—were set aside or varied. That is when it goes to the Veterans' Review Board or 

the Administrative Appeals Tribunal. The principal reason that a decision is varied is that, after the initial decision 

is made, further information is provided. We saw an example of this earlier this evening: service was 

subsequently found after a document was asked for and the veteran found it. Further information is provided, and 

that is generally the main reason decisions are changed. Overall, of those that are set aside or varied, that is 36 per 

cent of those who actually present across the board. In broad terms, there were 44,588 decisions in 2015-16 and 

5,543 were appealed. Those set aside were 4.5 per cent of the total. 

Senator ROBERTS: How many were rejected initially—what percentage? I do not understand all the 

technology. 

Mr Orme: For example, a person might make a claim that they have cataracts caused by their service. On 

investigation of that claim, you may find that those cataracts were actually congenital, as in they were caused at 

birth and were not caused by service, so the claim would be rejected. Of course, a number of claims like that may 

not be rejected. The ones that are rejected and then appealed are the ones that I think are in contention. A veteran 

might say: 'I accept that rejection. The cataracts that I have are congenital, not caused by my service. Okay. I'm 

not going to appeal that.' That is, a simple act of rejection does not mean that the veteran is dissatisfied. Quite 

often, they understand what has caused that particular medical condition. If they are not satisfied with the 

rejection then they can go to appeal. Those appeals are what I have been talking about—the 5,543. They go on 

appeal to the Veterans' Review Board or, subsequently, the Administrative Appeals Tribunal. 

Senator ROBERTS: It is about 12 per cent? 

Mr Orme: It is 12.4 per cent. 

Mr Lewis: Could I just add one comment. Your question was about PTSD. I just want to make sure— 

Senator ROBERTS: It was not just about PTSD. It was about all— 

Mr Lewis: It was about mental health conditions et cetera. I want to make it clear that we are talking about the 

liability path or the claims-processing path now. It is important to recognise that the government decided in the 

last budget to provide non-liability health care. Provided you have served at least one day in the ADF—it does not 

matter when—you now have access immediately to support for mental health conditions, including PTSD, 

anxiety, depression, substance abuse and alcohol abuse without the need to establish a claim. In terms of the 

healthcare treatment path, people can get support straightaway. We are trying to use every avenue we can identify 

to get that message out, because there are a lot of people out there right now who are pursuing just the liability 

path, but they also have immediate access to health care through the non-liability path. 

Senator ROBERTS: Who do we speak to about that? 

Mr Lewis: We are the people. It is our department. We run it. This is available. It has been announced any old 

number of ways, but it is very hard to get the message out to everybody. Please, if you are talking to anyone and 

they have served in the ADF, tell them we have automatic, available health support for people with any of those 

five mental health conditions, which, by the way, then entitles them to counselling and support through the 

Veterans and Veterans Families Counselling Service. 

Senator Payne: Certainly, the department could provide an update pack of information to senators' and 

members' offices to prompt contact with Veterans' Affairs in relation to those issues. I think that might be timely, 

given the issues that you are raising. 

Senator ROBERTS: Thank you very much—maybe that would be appropriate and timely—but can I talk 

with someone about that specifically? 

Senator Payne: Yes, of course. 



Senator ROBERTS: Mr Lewis, is it? 

Senator Payne: I am actually the minister. I will provide a contact for you with the minister's office. 

Senator ROBERTS: Thank you. As you know, we get deluged with paperwork, and it is hard to sift what is 

really meaningful. We would like to share that with people, because one of the things I have recognised is that, in 

the community of former service men and women, there are people who go into their shell and do not 

communicate. We recognise that as a problem. They recognise that. They themselves are forming a lot of selfhelp 

groups spontaneously. There are a lot of wonderful people doing amazing things out there. What sort of 

claims dominate? I was not referring just to PTSD claims. What sort of claims dominate—cataracts, PTSD? 

Mr Orme: I will go to a list of the top 25 conditions. The top one is tinnitus, which is the ringing in the ears. 

The second is acute sprain and acute strain. The next is fracture. The next is rotator cuff syndrome. Then there is 

lumbar spondylosis, shin splints, osteoarthrosis, PTSD and— 

Senator ROBERTS: What rank would PTSD be? 

Mr Orme: Seven or eight. Most of the conditions that present are musculoskeletal, based on the wear and tear 

of military service across three services. By far, the very vast bulk of our claims are musculoskeletal. PTSD 

comes in around the order I just mentioned. Then there is intervertebral disc prolapse; internal derangement of the 

knee; sensorineural hearing loss; dislocation; chondromalacia patella; depressive orders; joint instability; cut, stab, 

abrasion and lacerations; plantar fasciitis; external bruise; adjustment disorder; inguinal hernia; labral tear; acute 

meniscal tear of the knee; cervical spondylosis; Achilles tendinopathy and bursitis; and alcohol dependence and 

abuse. They are the leading 25 conditions. 

Senator ROBERTS: And the last one would possibly reflect stress in some way? 

Mr Orme: I do not have a medical background but you could draw that inference. It would seem to make 

sense. Many of those comorbidities tend to travel together, particularly in the mental health space. Depression, 

anxiety, substance and alcohol abuse travel in a very unhealthy pack, and our veterans suffer from the 

comorbidity of those things as well as, quite often the musculoskeletal thing going with it. I think one of the 

unique elements of veterans and treating veterans is ensuring not only the physical presentation that might come 

when they visit their GP but also those other elements of mental health that may arise as well. 

Senator ROBERTS: Do you have a breakdown comparing those top 25 for people who have served in armed 

conflict versus those who have not? 

Mr Orme: The musculoskeletal ones are generally due to the rigours of training. We have done some work— 

Senator ROBERTS: That is what I was getting at. It is a very strenuous occupation if someone goes into 

battle—that is obvious—and it must affect him or her. I am just wondering if there is a difference, especially with 

mental health issues. 

Mr Orme: The difference appears in the way we assess the contention that the veteran puts forward—the 

burden of proof, if you like. If their condition occurs during warlike service, they have a more beneficial 

interpretation of the likelihood of that event having occurred. So the burden of proof is lesser; it is a reasonable 

hypothesis. If they are in peacetime training, the burden of proof is slightly higher to establish the facts of the 

injury being related to service. So, at the very core of the legislation, is the notion of warlike service and the more 

beneficial interpretation of claims that are made under the conditions of warlike service. 

Senator KITCHING: This committee has been doing an inquiry into suicide by veterans and ex-service 

personnel. We had some hearings in Brisbane and some of the people who spoke in the community statements 

part of the hearing indicated that their claims had taken some time, including musculoskeletal claims or injury that 

they were claiming for. Some people had obviously been in the system for many years and their claims had not 

yet been approved. I think one person was from a base. So it was not from being in a theatre of war; the injury 

occurred at a base. His claim has not been accepted yet but it had been in the system for 9½ years. If it is accepted 

as quite a common cause, how can it be that it has taken so long for his claim to be finalised—whether it has been 

accepted or not? 

There was some very upsetting evidence given by a widow. She had let DVA know that her husband had 

attempted suicide on eight previous occasions and, on the ninth, he was successful. I am wondering how those 

claims are dealt with and why the burden of proof seems to be so great that these claims are not processed or it 

becomes too late, in the absolute final sense of that word. I am wondering why the system is such that it is not like 

a Comcare or a workers comp system but rather it seems to be some other system where it becomes incredibly 

stressful for people to put in a claim. 

Ms Spiers: It is difficult to give an exact answer with the circumstances you mention. 



Senator KITCHING: I understand. 

Ms Spiers: Often when people say that they are having difficulty with their claim, they are giving a generic 

comment which is probably more likely about the assessment of the claim. There are two elements to our 

claiming processes. There is initial liability, as Mr Orme talked about. So we accept the condition as being service 

related. That is usually a relative straightforward decision. But, in determining the compensation that is payable— 

the acts describe it all differently—in essence, you need the condition to be permanently and stable. Often what 

happens is that we accept liability but say that we cannot assess it at the moment because the condition is not 

permanent and stable. I think you mentioned a musculoskeletal issue. 

Senator KITCHING: A spinal injury was one of the examples. 

Ms Spiers: That is a great example where often the condition is not stable for some time and then when the 

injury stabilises often people get back surgery. 

Senator KITCHING: Should someone wait until they are permanently disabled in order to have their claim 

processed? 

Ms Spiers: No, if they are permanently disabled. 

Senator KITCHING: No, I understand. I am asking whether, in order for it to be stable for you to be able to 

assess a condition at that point, it has to worsen. I cannot imagine that, having an injury for 9½ years is actually 

going to improve the condition of the person, and it possibly adds mental stress due to the fact that someone is 

waiting so long in limbo land before they have their claims looked at. 

Ms Spiers: I understand your comment about 9½ years. Without the specific case, it is difficult to comment. 

Senator KITCHING: I think I can forward you to the case number. 

Ms Spiers: But the key to this is that all the compensation acts we administer require the condition to be 

permanently stable—not that it has got worse; just that it is permanently stable. Even if that is not permanently 

stable for the purposes of compensation, if it limits the person's ability to work, we will still provide incapacity 

payments—that is for the purpose of their inability to work--an—of course health care is provided. It is a difficult 

case to respond to in the generic, but that is likely to be the reason that it took some time to determine the claim. 

Senator KITCHING: It has not been determined. Chair, when we come back perhaps we could discuss the 

widow who had notified DVA that her husband had attempted suicide eight times. 

CHAIR: Can I just give a caution that in Senate estimates in a public forum it is a little difficult to start 

discussing specifics. 

Senator KITCHING: It is obviously all on the public record, because— 

CHAIR: Correct, but we had a situation a bit earlier and the decision really was that the opportunity presents 

for you to take that offline with the officials and perhaps go into greater detail. Not in any way wanting to limit— 

Senator KITCHING: Chair, not going into specifics, perhaps the department would be able to take on notice 

whether there is a review of the relevant legislation and how it compares to a Comcare or Victorian workers' 

compensation scheme or state compensation. 

Ms Spiers: I can tell you now how Comcare operates. It operates the same way. 

Senator KITCHING: It does not leave people waiting for so many years. 

Ms Spiers: Senator, once again, without the specifics it is difficult. We would not leave people without some 

form of support. So, when people are saying that their claim is taking so long, I think it is an aspect of their claim. 

But other services would still be being provided to the person. But, as I said, we are happy to go through the 

specifics with that case once we have some details. 

Senator KITCHING: I might forward on to the minister those details, and certainly the case of the widow 

who begged the department to intervene to help her husband. 

CHAIR: I think that would be the appropriate thing to do. 


Senator GALLACHER: Going to the subject of mefloquine, the minister recently announced via a media 

release in September that the government would: 

… establish a formal community consultation mechanism to provide an open dialogue on issues concerning mefloquine 

between the Defence Links Committee and the serving and ex-serving ADF community… 

Has that happened? Has it been formally achieved? 



Ms Campion: It is in train. The first part of the consultation focus for Defence links took place in Townsville 

in December 2016. Over a period of three days, six sessions were held. I think about 90 people attended. At those 

sessions, they were provided with information from the Repatriation Medical Authority about the statement of 

principles. They were provided with information about DVA's claim process, and some people from DVA were 

there to help people who had questions about how to make a claim related to mefloquine. They were also 

provided with information on the range of services that are available to them through DVA. A report from the 

process is going to the Defence/ DVA Links Steering Committee meeting, which is being held next Monday, and 

following that the committee will consider what else should be done in relation to linking with the community to 

engage them about their concerns with mefloquine. Some further advice will be available to the minister 

following that meeting on Monday. 

Senator GALLACHER: You mentioned that 90 people attended the forum. Is there any idea about how 

many were veterans and how many were advocates or representatives? 

Dr Gardner: I was at those meetings in Townsville. They went over three days and 91 people in total turned 

up. The vast majority of people were ex-serving. However, the largest number of questions and suggestions and 

most of the information actually was not to do with mefloquine. They raised a whole stack of other questions. 

There were some advocates there, and there were also some of the mefloquine veterans' representatives. Colonel 

Ray Martin, for example, was there, and lots of the RSL people and some of the DVA-trained advocates were 

there. There were family members and there were current serving and ex-serving people. 

Senator GALLACHER: Ninety-one people seems like a fairly good roll-up? 

Dr Gardner: Yes, it was good. We were not sure how many there were going to be. As you probably know, 

the mefloquine group, predominantly, is based in and around Townsville, which is where most of the people 

deployed from. There are about 400 people in that area who are significantly concerned about possible health 

effects related to mefloquine. We were not sure what the numbers were. As Ms Campion said, we arranged for 

presentations from DVA, Defence and the RMA, and we staggered these presentations through morning, 

afternoon and evening to enable the maximum number of people to attend. We also did some special briefings for 

the media, including for one particular journalist from the Townsville Bulletin, who had been getting some very 

wrong information. We spent about three hours with her, coordinated by the minister's office, so that she could 

ask whatever she needed to and get a straight answer. 

Senator GALLACHER: Is there a central point of access to the Defence links committee? Have you got a 

website, or an office, or a phone number? How does someone engage with you? 

Ms Campion: There is not at the moment, but the committee, obviously, comprises representatives from DVA 

and Defence, and Defence does have an email address on the mefloquine component on their website where 

people can send questions and comments or raise issues of concern. They can make their way to the committee 

through that mechanism. 

Senator GALLACHER: Is the department aware of any groups who have wanted to participate in dialogue 

with the committee and have not been able to? 

Dr Gardner: There are multiple groups in this space. In particular, there is a group which used to be called 

the mefloquine and tafenoquine vets association. It has now changed its name to the Quinoline Veterans and 

Families Association. They have put to the minister a submission asking for a whole range of things, including, 

basically, for them to coordinate and deliver all the services. The second part of their request is in relation to 

research funding for studies into what they would call 'chemically acquired brain injury', which they believe is 

related to the taking of mefloquine. 

Senator GALLACHER: Are they able to communicate with the committee? Can they open a dialogue with 

the committee? 

Dr Gardner: Yes, the communication is open. 

Senator GALLACHER: In addition to the media release, there is the statement that there will be 

comprehensive online resources providing information on antimalarial medications. 

Dr Gardner: Yes, that exists. Defence has had the primary coverage of this. They have a very comprehensive 

website to do with mefloquine and tafenoquine on their Joint Health Command website. It is publicly accessible. 

As the first assistant secretary said, there is also a dedicated Defence email address that allows people to ask 

questions. I am informed that the Surgeon General has personally been involved with over 150 people who have 

written through that and who have said, 'I think I might have been exposed. Was I part of the trials, and did I sign 

the informed consent forms?' In every case, Joint Health Command has been able to find that information and 

provide copies to the inquirer. DVA also has on its website a limited subset of this and hyperlinks that go straight 



to the Defence Joint Health Command website. We have also set up a small specialist processing team in 

Melbourne—similar to what we did in the old days of the F-111 programs where a small specialist processing 

team was set up in Brisbane, at the time, to handle the very complex cases that arose. I think the other thing is 

that, although some of the veteran advocates are claiming that there are huge amounts of mental ill health due to 

mefloquine, we in DVA have very little evidence of this. As of the last month, or the end of last year, there were 

less than 12 cases that we are aware of in the whole of Veterans' Affairs. That is people who have actually made 

claims. There could be other people out there, as the deputy president said earlier on, who have not put in claims 

and, therefore, we would not know about them, but it is not a massive problem. 

Senator GALLACHER: This committee is set up; people have been to it; groups are able to communicate 

with it; there are online resources developed and available. Is there any further research being undertaken? 

Dr Gardner: Yes. You may recall that a researcher by the name of Dr Jane Quinn gave evidence at an earlier 

inquiry, and she put up a submission for funding for a research study using existing data in the defence realm to 

look at the mental health outcomes of the nearly 2½ thousand people who have ever taken mefloquine in the 

ADF. 

Senator GALLACHER: That figure is 2½ thousand—that is the established number of people who have 

taken it? 

Dr Gardner: The number is very close to 2½ thousand. 

Senator GALLACHER: And you have 12 identified cases of compensation. 

Dr Gardner: I said that we are aware of about 12. Again, part of the problem is that if people put in a claim 

for a mental health condition, it may get up without them saying, 'I think the cause is mefloquine.' That is why I 

say there could be more, but they are not huge numbers. In September last year, I understand, our compensation 

processing people did put a flag into our system so that if the word 'mefloquine' is mentioned in a claim, we will 

be able to track those on a go-forward basis. 

Senator GALLACHER: Just for my education, I actually got some malaria medication recently, and it was 

called Malarone. 

Mr Lewis: Lariam, I think it is. 

Dr Gardner: No, Malarone is the second one, I think. 

Senator GALLACHER: They gave me a list of side effects, which I did not get any of. But I think they said 

that very rarely you could actually take it and just die. So out of these 2,500 people, do we have any idea how 

many have reported side effects at all? 

Dr Gardner: Yes and no. The yes is for the people who have put in claims to DVA. We know and understand 

them. We do not know about the ones which have not put a in claim, which may be 80 per cent of the total 

number. However, Defence has studied this very carefully, and they have a list of all of the people known to have 

ever taken part in those trials. The Surgeon General has provided information about that at previous estimates. 

Defence also has a suicide database which refers to all the current serving members known to have committed 

suicide while in service since the year 2000. The good news is that there are no names on the suicide database and 

also on the mefloquine database. It does not mean there could not be one or two, but there is certainly not a 

plethora of cases. 

Senator GALLACHER: Is a report being prepared for government on this issue? Basically, are all the 

existing medical evidence and matters you have referred to collated and handed to government? 

Dr Gardner: Yes, certainly. This is not being done specifically in relation to Defence. For example, the 

Therapeutic Goods Administration in Australia, which is part of the health department, controls the licensing and 

registration of these medicines. In the civilian community last year in Australia, there were nearly 15,000 

prescriptions issued for mefloquine versus 2½ thousand in 20-odd years in Defence. If there was a massive 

problem there, this drug would have been withdrawn from sale, and the Commonwealth would have shut it down 

instantly. 

The Department of Veterans' Affairs and Defence do acknowledge that some people are adversely affected by 

these drugs, and that is in writing and in the letters the Surgeon General has written to affected veterans. But the 

good news is that the vast majority of those neuropsychiatric side effects cease very quickly when you stop the 

pills, usually within four weeks. As you may know, mefloquine has some special advantages in that it has a long 

half-life and you only need to take it once a week whereas the other ones, like doxycycline, or Vibramycin, you 

have to take daily. 



Mefloquine has some real advantages, but, as you may be aware, in today's ADF it is only the third-line drug. 

Even then, if you cannot take the other two, DVA occasionally prescribes mefloquine to veterans whose doctors 

specifically request it. It is a licensed drug, and our numbers range from between 15 and 25 per year in total 

across the veterans' affairs portfolio. 

Senator GALLACHER: Has the Minister for Veterans' Affairs has undertaken to establish a dedicated DVA 

mefloquine support team? 

Dr Gardner: That has been done. I mentioned earlier that we have this processing team in Melbourne who 

have been taught. The other part of it is that in the two weeks before the Townsville outreach program in 

December, I hosted an evening meeting in Townsville for general practitioners and clinical psychologists to bring 

them up to date, in conjunction with the ADF, on anything to do with mefloquine. We got their signed consent, so 

that when veterans came to those Townsville three-day meetings—we had the 91 people—if anyone said, 'My 

doctor does not know about mefloquine. Who can I see?' We will say, without recommending, 'Here is a list of 

five doctors, pick one of these. All of these people know about this and are prepared to help you if they can.' 

Senator GALLACHER: How many FTEs would have been in this dedicated team? 

Dr Gardner: I believe there are four, but I would have to double check that. John Geary might be able to give 

us the numbers. 

Mr Geary: As Dr Gardner said, we get very few claims for this. It is not actually a condition by itself. Most of 

the people who make contact with the assessment team in Melbourne already have claims accepted. 

Senator GALLACHER: How many people are in this team? 

Mr Geary: We spread it, given there are only a dozen claims a year. 

Senator GALLACHER: So there are not a lot of claims. 

Mr Geary: No. 

Senator GALLACHER: The work is dedicated to them but they do other work as well. 

Mr Geary: Absolutely, yes. 

Senator GALLACHER: Is methloquine a priority? 

Mr Geary: It would be, yes, for this team, amongst the other priority claims we get. 

Dr Gardner: There is a problem, here, for veterans. The problem is that many of these veterans believe that 

all of life's current problems are due to having taken mefloquine tablets 20 years ago. The other thing is that under 

two of our three acts these claims are required to be determined in accordance with statements of principles. The 

Repatriation Medical Authority has very carefully looked at the evidence here. It currently has 15 conditions that 

are related to mefloquine or could be related to mefloquine where mefloquine exposure is a factor, but it is not the 

conditions which some of the claimants would like to see. For example, the RMA does not accept that mefloquine 

causes acquired brain injury. By the way, there is no other international evidence, globally, accepted in this space. 

So that is an area of unhappiness with some of these groups. 

Senator GALLACHER: If a veteran contacts the mefloquine team are they able to get referred to a specialist 

who would advise them of— 

Dr Gardner: Ideally, a veterinarian who has a condition which they believe might be service related should 

go and get their diagnosed health condition diagnosed by an appropriate specialist. And if they lodge all that 

paperwork the team can assess it and make a speedy decision. The problem is, as I alluded to before, if they are 

claiming chemically acquired brain injury due to mefloquine (a) there are no test for it, (b) it is not accepted by 

the Repatriation Medical Authority and (c) there is no other internationally accepted evidence that suggests this is 

a diagnosed condition. It does not have an ICD-9 or 10 code and it is in the too-hard basket. 

Ms Campion: If I could add to that, in 2014, as part of the budget measure, a post-discharge GP healthassessment 

item was introduced under the MBS. So we are encouraging people who have left the PDF to 

undertake this assessment. It is a very comprehensive assessment looking at all aspects of their health. Late last 

year Dr Gardner wrote to the colleges, I believe it was, bringing to their attention the issue of mefloquine so that 

as part of undertaking that assessment GPs were also aware that some people presenting for the health assessment 

may well have taken mefloquine, and they are equipped to provide them with advice. 

Senator GALLACHER: I have no knowledge of the subject other than what I have been exposed to through 

the work of this committee. What I am really asking is, if a veteran contacts the mefloquine team, are you able to 

send them to a specialist or refer them to someone who knows about mefloquine? 



Dr Gardner: Yes, that is possible. There are also GPs around Australia who have special knowledge in this 

space. Again, some of the mefloquine advocates are pushing for the fact that there are, what they believe, special 

diagnostic tools which are not available anywhere in Australia and for which there is no internationally accepted 

evidence supporting it. 

Senator GALLACHER: Do you give support to veterans who might need to travel significant distances to 

see a mefloquine specialist? 

Dr Gardner: If there were such a beast, as a mefloquine specialist, the answer is yes. We do provide, 

routinely, transport to the nearest appropriate specialist if a medical specialist in that region is not available. So 

there is no problem there. 

Senator GALLACHER: Are there specialists who specialise in mefloquine treatment? 

Dr Gardner: No, there are none. On that point, Professor Sandy McFarlane, who is DVA's specialist 

psychiatry adviser and has given advice to committees before, undertook a very detailed literature review of the 

mefloquine data, in the middle of last year, for Defence. His report is available on the Defence website. It 

basically says that there is no convincing evidence in this space, and there are no special tests which can be used 

to diagnose post-mefloquine neuropsychiatric problems. 

Senator GALLACHER: Thanks very much, Dr Gardner. I want to move on to the Veterans' Employment 

Program and how that has progressed. The Prime Minister formally announced a number of actions designed to 

tackle veterans' unemployment, and one of these was the industry advisory committee. Can the department advise 

who is on the industry advisory committee? 

Ms Foreman: Not just yet. We will be able to do that shortly. 

Senator GALLACHER: We are talking about 18 November—so three months ago; 2½ months ago. Are we 

still waiting for that committee to be formed? 

Ms Foreman: That is right. 

Senator GALLACHER: What about some terms of reference? Are there any terms of reference? 

Ms Foreman: Yes, the terms of reference have been drafted, but they are not available at the moment. I can 

tell you the overall purpose of the body itself. 

Senator GALLACHER: Probably in the interests of time, as there is quite a comprehensive set of questions 

we might get to, we might get through quicker if we just follow the script, so to speak. So there are draft terms of 

reference that are not for public release yet. 


Senator GALLACHER: Has the committee met? Obviously not, as it has not been formed. Do we have any 

idea when we will conclude the composition of the committee? 

Ms Foreman: Yes—in around the next month. We expect the first meeting to be towards the end of March. 

Senator GALLACHER: Would outcomes be public? 

Ms Foreman: That would be a matter for the minister, I think, at this stage. 

Senator GALLACHER: I suppose they would need all the publicity they could get. 

CHAIR: One would hope so. 

Ms Foreman: Yes, because of the awards ceremony. Part of the package of measures that the Prime Minister 

announced was an awards ceremony each year to highlight examples of good practice, and also to highlight where 

appropriate strategies have been developed by corporations to attract and retain veterans. I think you would 

expect that there would be some information released. 

Senator GALLACHER: From my understanding, its role is to develop strategies to recruit and retain 

veterans. 


Senator GALLACHER: Has the department got any input into how that can be achieved? 

Ms Foreman: That is the role of the board, and there will be people on that board with a background in 

recruitment strategies. They will put together that advice for other corporations to use as examples of best 

practice. 

Senator GALLACHER: Is it the role of the committee to develop strategies and then disband, or is it to 

monitor those for— 



Ms Foreman: No. It is to provide advice to industry and to the government. 

Senator GALLACHER: Would they be remunerated? 

Ms Foreman: No, they will not be. 

Senator GALLACHER: Tell us about these annual awards. Is that like if a company picks up a number of 

veterans then they would be recognised publicly? 

Ms Foreman: That is under development at the moment, but I think the idea of the awards is for industry and 

the government to showcase examples of corporations that have been very effective at recruiting and retaining 

veterans, and to showcase how other corporations and industries could pick up and learn from those corporations 

that have done it successfully. It would also be a learning journey for the people who are on there, and for 

corporations in general. 

Senator GALLACHER: I am familiar some awards that there are in the disability sector. Is there a cost that 

goes into all of the advertising, administration and running of the event? 

Ms Foreman: That is before government at the moment. 

Senator GALLACHER: So you have put in some costings, but they have not been approved? 

Ms Foreman: It is before government. I probably cannot say much more than that. It is in a process currently 

before government. 

Senator GALLACHER: Basically, the department has done its work and it is waiting for an approval? 

Ms Foreman: Yes. It is part of the budget process, I think. 

Senator GALLACHER: So the reason we on this committee cannot be made aware of the amount is that it 

has not been approved? 


Senator GALLACHER: So on 2 May we will know—is it 2 May? 

Mr Lewis: The 8th. Senator, in May, feel free to ask again, and we will have more information for you. 

Senator GALLACHER: Part of the announcement included the establishment of an ESO industry 

partnership register. 

Ms Foreman: That is underway. We have sought expressions of interest and we have been receiving those, 

and we will shortly be placing information on our website in relation to that. 

Senator GALLACHER: Can you inform the committee how many you have signed up to date, or is that a 

question you need to take on notice? 

Mr Brown: We have received about a dozen expressions of interest for that partnership register to date. 

Senator GALLACHER: What is the process for an ESO wishing to register? Do they simply contact you and 

provide details? 


Mr Brown: There is an email address set up for that purpose. 

Ms Foreman: I would expect that, once we have the advisory council up and running, we will attract more 

interest as well. 

Mr Lewis: We may need to correct this on notice, but the information I am looking at suggests more than 40 

employers have registered for that. 

Mr Brown: It is 40 employers for the Industry Advisory Council, but a dozen ESOs— 

Mr Lewis: For the register. 

Senator GALLACHER: You have 40 employers. Is that publicly known yet? 

Ms Foreman: No, not at this stage, but I do not see there will be a problem releasing that information. We just 

need to confirm that with our minister. The purpose is for this to be— 

Senator GALLACHER: Well, we should be passing a round of acclamation to them. The sooner we know 

the better. 

Ms Foreman: I can tell you it is a wide cross-section of industry and different sized corporations as well. 

Senator GALLACHER: Just to return to budgetary measures, is there a cost to maintaining this register? Is it 

onerous on the department? Have you had to allocate significant resources? 



Ms Foreman: Not at this stage. At this stage we are seeking expressions of interest from people who wish to 

contribute to the initiative. 

Senator GALLACHER: Are any improvements being made to the vocational rehabilitation services as part 

of this announcement? There were a number of recommendations for improvement by the Australian National 

Audit Office last year. 

Ms Foreman: Is this in the rehabilitation space? 

Senator GALLACHER: Yes. 

Ms Foreman: Yes. We have been working hard in that space. 

Senator GALLACHER: Can you point to any improvements that have been made in the rehabilitation 

services area? 

Ms Foreman: Yes. As we discussed with you last time, there were a couple of recommendations that 

specifically related to the department. We have been working hard. One of the recommendations was in relation 

to Defence and in particular improving transition, because it has an impact on the wellbeing of veterans. We have 

a task force set up, a joint task force between DVA and Defence at the moment, and we have a number of 

research studies also underway in that area. 

Senator GALLACHER: Is the department working with the APS to develop a toolkit for veterans working in 

the APS? 

Ms Foreman: Yes, we are. When the Prime Minister announced it, this was primarily a program dealing with 

industry, but he acknowledged that there was a role for the Australian Public Service as well. One of those 

initiatives that I think you are referring to is the Department of Employment enhancing its jobactive website. That 

has already occurred. They have a page which lists specific information for veterans, and they have also created 

'Defence Force experience desirable' flags for jobs advertised on that website. As of yesterday, 59 advertisements 

on that website had a 'Defence Force experience desirable' flag on it. 

Senator GALLACHER: Employers are flagging their interest in picking up these people? 

Ms Foreman: That is right, and the Australian Public Service Commission has also advised that they will be 

launching an APS job website mid-year. That was also announced. That will help veterans apply for jobs in the 

APS, but it will also have a toolkit to help veterans work out what level they were at at Defence when they were 

discharged, what skillset they have and how that might correlate with jobs in the Australian Public Service to 

make it easier for them to make that transition. They will be able to see the sort of jobs that they might be able to 

transition to based on the skills that they have. That will be coming out mid-year. 

Senator GALLACHER: We know roughly how many people exit the Defence Force every year, and given 

my own sort of anecdotal knowledge most Defence people transition seamlessly into the economy. How big a 

pool of people are we talking about here? 

Ms Foreman: This measure targets both veterans who are medically discharged as well as those who were 

discharged by their own decision. We are actually targeting both of those. The skills the veterans have are skills 

that can be of use in the Australian public service. 

Senator GALLACHER: Absolutely—it would be sought after. Given that statement, is this in relation to 

people who are struggling to find work or is it just a generic solution to putting veterans seamlessly into work? 

Ms Foreman: It is both. If a veteran has an illness or an injury and receives compensation from us, they are 

eligible to go on a rehabilitation plan. Part of that rehabilitation plan looks at their medical treatment, another part 

looks at their psychosocial and interaction with the community and the third part of their rehabilitation plan looks 

at their vocational goals and aims. We can provide enhanced service, if you like, to veterans to whom we provide 

compensation. 

Senator GALLACHER: It is very early days yet, but how would you characterise this? Is this a normal, 

timely process, three months to set up the committee? 

Ms Foreman: Yes, especially given that we had Christmas and New Year in the middle of it. 

Senator ROBERTS: How many claims for compensation from Australian military veterans were rejected by 

DVA in the last 12 months, in last five years and in the last 10 years, and what are the percentages? 

Mr Orme: We will have to take that question and the detail on notice, but I highlighted to you earlier the 

number of decisions that were taken. For primary decisions, in 2015-16 there were 44,588 and in 2014-15 there 

were 48,711. So DVA make in the order of 50,000 primary decisions for establishing initial liability a year. On 

top of that, as we discussed previously, the secretary mentioned the nonliability health care. We now have two 



tracks. The key element is that, where liability is established, we provide treatment once a liability is determined. 

The second part of that phase is then determining the level of impairment and, if you like, compensation. In 

nonliability health care, we have people immediately into treatment upon calling the department and saying they 

have one of those five conditions mentioned previously. That is nonliability health care, where we separate the 

requirement for establishing liability and immediately get the veteran into treatment. 

Senator ROBERTS: Yes, I have talked with the department secretary and John Harris, and I met with the 

minister during the break, and we are going to do something to help publicise that tomorrow or the next day. 

Mr Lewis: If I could say one thing about the question you have asked, though: we have said we can take it on 

notice, but you have mentioned going back five or 10 years and I am not sure our system is going to be good 

enough to give you what you want. But we will take it on notice and see what is available. 

Senator ROBERTS: Thank you. This will be on notice too: how many of these rejections have subsequently 

ended up being dragged through court? 

Mr Orme: That is an interesting characterisation, and I understand where you are coming from. The decision 

to reject a claim would be because the delegate does not have sufficient evidence in front of them to support the 

contention that is being made. Under the beneficial legislation we have our delegates look around to find a way to 

say, 'Do we have enough information to support the contention?' 

If there is not sufficient information in front of the delegate to support a decision that says, 'Yes, we accept 

liability,' the claim is rejected. The veteran then has the opportunity to appeal that decision through the Veterans' 

Review Board or the Administrative Appeals Tribunal. That goes back to those decisions I mentioned. The 

number of decisions in the year 2015-16 that went to appeal was 5,543 of the 44,588, or 12.4 per cent. 

Senator ROBERTS: Are there court cases involving these matters? 

Mr Orme: The first level of appeal is an internal review within the department, but the principal ones are 

reviews by the Veterans' Review Board. The Veterans' Review Board is a board that has been established for the 

purpose of resolving issues with veterans' claims. It is designed for the veterans, not as a legal process. In the last 

18 months, they have introduced alternative dispute resolution, and we have found that to be very successful. The 

members of the Veterans' Review Board sit down and conference with advocates and clients to talk through issues 

and identify areas where a decision might not be supported and what further evidence what might be required. In 

that process, we and the Veterans' Review Board have identified that they are able to engage in a dialogue which 

brings out the requirement for the information and allows the advocate or the veteran to identify that further 

information. 

Senator ROBERTS: I accept that some cases need more or adequate information, but are there claims 

currently in court? 

Mr Orme: Now I will step to Ms Spiers to go through the next level, which is appeal to the AAT 

Ms Spiers: I have got the court figures and I have got the Administrative Appeals Tribunal figures. Would 

you like me to do both? 

Senator ROBERTS: Yes, please. 

Ms Spiers: The Administrative Appeals Tribunal is the next merits review stage that people can undertake. In 

the 2015-16 financial year, the AAT had 195 VEA applications made, 155 Safety, Rehabilitation and 

Compensation Act appeals made and 97 Military Rehabilitation and Compensation Act claims made. I can do 

half-year to date for the current period as well. It was, for the VEA; for the SRCA, 68; and, for MRCA, 63. So the 

numbers are quite small compared to the ones that Mr Orme started with. 

We then have a number of matters that do go on to the court process. They go to the court process on a point of 

law only, so it is not a merits— 

Senator ROBERTS: On a point of— 

Ms Spiers: It is a point of law. Regardless of the individual facts of the case—the merits of the case, for which 

the last level of merit review is the AAT—it could go to the court system on a point of law that, in essence, the 

tribunal misapplied the law. That is really what the test is about. So we have in the 2015-16 financial year two 

cases that went to the Federal Circuit Court, four cases that went to the Federal Court, three that went to the full 

Federal Court and one that went to the High Court, for a total of 10. In the half-year to date—from 31 December 

2016—we had a total of four cases to the court structure, three to the Federal Court and one to the full Federal 

Court. I can give you outcomes as well if you wish. 

Senator KITCHING: Who was the plaintiff in the High Court case? 



Ms Spiers: The High Court case in the particular matter in 2015-2016 was actually the Repatriation 

Commission of the department. 

Senator KITCHING: I just thought it would be someone who could afford to take the decision to the High 

Court. 

Ms Spiers: In the particular case involved, it was a very significant point of law that not only impacted— 

Senator KITCHING: I am sure it was. It obviously would have had to have been in order to make it to the 

High Court. What I am asking is who the applicant is. 

Ms Spiers: I am getting there. Because it was such a significant point of law and it not only impacted on 

DVA's compensation process but had the potential to impact on Comcare processing and workers compensation 

across the jurisdictions, the department actually agreed to pay the court costs of the individual. So we wore both 

costs because the important issue here was to actually get the highest court in the land to give us a decisive 

decision on this particular area of the law. 

Senator ROBERTS: Thank you. I am impressed with the fact that you have got the figures. This might be a 

very difficult question to answer. How long does it take the average veteran whose claim is not immediately 

accepted, to get their just compensation? 

Ms Spiers: That is a very loaded question because the aim of the whole DVA system is to give everybody 

their lawful entitlements at the earliest opportunity. As Mr Orme said, often what is missing when a person has to 

appeal to a second or third merits review tribunal is the evidence, or we have to gather the evidence. The aim 

always is for the department to make the best, correct and preferable decision as soon as possible. In fact, at the 

Administrative Appeals Tribunal the onus is on the department, when it is there, to assist the tribunal to make the 

correct or preferable decision. It is not a litigious system in the sense of winning at all costs; it is all about 

assisting the tribunal to come to the best decision. 

I suppose the other aspect to all of this is that, when you look at the AAT appeals, the majority of those appeals 

are lodged by the veteran community, not by the department. In fact, even most of the federal court matters have 

been appeals lodged by, in the first instance, the individual veterans, not the department. 

Senator ROBERTS: That is what I would have guessed and staff would have guessed as well. How much 

money has DVA spent on lawyers and legal action in the last year and also over the last 10 years? 

Ms Spiers: I can answer the question about the last full financial year and half-year to date for you. Over the 

last 10 years I would have to take on notice. 

Senator ROBERTS: Okay. 

Ms Spiers: In terms of half-year to date: we break this up as we are required to under the legal services 

direction, because we have to report this annually to the Office of Legal Services Coordination. External legal 

costs expenditure half-year to date is $3,626,593.03. I am not sure about the 3c though! 

Senator ROBERTS: I wonder where it got to! 

Ms Spiers: And the internal legal costs for the same period is $1,173,365. As to the full-year cost for the last 

financial year, the figures are, for external legal costs, $8,160,959.14; and, for internal legal costs, $2,464,055. I 

hasten to say that that legal expenditure cannot be attributed to defending or appearing on cases; it is actually the 

total cost of my branch running, and we do some litigation work but also do a lot of in-house legal advising work, 

privacy and FOI. We do legislation. We draft legislative instruments in-house. So a lot of that internal cost is the 

staff that do all of that work. 

Senator ROBERTS: So the drafting is included in that. 

Ms Spiers: For legislative instruments, that is correct. As for legislation: the drafting of that is all done 

externally by the Office of Parliamentary Counsel, so that is not a cost there. In terms of the external legal costs: I 

have not got a breakdown here, but I will often seek an external legal opinion on a particular issue. Yes, some of 

those costs are to do with AAT work and Federal Court work, but you could not actually attribute all of those 

costs. 

As I said, will have to take the 10-year data on notice; I have not got that here. 

Senator ROBERTS: Isn't it true that it took the last survivor of the 1964 sinking of the HMAS Voyager 

around 40 years to get compensation? 

Ms Spiers: Can I give you a bit of context for that? 

Senator ROBERTS: Sure. 



Ms Spiers: Voyager people have a peacetime period of service in the sixties which is not covered by the 

Veterans' Entitlements Act. It is covered by the precursor to the Safety, Rehabilitation and Compensation Act. 

Senator ROBERTS: What is that predecessor? 

Ms Spiers: It is the Commonwealth employees workers compensation act. It is the 1971 act. I do not have the 

title of the act in my head anymore. But the key to this is that, while the '71 act and the 1930 act that were before 

that could allow for the acceptance of psychological conditions—and I think the case you might be referring to 

would have been PTSD—those acts excluded lump sum compensation payments. So for an individual that 

survived Voyager, if that was their only service, they actually would not seek compensation from Veterans' 

Affairs; they would actually sue their employer, which is Defence. So I think the matter you were referring to 

would have been a claim against Defence, and it would be better placed to ask them about the details. 

Senator ROBERTS: How many current and former members of the Australian military have committed 

suicide in the last year? 

Mr Lewis: The first thing to be said is we would not necessarily know. We know of some suicides but the 

reality in the world of veterans' affairs is that, until last year, four out of five people left the ADF and were 

unknown to the Department of Veterans Affairs. So for decades people served in the defence forces, left, and 

unless they lodged a claim with DVA, were unknown to the department. We have fixed that. We fixed that last 

year. So last year, for the first time, we know about all 5,500 thereabouts that left the ADF. The same will 

continue into the future. But in the past, we did not know. So we know about that subset of veterans who are 

clients of the department but we do not have information in relation to those who were not clients of the 

department once they left the ADF. 

Senator ROBERTS: It is understood in the community that the number of suicides last year was greater than 

the death toll from combat over the 14-year Afghan conflict. Is that correct? 

Mr Lewis: That figure is not correct. I am sorry, the study we had done through the Australian Institute of 

Health and Welfare and the results of that were put out, I think, in November last year. They were preliminary 

results. There will be final results due towards the middle of this year that do give updated numbers on suicide, 

but I think it went to 2014 so let's provide what we can. 

Ms Campion: Particularly for death by suicide, we actually need a finding by coroner as to the cause of death 

and that can take some time. So we do not have data for 2015 or 2016 yet through the causes of death reports that 

are produced by the Australian Bureau of Statistics. The most up-to-date data we have is to 2014. 

The Australian Institute of Health and Welfare has looked at data of those serving on or from 1 January 2001 

and deaths by suicide of that cohort up until 2014. They found that there were 292 certified deaths by suicide in 

that time period—as I said, deaths that have been confirmed as being by suicide by a coroner. Of those 292 

deaths, 84 occurred among those who were serving full-time in the ADF, 66 were amongst those who were in the 

reserves and 142 occurred in the ex-serving population. 

Mr Lewis: If you look at those results, you see there is also a particular problem cohort, which is the 18 to 24- 

year-old males, which is already a significantly at risk cohort in the Australian community but the risk is double if 

you are a former serving ADF member so we are really drifting down to understand what that data is telling us 

and what we need to change in the way in which young folk that come into the ADF intending to serve but for 

whatever reason leave the ADF quite early. It is obviously a real problem area. It is a focus for us so we are 

working with Defence in relation to our transition processes generally but we also looking very particularly at that 

cohort. We have also asked the Strain Institute of Health and Welfare to try and obtain as much further data as we 

can about that cohort—what portion of them, for example, were medical discharges and what portion were clients 

of the Department of Veterans Affairs—so we have those results as well when the final report comes out. 

Senator Payne: Chair, may I just say to Senator Roberts: everybody here—the Defence Organisation and the 

Department of Veterans' Affairs—we all know that one death by suicide in the veteran community or by a serving 

member of the ADF is one too many. A lot of the discussions that have been had here tonight in a very 

constructive way are about endeavours that are being made between Defence and between Veterans' Affairs to 

address those very significant concerns. There is still more to do, I acknowledge that, but in recent times we have 

made significant endeavours to make progress in that regard. I appreciate the engagement and the attention of the 

committee to these issues. I take it very, very seriously. If we can assist members in any way with the work that 

they are doing, then we will continue to do so. Obviously, we have made submissions from Defence—and I am 

here tonight representing the Minister for Veterans' Affairs—to the inquiries of the references committee. If there 

is more information that we can provide that will assist you in your thinking around this, then we are of course 

very willing to do that. 



Senator ROBERTS: Thank you. Chair, I just want to comment that out of respect I will not ask any more 

questions. Could I just put them on notice, please? I very much appreciated the secretary, when I approached him, 

taking me into his confidence and introducing me to the minister. We will address issue that we have raised. I also 

want to make the comment that I appreciate that you have been frank about saying that in the past things were not 

done to a standard that you were happy with, but things appear to be changing. And I realise that cannot be done 

overnight. So I am encouraged. Thank you very much. 

Senator LUDLAM: Just briefly, I want to follow-up on some stuff that I have been asking about for a couple 

of years. Who is in the room who can tell us about Australian service personnel who were exposed to radiation 

from British nuclear weapons testing? 

Ms Foreman: Hello, Senator. 

Senator LUDLAM: Welcome back. You would no doubt be aware that, unlike other veterans who receive the 

gold card for health care automatically upon reaching 70 years, because many nuclear veterans are not recognised 

as having served in combat they have slipped through the net somewhat. A couple of years ago, Treasury did a 

costing of how much it would cost the Commonwealth for those remaining personnel to be given automatic gold 

card entitlement. That was a while ago. We had the PBO do a costing a little while later. I am interested to know 

whether you have a figure at hand that would tell us how many of these nuclear-exposed servicemen and women 

are still alive today? 

Ms Foreman: Are we talking about the veteran community here who were exposed? 

Senator LUDLAM: That is right. I will cast my net a little broader in a moment, but just to start with 

veterans. 

Ms Foreman: At the moment, we understand there are 1,385 veterans. 

Senator LUDLAM: Thank you for having that to hand, I appreciate it. Surviving family members? 

Ms Foreman: No. I do not think we would know how to capture that information. 

Senator LUDLAM: Understood. I would appreciate this, if it is your bailiwick—in fact, I am almost certain it 

is not—but how would I find out how many Aboriginal people were exposed to those same tests? Who is tracking 

them? 

Ms Foreman: I cannot answer that question, I am sorry. 

Senator LUDLAM: Understood. I know it is not your bailiwick. It might have been nice to know. 

Ms Foreman: I am trying to think whether the ABS would keep something like that, or whether it would be 

the Indigenous communities themselves, actually. 

Senator LUDLAM: I will try. Do you also have a similar number for those Australian personnel who were 

stationed in or around Hiroshima and Nagasaki during the occupation? 

Ms Foreman: No, I do not. We might need to get that from Defence. They might have that information. We 

will take that on notice anyway. 

Senator LUDLAM: Yes, if you could. There is a fair bit of collaboration, advocacy and mutual support, I 

guess, between those two cohorts? 

Ms Foreman: Do you mean the British Commonwealth officers, Senator? 

Senator LUDLAM: No, Australians who were stationed in Hiroshima and Nagasaki immediately after the 

bombing. 

Ms Foreman: I know what you are talking about. Yes, we do have that number. I have that here. 

Senator LUDLAM: That is brilliant. 

Ms Foreman: That number is 1,200. These were the people who went in after the nuclear bombs and did the 

clean-up work. Yes, it is 1,200. 

Senator LUDLAM: Brilliant. 

CHAIR: Still alive? 


Senator LUDLAM: This is going to seem a little macabre but, obviously, in the context of a discussion about 

compensation: what is the rate of attrition every year for these individuals? 

Ms Foreman: I can give you the forecast for how many we think will be alive next year, which is based on 

information we got from our statistical people who specialise in being able to do this. 



Senator LUDLAM: I would appreciate that. If you have documents to hand, could you table those, because I 

know the committee is a bit short on time. 

Ms Foreman: Yes, that is fine. I can read them out now or I can table them at the end. 

Senator LUDLAM: Let's do both. 

Ms Foreman: Read them out now? 

Senator LUDLAM: If you like, just for those two. 

Ms Foreman: There are 1,300 British nuclear test veterans this year, and we estimate there will be 1,100 next 

year, 1,000 in 2019 and 900 in 2020. 

Senator LUDLAM: Thank you. 

Ms Foreman: And BCOF, as well—did you want those stats? 

Senator LUDLAM: Go ahead. 

Ms Foreman: As I said, there are 1,200 in 2017, and there is likely to be 1,000 in 2018, 800 in 2019 and 600 

in 2020. 

Senator LUDLAM: I recognise that you might need to throw this to the minister if this is considered a policy 

question, but is there any chance, while there are still some of these people left, that we could just hook them up 

to an automatic gold card entitlement? 

Ms Foreman: That is probably not a question I can answer at this stage. 

Senator Payne: I do not have any advice on that, but I will take it on notice. 

Senator LUDLAM: If you could, I would greatly appreciate it. Do you have any figures on how many of 

these individuals might already have a gold card entitlement? I do not know that we have ever seen that before. 

Ms Foreman: I do not think that we do. Can I take that on notice. Some of them would have, but not from 

their British nuclear test experience but from their service elsewhere. 

Senator LUDLAM: I am not sure we have ever been able to establish what proportion of those people— 

Ms Foreman: No, I do not have that figure on me, but I will see if I can get it. 

Senator LUDLAM: I appreciate it, and Senator Payne has undertaken to find out if there is anything in the 

works. 

Senator Payne: There are qualifying service issues. You have discussed those before. 

Senator LUDLAM: Many times. 

Senator Payne: Again, I am always happy to help the committee. I will take it up with the minister. 

Senator LUDLAM: It is not the committee we need to help; it is these people. I feel like they have been 

abandoned, so anything you can come back with would be much appreciated. 

Senator Payne: I will take it up with the minister. 

Senator LUDLAM: Thanks. 

Senator GALLACHER: Just one observation on the recording of suicides: I have some interaction with the 

superannuation fund, and I presume everyone in Defence is now in a superannuation fund, and the death 

payments that are paid out are an easily accessible resource for knowing who got what and how they died. Do you 

interact with the superannuation fund? 

Mr Lewis: We do. 

Senator GALLACHER: Are those statistics not easily available? Why do you have to wait for a coronial 

inquest when we are paying out, on a regular basis, people's superannuation accounts, because their dependants 

need the money? 

Ms Campion: Part of the work that the Australian Institute of Health and Welfare originally undertook when 

they were looking at the issue of suicides was to try to use the ComSuper data, but we might have to take it on 

notice to give you the details because I cannot quite recall— 

Senator GALLACHER: I would appreciate it if you would, because— 

Ms Campion: There were some technical details and issues about how they could match the ComSuper data 

with Defence. 

Senator GALLACHER: I know of another industry that has a horrendous record of suicides, and they have 

that data from the superannuation fund that represents that industry. 



Mr Lewis: You have reminded me that there was an issue there because that was the first way we tried to use 

this as a way of tracking these things. We will take it on notice and give you a proper answer. 

Senator GALLACHER: Thank you. I just wanted to go to—oh, it is a political issue. All that goodwill is 

evaporating now. 

Senator Payne: That is disappointing, Senator. 

Senator GALLACHER: Minister Tehan announced the latest round of grants for the ex-service organisations 

for their community projects—some $500,000 went to 33 recipients. How are we going with the applications for 

the next round? How many applications have you got in for those? 

Mr Lewis: We have several grant programs; which one are you talking about? 

Senator GALLACHER: Veteran and Community Grants, which was announced on 27 January 2017. What is 

the process? 

Mr Lewis: I will ask Ms Vardos to assist, but it will be in relation to grants that have been announced rather 

than grants that have been considered. 

Senator GALLACHER: I have some detail on the grants that have been announced. Apparently there is a 

break-up nationally. Can someone just walk us through the process? You get an application, and then what 

happens? 

Ms Vardos: Yes. The Veteran and Community Grants program is a rolling grants program. It has roughly four 

rounds per annum. Applications are received, and, once we reach a certain number of applications or a certain 

amount, we then bundle them up, analyse them and make recommendations for which ones should go ahead for 

approval. The rounds are rolling, and they do not actually have set dates. 

Senator GALLACHER: Do you send up approval recommendations for the amount of money you have got, 

or do you send out 10, and someone makes a decision? 

Ms Vardos: Generally we make up recommendations to the minister for what the organisations have asked 

for. However, towards the end of the financial year, there may not be sufficient funds in the grants programs, and 

at that point either we will make a decision to do partial funding, which is generally unusual, or we will hold 

those grants over into the next financial year for full funding. 

Senator GALLACHER: Clearly the minister needs to approve the grant. 

Ms Vardos: Correct. 

Senator GALLACHER: What I am trying to ask is: does he get 20 grants and have to approve five of the 20? 

Or does he get 20 and— 

Ms Vardos: No, what we do is we bundle them up. All the grants that are received go up to the minister for 

his assessment and approval. The department makes recommendations, and it will make those recommendations 

in line with the program guidelines. Generally, if an organisation does not meet the guidelines, it will not go up in 

the brief, and the department will work with that organisation to make sure that its submission is in line with the 

guidelines. 

Senator GALLACHER: But there is not a pool of 20 approved grants and only five amounts of money? 

Ms Vardos: No. 

Senator GALLACHER: There is a statistical anomaly here that indicates that 66.2 per cent of the funding 

went to LNP seats and only 27.8 per cent went to ALP seats and six per cent went to Independent seats. You are 

saying that there is no discretion there for the minister to— 

Ms Vardos: No. 

Ms Foreman: We put up recommendations to the minister, and electorates are not one of the criteria that we 

look at. It is based on the ability of the project to address the health and wellbeing and social isolation that 

veterans face—to address that— 

Senator GALLACHER: I know electorates are not your criteria, but someone has spent an enormous amount 

of time putting these grants into electorates. 

Ms Vardos: The department reports on the electorates. There is a process where, if a grants falls in the 

minister's electorate, it has a separate process to ensure integrity. 

Senator GALLACHER: So, if there is a conflict of interest, it is approved by someone else? 

Ms Vardos: Yes. It is all managed. 



Senator GALLACHER: So the department simply assessed all of these projects. For the ones that have met 

the criteria, you have applied some scrutiny and due diligence to it, and you have recommended them up. Only 33 

projects went out for the $500,000; is that how it went? 

Ms Vardos: In that particular round. The department receives for this program, I think, anywhere between 

100 and 200—I would have to take the exact number on notice—and the majority of the applicants actually get 

their grants up. It is very rare, in this program, not to have them up. Where there are concerns that their grant 

applications do not meet the guidelines for the program, we will work with those organisations to make sure that 

their grants are in line so that they can be accepted in the next round. The figures that you are talking about, I 

suspect, are in relation to that particular round, but there will be other rounds. As I mentioned, there are generally 

four, but it could be up to six rounds per annum, depending on the year. 

Senator GALLACHER: What you are telling me is that this is all done according to the rules of the grant; 

the checking is all diligent; and the result is the result. If someone wants to put it into electorates and say it has 

favoured— 

Mr Lewis: We are working for veterans all around the country, irrespective of electorate. 

Senator GALLACHER: Thank you. I do remember a grant that was in— 

Mr Lewis: The Anzac Centenary grants are a classic, with $125,000 per electorate. 

Senator GALLACHER: We will not pursue that any further. This next question probably needs to be taken 

on notice. The government made a number of election commitments prior to the 2016 federal election. Can the 

department provide a breakdown, on notice, of the government's election commitments, including any deadlines 

for delivery and the legislated requirements that will be necessitated by way of either regulation or legislation to 

implement those election commitments? 

Mr Lewis: Certainly. 

Senator GALLACHER: I am advised here that you have probably had some practice with that because 

Senator Ronaldson asked for it when he was in opposition. So there might be a template there somewhere. 

Mr Lewis: We are happy to assist. 

Senator GALLACHER: Also, can the department advise which of these commitments have been met and 

which have not; what financial impacts these have had, or will have; and whether there are any commitments, in 

the department's view, which are unattainable by way of budgetary requirements or legislation/regulatory 

provisions. 

Senator Payne: I am not sure the department will provide an opinion as such on that, Senator, but— 

Senator GALLACHER: I am sure we will get an appropriate response on those. 

Senator Payne: the department will respond as best as they can. 

Senator GALLACHER: Thank you. I want to go to the issue of the VAN—the Veterans' Access Network— 

offices. 

Mr Lewis: Yes. So— 

Senator GALLACHER: How is that process going? Are there going to be closures? We have discussed this 

at earlier estimates. Is the department aware of any closures of the current VANs? 

Mr Lewis: I do not think we have closed a Veterans' Access Network office for some time, so far as I am 

aware. In fact I can state with confidence there are no plans for closure of any offices. 

Senator GALLACHER: I have a list of— 

Mr Lewis: We probably have the list ourselves. 

Senator GALLACHER: Newcastle, Lismore, Maroochydore, Woden, Launceston, Townsville, Broadbeach, 

Darwin, Wodonga, Parramatta, Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart—all of those are all 

current? 

Mr Lewis: Yes. If you read out 16 placenames there, that would be right. 

Senator GALLACHER: Are any of the offices merging with Centrelink over the next 12 months? 

Mr Lewis: No. 

Senator GALLACHER: That is not happening? Anything planned to move frontline veterans services into 

DHS? 



Ms Cosson: We already have some of our DVA staff in DHS shopfronts now. I did a bit of research on this 

after the last estimates. We have 16 VAN shopfronts. Five of them are co-located with the Department of Human 

Services, and, in 33 locations, DHS actually provides services on our behalf. 

Mr Gerrick: Yes. 

Ms Cosson: We also have other agents who provide our services in a number of states such as Tasmania, 

Queensland and WA. So there is a range of delivery arrangements for face-to-face services to our veterans. 

Senator GALLACHER: How are the five that have been merged going? I know there was contention about 

merging in the earlier rounds of estimates. 

Mr Orme: Geelong is the best example, I think. Mr Gerrick will probably go further into it, but it has been a 

highly successful merger and an improved delivery of services to veterans in the Geelong area. 

Mr Gerrick: Yes, I concur with the comments that the deputy president has just made. I oversaw particularly 

the Geelong exercise in 2015, and I think that went extremely well. Certainly from my perspective there have 

been no issues that have been raised, in connection with that, that have come to my attention—during that period. 

Senator GALLACHER: So five have been merged, and your evidence is that they are all going swimmingly 

well? 

Mr Orme: Yes. But, of course, the face-to-face services around Australia—there are more DHS offices in 

regional Australia than there are VANs, and, for regional veterans, getting access to face-to-face services through 

those sorts of opportunities is a positive. 

Senator GALLACHER: Can I go to the DART communication strategy and information sharing. 

Mr Lewis: Certainly. 

Senator GALLACHER: Sorry for jumping around. I do not know who does what. In October, the 

department advised that the communication strategy to inform survivors of abuse of the support and services 

available to them had been drafted and was waiting on endorsement from the Military Rehabilitation and 

Compensation Commission. Has this now been released? 

Ms Foreman: Yes, it has. 

Senator GALLACHER: When was it released? 

Ms Foreman: It has been agreed to by the commissions, and I am happy to take you through the components 

of the strategy. 

Mr Lewis: There were three phases in the communication strategy, and Ms Foreman is happy to take you 

through the three stages. Basically, we are almost through the second stage, and the third stage is to come. 


Senator GALLACHER: So it has been drafted and endorsed? 

Mr Lewis: We have done the first stage. The second stage is on the way and the third stage is coming. 

Senator GALLACHER: Has it been released? That is the question. 

Ms Foreman: Yes. We have had discussions with a number of people about this matter at the ESO Round 

Table and also with a number of senators. But the first stage is that we have looked at claims that were held in 

abeyance or rejected after 2012, and we have gone back to those claimants to see whether they would like their 

claims reconsidered and to see whether those claims are able to be successful under the new arrangements that we 

have. The second phase is the communications, where we have gone out through our social media, letters to 

ESOs, law firms, medical practitioners, health specialists and letters to the editor to advise of the new 

arrangements that we have—both the policy changes that I outlined last estimates and the procedural changes. 

The third phase is a broader communication strategy, which is focusing on more rural and remote areas—people 

who might not have become aware through the other elements of the communications strategy about the 

changes—where we are going to encourage them to come forward, and that will be a broader communication 

strategy. 

Senator GALLACHER: How would you characterise the time it has taken to get to this stage? Has that been 

efficient or has there been a delay? What was the reason it took so long? 

Ms Foreman: No. The commission endorsed a new policy, I think, in September or October late last year, and 

we went back to commissions with a strategy earlier this year, but we started on the strategy prior to endorsement 

because the first phase had been agreed by commissions earlier, which was that we would look at claims held in 

abeyance and claims for abuse that were rejected since 2012. 



Ms Spiers: It was also important that, once the policy had been agreed to by the Repatriation Commission and 

the Military Rehabilitation and Compensation Commission, we actually trained the relevant staff members in that 

policy to ensure effective rollout of the policy from day dot, and, as Ms Foreman, said the focus then was on the 

claims that we had held that we could actually process. It would have been slightly disastrous to go out with a 

large communication strategy from day dot if we did not have the capacity to do that surge work, and that is why 

we worked on the claims we currently held. 

Senator GALLACHER: What date was the communication strategy completed and sent for approval? 

Ms Foreman: It was in February this year, I think, we went to commissions. 

Mr Brown: The communication strategy was considered by commissions on 2 February this year. 

Senator GALLACHER: Is that consistent with the earlier position that in October you informed us that the 

communication strategy had been drafted and was waiting on endorsement? 

Ms Foreman: Yes. We were drafting it last estimates when we spoke with you. And as I just mentioned 

earlier— 

Senator GALLACHER: I said 'had been drafted', so you are saying it was a work in progress in October? 

Ms Foreman: We had a fair idea of the three elements of the strategy, but we had to put the commission's 

submission together, and we started on it as soon as we could, as I said. 

Senator GALLACHER: So the date that it was formally completed and sent to the Military Rehabilitation 

and Compensation Commission was 2 February? 

Ms Foreman: That is right. That is the date I also— 

Senator GALLACHER: So there was no delay on their part that that has happened? 

Ms Foreman: The paper would have gone to them a few weeks ago, and that was the date of the meeting. 

Mr Lewis: The meeting was on 2 February. Then the paper would have been finished sometime prior to that. 

Ms Foreman: That is right, in January. That is what I was—yes, in January we got the paper finalised. 

Senator GALLACHER: What process involves the minister? Is any of this process involve the minister, or 

that— 

Ms Foreman: We certainly brief the minister on the Military Rehabilitation and Compensation Commission's 

decision. We briefed, and I would have had discussions with the office, about what we were proposing as well. 

But we certainly formally briefed the minister after the commission had considered the strategy. 

Ms Spiers: Clearly, the minister and his office were giving feedback to us about the suitability of that strategy. 

Senator GALLACHER: So from the department's perspective, there was no delay in this process. 

Ms Foreman: No. 

Senator GALLACHER: Over the course of the data investigation, you have said that a considerable amount 

of information was obtained relating to individual cases. Whilst the matrix used by data is different to the one 

utilised by DVA, can you itemise what assistance will be provided to those individuals who may be eligible for 

claims? You started to go through that before—about contacting people. 

Ms Foreman: Certainly; we have been contacting people whose claims are in abeyance or whose were 

rejected, to see—we have a specialist team in Melbourne that does this work— 

Senator GALLACHER: How many people are in that? 

Ms Foreman: I will just ask Mr Geary to respond to that specific question. 

Mr Geary: We have a dedicated team in Melbourne. We consolidated this work a number of years ago—I 

think it was about 2012. We have up to six assessors, depending on the workload, working on these cases. They 

are senior assessors who are experienced across all acts. They are our best and most senior people that do this 

type of work. We have a dedicated social worker who works with the group, who came from an abuse work 

history background. We have a doctor allocated to the team for any medical assistance. We case-conference all 

the cases as they come in with the social worker, doctor, et cetera. The social worker does phone interviews to 

assess risk and referral for other assistance. We talk to people, of course, about non-liability health care. If it is an 

accept, the work goes through relatively smoothly. If it looks like the case will be rejected, we have a second look 

at it internally with, again, the experienced team plus the team leaders. We then, if it looks like that is a reject, we 

sent it off and up to national office to have a look at it. 

Senator GALLACHER: Can I just ask you in relation to that team—they are obviously not allocated. The 

workload determines how many people are on the job. Is that how it works? 



Mr Geary: It is a complex assessment team. The mefloquine cases we talked about earlier also go in there. 

Also cases across three acts with a lot of conditions on the one claim—so we might get a claim for 15 conditions. 

Senator GALLACHER: It is a specialist unit that can handle the volume of work? 

Mr Geary: Absolutely; yes. 

Ms Foreman: They have also received training from Phoenix Australia recently in relation to dealing with 

people who have suffered abuse and also on what the cycle of abuse looks like and how that can influence the 

behaviour. 

Senator GALLACHER: Just jumping around again—we have taken evidence on this committee that there is 

maybe an impending lack or shortage of advocates. New advocacy training and development programs—can 

somebody talk to us about that? 

Ms Foreman: Yes; I will ask Ms Vardos to come back as well. 

Ms Vardos: The ATDP started on 1 July 2016 and it has been running for almost a year. It has been going 

through the process of implementing accredited training and making sure that it is nationally consistent. In 

addition to that, it has also introduced a regional management structure. The purpose of that structure is to 

coordinate training needs in the regions as well as understand what the need for advocacy services are and making 

sure that there is an appropriate number of trained advocates in each region. 

Senator GALLACHER: Can you specifically outline any support being offered to ESOs in regional areas to 

attend training? 

Ms Vardos: Training courses are being made available. The department started rolling out training courses 

last year for people to be accredited at the level 2 level of advocacy training for compensation. The reason those 

courses were offered at that level is that that is where the bulk of the work is done in the system, and we plan to 

roll courses out for other levels of advocacy—those being one, two and three—later this year. At this point we 

have had a number of different advocates. There are 100 advocates who have gone through stage 1 and 

commenced as new advocates, and there are also 100 who have done the RPL2. Most of those, at this stage, have 

been in main city areas, for the courses, and the chairs of the regional management bodies are determining what 

the needs are in each of those regions. Advocates have been asked to register, on the online management system, 

their interest in attending courses, so that we can gauge the interest, so we know where to run the courses. That is 

not to say that courses would not be run in regional areas; we are still just in the process of establishing the 

interest through the regional managers. 

Senator GALLACHER: Do you know how many registered training organisations would offer the course? 

Ms Vardos: The department has a relationship with major training services to deliver the training, and part of 

that work with the ATDP is to train a set number of assessors. So they would be very senior advocates that would 

have the responsibility of helping to RPL, or register prior learning, and transition people and do the paperwork 

for them to do that. The courses have to be accredited by the ASQA, which is the Australian Skills Quality 

Authority, and the department is just about to obtain that qualification. So the courses will roll out with that, with 

the assessors working under that framework to assess people. 

Senator GALLACHER: How does an advocate access the training? 

Ms Vardos: The regional manager's role is to promote the advocacy training and the transition from the old 

training system to the new one, and they have connections with ESOs in their communities, so their job is to 

promote that. The department also works with, along with the ATDP—so the Advocacy Training and 

Development Program—governance structure to promote the scheme to ESOs, and we give information to a 

variety of committees. The ESO round table is one of them, as well as the younger veterans' forum. There are 

communications that go out from the committee as well as the department. It is also a partnership, so the 

department does a lot of the work as well as the ESO community, and we also do work with Defence to promote 

it. 

Senator GALLACHER: So you have had this program going for 12 months? 

Ms Vardos: Correct—almost 12 months. 

Ms Foreman: I was going to say: 1 July 2016 we started. 

Senator GALLACHER: So what issues are being raised, or have any issues been raised, about access to 

training for advocates? 

Ms Vardos: Are you talking about training for the ATDP courses? 



Senator GALLACHER: Yes. So, basically, simplistically, you are trying to improve the training of 

advocates and the number of advocates? 

Ms Vardos: Correct. 

Senator GALLACHER: So has there been any issue raised with you about access to the training? 

Ms Vardos: Not in terms of access to the training. There are a lot of people who are registered on the waiting 

list, and we are trying to determine the need to run the courses within each region, and it is simply a matter of 

people accessing it. Originally, when the department ran a number of trials or pilots of the training to see how it 

would work, particular for the RPL process, there was some concern raised by advocates about why they were not 

selected on the pilots, but you could only have a certain amount and the people chosen to go on those pilots were 

chosen by the regional managers of the ATDP. 

Senator GALLACHER: Are there any plans to help ESOs in regional areas with increased costs of travel? Is 

that an issue? 

Ms Vardos: Similar to under the previous training program, ESOs are required to cover all the travel costs 

themselves, and the department pays the cost of the training. That is the same approach that there was under the 

previous program. 

Senator GALLACHER: So if they do incur costs because they are trying to get advocates in the country, it is 

their cost not yours? 

Ms Vardos: That is correct, and it is consistent with the old program. But, additionally, we will be looking to 

run courses where there is a need for people to undertake advocacy training. 

Senator GALLACHER: Just on access to specialised treatment in rural and regional areas: I do not know if 

we are still talking to the same people, but does the department actively monitor what services are available to 

identify any gaps in providers or treatments in regional and rural areas? 

Mr Lewis: It is more likely to be Ms Campion. 

Ms Campion: The way we become aware—because we do not contract with specialists or other providers, 

other than hospitals—is: we rely on those who are registered with Medicare and have a Medicare number. We 

obviously do not have a way of monitoring where they are providing services. The way we become aware that 

there may be access gaps is through providers or clients making contact with us because they are having difficulty 

accessing the services in their local area. Then we go through our arrangements to try to find them a provider who 

is nearby who will participate in our arrangements. If that is not possible then we have arrangements for people to 

travel to enable them to access treatment. There are other sorts of things we can do to provide access to services. 

Senator GALLACHER: I will just go through that. If someone notifies the department that they need some 

treatment and no-one appears to be able to provide it, you will have a look to see if there is a solution. If not, you 

will assist them to travel. 

Ms Campion: Yes, that is right. 

Senator GALLACHER: How often do you review that? Are there particular areas where there are 

shortcomings? 

Ms Campion: It depends on the specialty as well. There are a range of issues that can arise there. We do not 

necessarily have a time of year when we do a formal review but we are always looking to what the trends are in 

terms of requests we get for assistance. 

Senator GALLACHER: So you do not have a list of all of the providers in each state? 

Ms Campion: No, we do not. As you can appreciate, there are thousands out there so it is very difficult for 

us— 

Senator GALLACHER: I know, but they all want to practise in the city. That is the problem. 

Ms Campion: They do. 

Senator GALLACHER: When we encourage people to go into rural areas they only do their time and move 

on. Is there anything you are doing—I know a lot of health departments are doing this—to encourage providers to 

extend services into regional areas? Is there any involvement from the department in encouraging people to 

provide services and meet the gaps? 

Ms Campion: I am not aware of any specific initiatives. I might have to take that on notice. As you 

mentioned, the health department has a range of programs to encourage people to train and work in rural areas, 

but I am not sure that we have anything in particular. 



Senator GALLACHER: I am happy for you to take it on notice. While you are there, is there any proactive 

monitoring of services across the country, particularly rural and regional areas, to identify shortcomings, 

particularly in respect of specialised treatment in rural and regional areas? Have you done that in the past? 

Ms Campion: No. As I said, we do not have a particular program to do that. It is more an ongoing process of 

monitoring, as I said before, what the trends are in terms of requests we get for assistance for travel for treatment 

or for finding providers nearby who will accept our arrangements. It is an ongoing piece of work that we keep an 

eye on. 

Senator GALLACHER: My final questions relate to rehabilitation services. We touched on previously the 

recommendations out of the ANAO report. Are there any temporary measures being undertaken while you are 

doing further and better evaluation of the audit report? 

Ms Foreman: I talked a little bit about the first recommendation, which was improving transition for 

members moving from Defence to the Department of Veterans' Affairs, and that we have set up a transition task 

force. That is something that is currently underway. The second recommendation was about performance 

indicators for our rehabilitation program. We have been working on that and we will continue to. Our first attempt 

will appear in the portfolio budget statement for the budget coming up in May and we are continuing to work with 

providers because they actually have a rich source of data and they report in various fora. We feel there are 

lessons we can learn from them in terms of how to present data—the most important type of data—to inform 

people of the success of our programs. That is what we have been doing, and you will see the results of the first 

efforts in the portfolio budget statement. 

The third recommendation related to the way we deal with providers. 

Senator GALLACHER: In respect of that, are you going to implement KPIs? 

Ms Foreman: Yes, we are. 

Senator GALLACHER: Will they apply to all providers including existing ones? 

Ms Foreman: It will apply to the rehabilitation program. We have arrangements already for providers. We are 

strengthening those. I think I told you last time that we use the Comcare-accredited rehabilitation providers. I 

should say that our longer term goal is to work more closely with Defence so that a rehabilitation provider in 

Defence can carry over with a rehabilitation plan for a veteran into the department. That is something we cannot 

achieve in one year, because of contractual arrangements, but that is where we want to be. In the meantime, we 

are doing what we can to ensure that the providers that we use from the Comcare-accredited scheme are providers 

that are well suited to meet the needs of our veterans. We now have five additional selection criteria which 

Comcare providers who would like to work for us must meet. 

We have also been doing a lot with providers in terms of training and provision of information about DVA's 

rehabilitation program, because it is not typical. We are not seeking to return people to the job that they were 

formerly in. We are seeking to return people to a different job because they cannot go back to their job in 

Defence, so our requirements of providers are different. We also use the Goal Attainment Scale, which again is 

not something widely used in the rehabilitation area, but it is a very good methodology to use with veterans 

because we work with their values and their skills to work out what the next steps will be in terms of their 

psychosocial engagement and also their vocational engagement. 

Senator GALLACHER: Can you just give us an update on recommendation 5, the establishment of e- 

learning modules? Are they being developed in house? 

Mr Bayles: Yes, they have been. They already have three e-learning modules which they must complete. That 

is part of the five conditions that Ms Foreman mentioned, but we have developed a number of extra modules 

which talk about rehabilitation processes and policies. Those modules are almost ready to be released to the 

rehabilitation providers. We just have a few final processes to go through before we can launch them. 

Senator GALLACHER: If you implement these recommendations, can you do that within existing resources, 

or is it going to— 

Mr Bayles: We are using existing resources within my branch, yes. 

Senator GALLACHER: So there are no extra FTEs required to implement these recommendations? 

Mr Bayles: No. 

Ms Foreman: We are doing it within existing resources. 

Senator GALLACHER: Does that push the time line out? 



Mr Bayles: Not particularly, but we have been having discussions with rehabilitation providers around how 

they measure success in rehabilitation, what performance measures they use and what reporting they have 

available. As Ms Foreman said, they have a very rich range of performance measures available that they use 

themselves to monitor their own performance. We would like to capitalise on some of that. At the moment, we 

have an ICT capability being built for this function in May this year, and we just want to see how much that ICT 

capability will give us in terms of extra performance measures. Then we will go back to the providers and say: 

'These are the gaps. This is what we need from you. Can you deliver this information to us on a regular basis?' So 

we extend the number of performance measures that we can gather and report on by approaching the providers to 

give that information to us directly. 

Senator GALLACHER: You advised us that you will be pursuing initiatives 3 and 5 throughout 2016-17. 

Are you on track? 

Mr Bayles: Yes, we are on track. 


Senator GALLACHER: And we would see a completion in 2017? 

Mr Bayles: Yes. 

Ms Foreman: A substantial completion, if not completion, yes. 

Senator GALLACHER: Thanks very much, Chair. 

CHAIR: Senator Moore? 

Senator MOORE: In terms of the evidence you gave, you were wanting to bring the Comcare system and the 

Defence system more closely—you want to use the people working in the system who are more closely aligned to 

the Defence system than the ones that are currently working with Comcare accreditation. 


Senator MOORE: Is there much crossover between rehabilitation service providers who contract for 

Defence, DVA and Comcare? 

Ms Foreman: It is a different arrangement. 

Mr Bayles: It is a different arrangement. 

Senator MOORE: A different arrangement—but I am talking about the companies. 

Mr Bayles: In terms of companies, yes. 

Senator MOORE: So the people who actually do it. Is there crossover? 

Mr Bayles: I understand Defence uses two main rehabilitation providers, and DVA has 36 that we use. 

Senator MOORE: Including those two from Defence or not? 

Mr Bayles: Yes. 

Senator MOORE: So there is crossover? 

Mr Bayles: There is some crossover there. 

Senator MOORE: And that is nationally? 

Mr Bayles: Some of the providers are national. The two that Defence have are national. 

Senator MOORE: are national of course. 

Mr Bayles: We have a number of providers who are only regionally based. 

Senator MOORE: Who are the two that Defence use? 

Mr Bayles: I think it is Connect and APM. 

Senator MOORE: Thank you. Thanks, Chair. 

CHAIR: Senator Gallacher. 

Senator GALLACHER: Thanks, Chair. The Sir John Monash Centre, is anybody able to answer a question 

on that? 

Mr Lewis: Certainly, Senator. 

CHAIR: And Villers-Bretonneux. 

Senator GALLACHER: Yes. So we got some information some time ago and we looked at the budget 

expenditure for 2017-18 and 2016-17. So $2.1 million in 2016-17 is to be spent managing the project? 



Major Gen. Chalmers: I would have to take that on notice. I only have the broad figures in front of me. So, 

unless my colleague has those detailed figures— 

Senator GALLACHER: I will just go back. In 2015-16, there was $1.4 million, rising to 2.1 million in 2016- 

17. My line of questioning then was: how much are you spending on airfares flying up and down to manage the 

contract? On notice, could you please provide that completed expenditure? 

Major Gen. Chalmers: Certainly, Senator. 

Senator GALLACHER: Thank you. 

CHAIR: That is it? 

Senator GALLACHER: Yes. 

Senator KITCHING: Can I just ask one more? 

CHAIR: You certainly can. 

Senator KITCHING: In the US, unemployed veterans and long-term unemployed veterans where they are 

employed by companies, those companies are given tax credits. I think for an unemployed veteran it is 

approximately $6,500—it is very easy to find; it is on the US Vet's affairs website—and I think for long-term 

unemployed it is about $9,000 or $9,500 or something. Has the department, or in fact the minister, given thought 

to those kinds of policies? 

Mr Orme: Let me just say two things. The US experience is informative, as is the experience of veterans in 

our other coalition partners, but they are not always good proxies. The entire set of services and benefits that are 

offered are different. There is not a particular veteran unemployment program— 

Senator KITCHING: In Australia. 

Mr Orme: in Australia. The issue of veterans and employment relates generally to things like income support 

and the beneficial opportunities they have in our system once liability is established and those things are 

determined. We are continuing to engage, looking around at all sorts of— 

Senator KITCHING: I am not talking about liability or rehabilitation. I am actually talking about where 

someone served their country and perhaps they are having difficulty finding employment. Let's say they transition 

out of the armed services and they find difficulty in employment in the civilian world. So what the US 

government has done is make it, I guess, attractive to employ a veteran, and they make it more attractive to 

employ a longer term veteran. I think there are probably good policy reasons around doing it. I am just wondering 

if any consideration is being given to that. 

Mr Orme: We do not have the data on long-term veteran unemployment as a subcategory. But in fact I would 

posit that the government is looking at it from the other perspective, and the Prime Minister's employment 

initiative is exactly of the same ilk—addressing the broader challenge of ensuring effective transition of serving 

ADF men and women, who are leaving of their own volition and those who are ill or injured, and assisting to 

build a bridge between industry, commerce, local levels of government and the Defence community in order to 

assist and improve the transition and employment prospects. 

CHAIR: Thank you. And on that note, we will conclude the committee's examination of the Department of 

Veterans' Affairs. I thank you, Minister, Mr Lewis and officers for their attendance. I thank Hansard, 

Broadcasting and the secretariat. I remind my colleagues that written questions on notice should be provided by 

10 March. The committee will begin its hearings tomorrow morning at 9 am with the Foreign Affairs and Trade 

portfolio. 

Committee adjourned at 23:00

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