Hunn Review: Annexes (30 September 2002)

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Annex D

Comparative Studies: Higher Defence Structures in Australia, United Kingdom, Canada and the United States

Introduction

In any comparative analysis work, there are always differences of size, historical experience, resources, etc. Some differences are significant. For example, in assessing the relevance of international experience to New Zealand, it is important to take account of the fact that over 15 years of reforms have changed the ways in which all parts of New Zealand's Public Sector operate, manage resources, and account to Parliament and the Government for results. Such reforms have not been taken as far in the defence establishments in comparator countries. This can create incompatibilities between the legal frameworks of government operations between New Zealand and those countries with which we normally compare ourselves.
At same time, many other differences do not invalidate the lessons that can be learned from relevant overseas experiences. For example, regardless of its comparatively small size, the New Zealand defence establishment must perform exactly the same management functions that much larger defence establishments of relevance must perform.
Other aspects of similarity underwrite the value of examining the higher defence structures of Australia, United Kingdom, Canada and the United States. For example, these countries operate popular representative democratic political systems that assign broadly similar direction and oversight roles to legislative and executive branches of government for defence activities. These countries maintain defence management and policy staffs made up of both military officers and civilian officers. These countries have to varying degrees, moved to adopt many of the public sector management concepts and approaches that have been developed in New Zealand. In some aspects of management, their defence organisations have followed a New Zealand practice lead; in other areas, New Zealand's lead has been overtaken by reform initiatives in Australia, Canada, US and UK.
For these reasons - similarity of defence functions, democratic political governance structures and practices, the advantages of coalition interoperability, and similar developmental tracks in management reform - Australia, the United Kingdom, Canada and the United States offer particularly relevant higher defence structures worthy of consideration.

Australia

The Australian Defence Organisation (ADO) is made up of the Australian Defence Force (AD F) and the Australian Department of Defence (DoD). The ADF and DoD are separate but interdependent entities whose staffs are both co-located and fully integrated across a broad range of functions. The ADO is a 'diarchy' (Government by two separate entities). The diarchy brings together the separate legislative powers of the Chief of Defence Force (CD F) and the Secretary of Defence.
Constitutionally, the Australian and New Zealand approaches to defence are very similar. In both countries the Governor General holds the formal but largely ceremonial title of Commander-in-Chief. Control of the Armed Forces is vested in the Minister. The Chief of Defence Force exercises command. The main difference is in respect of the Secretary. In Australia, the Secretary of Defence jointly administers the ADF with the CDF, but retains ultimate authority and accountability for administrative matters and the expenditure of defence resources.
Civilian control of the military in Australia, as in New Zealand, is well understood to mean control by the Government (not the civilian bureaucracy). The Minister exercises this control on behalf of the Cabinet. He issues an annual joint ministerial directive to the CDF and Secretary, setting out strategic objectives for the Defence portfolio.
In Australia, the principal Act governing the powers of the Minister, the CDF and the Secretary is the Defence Act 1903. The Secretary also draws separate power from the Public Service Act 1922. Under this Act, the Secretary is responsible and accountable for the general good working of the ADO. He is also responsible for all expenditure. In practice (see below) CDF and the Secretary jointly share their administrative, advice and control (but not command) responsibilities through an interlocking system of Output Executives, Owner Support Executives and Enabling Executives, all of whom report equally to both Chief Executives.
A point of note in the Australian system is the time spent in recent years on refining their defence governance arrangements. Through a succession of efficiency and other reviews the Australian higher defence structure, like that in the UK, has moved from a model based on separate civilian and military staffs to one organized around the achievement of agreed outputs by integrated civilian and military staffs working in partnership with each other.
The Australian government currently funds Defence to produce 6 outputs (Defence Operations; Navy; Army; Air Force; Strategic Policy; and, Intelligence). Each output is the responsibility of an Output Executive. The first four Output Executives are exclusively military appointments (but responsible nonetheless to the Secretary-CDF diarchy or partnership).
Supporting the ADO and the Government in its role as owner, the six Output Executives are assisted by six Owner Support Executives focused on broad governance issues. They provide support to the Secretary CDF in relation to goods and services, and sustain ability issues. The six Owner Support Executives are the Vice Chief of the Defence Force, the Chief Financial Officer, Head Defence Personnel Executive, Chief Defence Scientist, Head Public Affairs and Corporate Communication and the Inspector General.
In addition, there are a further two Enabling Executives who provide goods and services to the other Executives. They are the Under Secretary Materiel and Deputy Secretary Corporate Services.

Figure 1: Australian Defence Organisation as at 1 July 2001

Image: Figure 1 - Australian Defence Organisation s at 1 July 2001.

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The main points of interest in the New Zealand context are:
- The extent of integration across the ADO. All Output Executives (including the Service Chiefs), Owner Support Executives (including the Inspector General) and Enabling Executives (including the Under Secretary Defence Materiel) report equally to both the Secretary and the Chief of Defence Force. They have, in effect, twin-reporting lines.
- There is no separate Deputy Secretary, Audit and Evaluation: this role is performed as part of the Inspectorate General function.
- Consistent with the underlying philosophy of a fully integrated organizational structure, the Under Secretary Defence Materiel does not report separately to the Secretary. The Under Secretary reports to both the Secretary and CDF.
- Although the Secretary is ultimately responsible for the good functioning of the ADO, and its resources, the Chief Financial Officer and the Deputy Secretary Corporate Services also report to both Chief Executives.
- In the Australian system, neither Chief Executive takes exclusive day-to-day responsibility for anyone aspect of Defence policy or administration. Nonetheless, the CDF alone remains responsible for command and control of the ADF.
A point made to the Review is that the mere act of integration does not solve all the problems. CDF and the Secretary still need to work actively at inculcating the habit of cooperation between the staffs. To lead the way, a variety of practical arrangements have been put in place to support the Secretary and CDF. First, they have physically adjoining offices. Second, they share a common reception area and support staff. Third, there is a well- articulated system of senior committees to bring together the work of the integrated staffs.

Committee Structures

The principal decision making body in the ADO is the Defence Committee. Chaired by the Secretary, this committee consists of CDF plus all the Output Executives, the Owner Support Executives (except Public Affairs and Defence Personnel) and the Enabling Executives.
The Chiefs of Staff Committee (COSC) is chaired by the CDF. The Secretary is a permanently invited member. The COSC provides 'military advice' to the CDF to assist in the discharge of command responsibilities. A Defence Capability and Investment Committee, chaired by the VCDF, and including representatives from both 'halves' of the defence organisation, looks after present and future capability issues. A Defence Audit Committee, chaired by an 'external' member, and with representatives from both sides of the house, discharges responsibility for the audit programme.
By joint ministerial directive, all proposals by CDF for promotion to the rank of Brigadier equivalent and above are made in consultation with the Secretary, VCDF and the Service Chiefs.

Higher-level National Security Arrangements - Government

In New Zealand, an ad hoc grouping of Ministers (typically, the Prime Minister, Deputy Prime Minister, Finance Minister, Minister of Foreign Affairs and Trade, and Minister of Defence), exercise overall responsibility for national security. There is no standing Cabinet level, or senior officials' level, National Security Committee. In Australia, a more formalised structure exists. At Cabinet level, a National Security Committee (NSC), comprising the Prime Minister, Deputy Prime Minister, the Treasurer, Minister of Foreign Affairs, Attorney-General, and Minister of Defence meet from time to time to discuss matters concerning international political, economic, defence, intelligence, and domestic security. A committee of senior officials at Permanent Head level (the Secretaries' Committee) supports the NSC.

Higher-level National Security Arrangements - Parliament

Parliamentary oversight is mainly exercised through the Joint Standing Committee on Foreign Affairs, Defence and Trade of the Australian Senate and House of Representatives. This committee of 32 Senators and Representatives has four sub-committees: Foreign Affairs, Defence, Trade and Human Rights. The full committee and its sub-committees are empowered to inquire into and report upon matters relating to their area of government activity.
The Standing Committee operates in two modes: as a References Committee and as a Legislation Committee. In the former role, the Committee inquires into and reports on matters referred to it by the Senate or the House of Representatives. In its Legislative role, the Committee examines any bills or draft bills referred to it. The Committee does not have the power to amend bills, but may recommend amendments. In this role, the Committee is also responsible for monitoring the performance of departments and agencies. All relevant departmental annual reports are referred to the Committee for scrutiny. The Committee does not have any prerogatives in terms of treaty making or ratification.
The Joint Committee has a permanent parliamentary staff of five, including a Committee Secretary, and two researchers. Each sub-committee also has its own dedicated Secretary.

Public Consultation

The Parliamentary Committee is the prime method through which public consultation is sought on defence and national security matters). However, in 2000, the Australian Government (through the Defence Minister and the National Security Committee of Cabinet) decided to undertake a broad- ranging public consultation in order to involve the community public in the formulation of defence policy making for the period ahead. The Australian national consultation followed similar successful initiatives in the United Kingdom and the United States (see paragraphs D.39-43 and D.71-72).
The process involved the release of a public discussion paper on defence, the setting up of a Community Consultation Team (of four members) and a nation-wide series of hearings. As a result, over 2,000 people attended 28 community meetings, with more than 1,150 written submissions being made by individuals, industry and community organisations and over 5,000 e- mail messages received.
The public consultation provided a highly effective vehicle for disseminating information about defence and security issues facing Australia. It tested the variety of views and levels of consensus in respect of such issues. It also opened up the previously "closed door" Governmental decision-making process for defence policy-making and assisted in building a broader community understanding of government policy.

Relevance of Experience

If New Zealand were to move in the Australian direction (i.e. full integration of staffs, joint administration by an interdependent Defence executive, adoption of joint Ministerial directives to the Secretary and CDF, reform of committee structures and representation on them) this would not represent a return to the situation pre-1990. For example, unless the New Zealand Defence Act was amended or revised, there would still be two Defence agencies. The formal situation would be much as at present but virtual unification would be achieved even by both groups of staffs working to a single vision and set of directives. Integrating the staffs would directly address problems of information access, duplication and other deficiencies that have been identified.
Drawing on the Australian experience, there are a number of options for achieving positive benefits of contestability. First, the central strategic management and policy areas of the defence organisation could be strengthened significantly. Such staffs would need to be led by appropriately ranked and qualified senior executives responsible to both Chief Executives, for the quality of all organisational advice (whether civilian or military, policy or operational¹). Second, inter-agency consultative arrangements could be strengthened to ensure that advice being tendered is transparent, rigorous and arrived at on the basis of full inter -(and intra-) departmental input. Third, staff resources available in the Minister's office could be strengthened to assist him in the discharge of his oversight responsibilities. Fourth, expert, independent, staff input to the Select Committee could be provided to assist that Committee to fulfIl its role as an independent contributor of defence policy and decisions. Fifth, a more public consultative approach could be incorporated into the formulation of defence policy either through an independent Advisory Committee on National Security and Defence (along the lines of the Public Advisory Committee on Disarmament and Arms Control as proposed by the Select Committee's report on Defence Beyond 2000²) or through community and/or expert panel-based consultations.

United Kingdom

Even with allowance for differences in size of their armed forces, the strategic level command, control and administrative arrangements in the UK bear striking similarity to the top level defence structure in Australia, as do arrangements for political oversight. The overall concept in the UK is to conduct the business of defence through an integrated civil/military strategic management organization whose activities are managed through collective responsibilities and accountabilities.
At departmental level, two principal advisers support the Minister: the Permanent Under Secretary and the Chief of the Defence Staff. The two advisers are equal in authority. Their work is supported by a Joint Central Staff which is a fully integrated, civil/military organization with responsibilities for: Resources, Programmes and Personnel; Operations and Policy; Administration and Civilian management; Finance Management and Accountability; Equipment Capability Requirements, Planning and Programming; and, Management and Organisational Reform. These responsibilities cover both the administration of the Ministry of Defence and the Armed Forces themselves.
The Joint Central Staff itself has developed over the last 15 years through a series of evolutionary steps, one of the most recent of which was to integrate the three Single Service Capability Development staffs into a single Equipment Capability Customer area. The 2nd Permanent Under Secretary and the Vice Chief of the Defence Staff manage and lead the Joint Central Staff, for which they are jointly responsible.
Points of interest in the UK model in the New Zealand context include the:
- equal status afforded to the Permanent Under Secretary and the CDS, and the 2nd Under Secretary and the VCDS;
- formation of a fully integrated civilian/military staff to conduct all strategic level staff work;
- linkages between the Defence Commitments and Defence Policy areas (which addresses the concern that policy needs to be informed by operations, and vice versa);
- separate Defence procurement, and joint logistics organisations, the former with a business-style board of directors of civilian and military officers;
- joint military and civilian staff responsible for military capability definition, development, structured by military capability, rather than Service groupings; and
- role of the Joint Central Staff in resource planning, programming and budgeting.

Figure 2: United Kingdom Ministry of Defence Joint Central Staff Organisation

Image: Figure 2 - United Kingdom Ministry of Defence Joint Central Staff Organisation.