All Commanders and RSMs:
I am writing to advise you of the measures announced last night in the Federal Budget affecting Army. Defence, like many other departments and agencies, has made a significant contribution to achieving the Government’s economic agenda. It is important that you understand the scale of the ADF’s budgetary reductions to help you put into context the decisions that have been made.
- Overall, Defence has been required to save $5.5 billion over the next four financial years.
- We will see a reduction in this coming financial year of $960 million compared with what was forecast in last year’s budget.
- There are significant adjustments that have been made to the Defence Capability Plan including the delayed delivery of 12 Joint Strike Fighter aircraft and the cancellation of the Self-Propelled Howitzer. However, to meet the required savings other areas have also been affected. This includes spending on facilities, administration, sustainment and operating costs. The bullet points at the end of this message give more detail on specific measures.
You should read the DEFGRAM sent out today by CDF and the Departmental Secretary. In addition, attached to this email are the messages sent to their Services by CN and CAF. They are provided to give you as complete an understanding as possible of the impact on the ADF.
The Service Chiefs, along with the CDF and Secretary, have been closely engaged in recommending and prioritising the Defence measures in the Budget. Throughout this process we have remained unified in our commitment to building a highly capable joint force. While some recommendations have been hard to make, I stand by the decisions upon which we have advised.
The Budget enables us to continue to develop the ADF and Army, nevertheless it requires us to use our resources even more judiciously and to continue to reform.
The Budget will not impact on Defence support to operations. Our people will continue to be fully prepared for their mission in Afghanistan and in other operational areas. My priorities as Chief of Army have been largely unaffected: the implementation of Plan Beersheba including Exercise Hamel; the development of a joint amphibious capability; efforts to enhance gender inclusiveness and our support to our wounded, injured and ill. We have right objectives, it will just take longer to reach some of them.
Army uniformed strength will not be affected but we will be required to make a contribution in the reduction to the total defence APS workforce. The details of this reduction are still being worked through and the Secretary does not at this time contemplate involuntary redundancies.
I am aware that public commentary surrounding the Budget is likely to concern some of our people, which is why communicating with them quickly is important.
As Army’s commanders you have a key role in assisting me to explain the Budget to our people. But I would also ask that you reiterate to them that I am Army’s only public spokesperson on all Budget related issues.
From here I intend to engage Army’s Senior Leadership to further develop implementation plans for the announced measures, and I have tasked both DCA and HMSP-A to lead aspects of this work. You can expect additional guidance but in the meantime you should continue to actively pursue reform and a cost conscious approach to building and sustaining Army capability.
In the short term I want you to engage your people to ensure they understand that I have been closely involved in developing the Defence Budget measures. I believe Army has sufficient resources but safety must never be compromised. I appreciate a can-do attitude only if it is founded on the considered management of risk. Resource constraint is no justification for breaching safety protocols.
We have experienced periods of tight fiscal constraint in the past and should not be daunted by the challenge it presents. I expect that you will meet this leadership challenge with Courage, Initiative and Teamwork.
Chief of Army
9 May 2012
Key Budget Measures:
· Army will contribute to a Departmental reduction of 1,000 APS Workforce positions over the next two financial years. This will largely be achieved through natural attrition and with no involuntary redundancies.
· Removal of Recreational Leave Travel for single members over the age of 21.
· Cessation of the Army Gap Year Program.
· 10% reduction in the allocation of Army reserve training salaries.
· Reduction of approximately 50, non-operational, continuous full-time service positions in 2012-13.
· 20% reduction in Army minor capital equipment expenditure in 2012-13.
· M1A1 Abrams Tanks. Fifteen M1A1 tanks will be placed into temporary storage. The tanks will be maintained in a condition that allows them to be rapidly returned to service when Army’s fiscal situation improves. In order to maintain the capability with a reduced number of platforms, Army will need to examine more efficient and effective ways to train tank crews including expenditure on enhanced simulation systems.
· M113AS4 Armoured Personnel Carriers. One hundred M113AS4 Armoured Personnel Carriers will be placed into temporary storage. The APCs will be placed into temporary storage in a condition where they can be rapidly returned to service when Army’s fiscal situation improves. Army will need to develop an equipment and training methodology to ensure an adequate number of crews are maintained to meet contingency requirements.
· One-off delay in procurement of commercial vehicles. Army will delay the disposal of a number of commercial vehicles ensuring a one-off saving. This will see units maintaining vehicles for a year longer than forecasted. Over the following two years, these vehicles will be replaced then the normal frequency of replacement will resume.
· A reduction in the Defence fleet size by 800 vehicles. Defence will see a further reduction in the commercial vehicle fleet by 800. Of the 800, Army is expected to contribute 200 vehicles to this target.
· Minor reduction in rate of effort for ARH and MRH in 2012-13. In order to achieve a cost saving in the next financial year, Army aviation will reduce its rate of effort for both ARH and MRH. This reduction will see minimal effects on training and introduction into service of the new systems.
· Procurement: explosive ordnance, deployable local area networks and clothing. This is a one-off, non-operational, reduction in procurement of explosive ordnance, deployable local area networks and clothing in 2012-13. This will be achieved by drawing down on current inventory.
· Delay in the procurement of field generators and combat load carriage equipment. This is a one-off, non-operational, delay in the procurement of field generators and combat load carriage equipment in 2012-13. This reduction will not see a noticeable effect at the tactical level. This will be achieved by drawing down on current inventory.
Operating Programs – common to Defence
· 20% reduction in business travel, minor purchases and office requisites.
· 15% reduction in the engagement of consultants and contractors.
· 10% reduction in number of postings and relocations.
· Land 17 Ph 1C.1 – Self Propelled Howitzers. This project was scoped to deliver 18 x Self Propelled Howitzers and is cancelled. Army will now procure an equivalent number of M777 Towed Howitzers.
· Land 146 Ph 2 – Combat Identification of Ground Forces. This project was scoped to deliver a digital Close Air Support capability for Land Forces and is cancelled. The majority of the scope will now be delivered through Land 17 Ph 1B Digital Terminal Control System and Land 146 Ph 1.
· JP 65 – Enhancements to Secure Trunk Communications. This project was scoped to deliver enhancements to the Land Forces secure trunk communications network and is cancelled. The project enhancements are scheduled for replacement in the near term by superior satellite communications technology through JP 2072 Ph 2B which will provide enhanced command and control for deployed ADF Headquarters in the Land environment.
· JP 2043 Ph 3A – High Frequency Modernisation. The mobile component was scoped to deliver 33 x mobile communications systems and has been cancelled. The capability requirement has been replaced by satellite and very high frequency communications systems.
· 12 additional Army projects have been slipped one year and one Army project has been slipped two years. The impact of this will be managed though Life of Type Extensions of in-service platforms and is as follows:
· AIR 9000 CH CAP (CH-47F) Capability Alignment Program (maintain the CH-47F to US build standard).
· JP 2097 Ph 1B – REDFIN Special Operations Capability (replacement special operations vehicles and battle management system).
· Land 400 – Land Combat Vehicle System (mounted close combat capability for the Land Force).
· JP 129 Ph 3 – Tactical Unmanned Aerial Vehicle (SHADOW replacement or upgrade).
· JP 1771 Ph 1 – Geospatial Support Systems for the Land Force (modernisation of collection, data management and dissemination of geospatial information).
· Land 17 Ph 1C.2 – Future Family Ammunition (155mm ammunition family).
· Land 125 Ph 3C – Soldier Enhancement Version 2: Lethality (enhanced F88).
· Land 125 Ph 4 – Integrated Soldier System Version 3 (next generation of the soldier combat system covering lethality, survivability, mobility and command and control).
· JP 154 Ph 2 – Counter IED (Force Protection ECM and Weapon Technical Intelligence capability).
· JP 2110 Ph 1B – Chemical, Biological, Radiological, Nuclear Defence 1B (to enable Land Forces to operate in a CBRN environment).
· JP 3011 Ph 1 – Non Lethal Weapons (enhance ADF non lethal capabilities).
· JP 157 Ph 1 – Replacement Refuelling Trucks (fixed base aviation refuelling vehicles).
· Land 19 Ph 7B – Ground Based Air Defence Replacement (replacement or enhancement of the Ground Based Air Defence System) – two year delay.
· 20 Army Major Capital Facilities projects have been delayed up to three years. The impact of this will be managed through prioritisation and reallocation of funds within the Estate Maintenance program. The project delays is as follows:
· 17 Const Sqn Relocation – 1 year delay to the relocation to RAAF Amberley.
· 11 Close Health Company Interim facilities – 1 year delay.
· RMC-D Armoury Redevelopment – 1 year delay.
· Holsworthy Barracks Redevelopment Stage 2 – 1 year delay.
· Larrakeyah Base Redevelopment – 2 year to the NORFORCE redevelopment.
· Enoggera Redevelopment Stage 2 – 2 year delay.
· Randwick Barracks Redevelopment – 2 year delay.
· Lavarack Barracks Upgrade – 2 year delay.
· Edinburgh Multi-user Depot and Relocation of Elizabeth North Units – 2 year delay.
· Enhanced Land Force Stage 2C – 3 year delay to training area works (approved elements not yet in contract).
· Oakey Redevelopment Stage 2 – 3 year delay.
· Watsonia Redevelopment – 3 year delay.
· Bindoon SF Training Area – 3 year delay.
· Anglesea Barracks Redevelopment – 3 year delay.
· Singleton Redevelopment – 3 year delay.
· Kapooka Working Accommodation – 3 year delay.
· Robertson Barracks Redevelopment – 3 year delay.
· Puckapunyal Redevelopment – 3 year delay.
· Victoria Barracks Sydney Reinvestment – 3 year delay.
· A Coy, 41 RNSWR New Tweed Heads Depot – 3 year delay.