Australia's Defence Minister Richard Marles, centre, with Defence Industry Minister Pat Conroy, left, and Chief of Navy Mark Hammond, in March last year (David Gray/AFP via Getty Images)

Want to fix Defence? Start by cutting bureaucratic bloat

Same people, same jobs, new structure – but somehow performance will improve. This story has been told before.

Michael Shoebridge

2 December 20254 min read

Defence Minister Richard Marles and Defence Industry Minister Pat Conroy have just announced what is billed as “the biggest reform to the defence organisation in 50 years”, “all about getting the equipment ... the brave men and women of the Australian Defence Force need into their hands sooner”, with “better bang for the buck”.

Despite grand pronouncements, performance isn’t likely to improve through shuffling staff from one recently created part of the bureaucracy back into a renamed structure which eerily resembles one we had a few years ago.

Marles and Conroy say the current Capability Acquisition and Sustainment Group in the Defence Department will be replaced by a new Defence Delivery Agency that will report directly to ministers and have its own budget. And this separate agency will have two other bits of Defence – the Guided Weapons enterprise and the Naval Shipbuilding Group – rolled into it.

Terrific. Except these changes undo fairly recent changes that had exactly the same goals. Defence has somehow convinced the ministers that undoing changes designed to streamline things and focus on delivery will – yes – streamline things and focus on delivery. That’s either very effective Yes Minister management by bureaucrats, or it’s self-deception by our elected representatives.

Marles seems not to realise that the two functions he is proudly telling us will be merged into the rebadged acquisition group were only split out of that organisation in March 2021 and October 2022. Humpty Dumpty is being put back together again.

Real change would start with a 50% cut to senior official numbers, making staff ratios comparable to other defence organisations internationally.

The bigger idea that we’re told will deliver better “bang for buck” in how taxpayer money is spent by the Defence bureaucracy is creation of the new Defence Delivery Agency. This will, according to the ministers, “ensure that money is spent in the best possible way”. Why? Because its head, who will report directly to the ministers, will come from industry (just like the last few heads of the old organisation have). And the new agency head can be “held accountable for the delivery of programs on time and on budget”.

We were told the exact opposite back in 2015 when a separate delivery agency – then called the Defence Materiel Organisation – was wound up and replaced by the Capability Acquisition and Sustainment Group inside Defence. The then bureaucracy convinced Defence Minister Kevin Andrews that this move would end the “inefficient, federated approach” and replace it with an “integrated organisation that delivers enhanced joint capability”. It would also increase the level of contestability, streamline approaches and fast track projects.

Ten years on Marles and Conroy tell us that shifting these functions back out of Defence into a separate agency will “drive stronger contestability, more accurate cost estimation, and clearer accountability for delivery of major projects”.

In all this reshuffling and printing of new business cards, letterheads and logos one thing isn’t happening. Marles assured taxpayers this latest restructure won’t lead to job cuts inside the defence bureaucracy. Instead, “those people who are working in those groups today will be those who give rise to the creation of the Defence Delivery Group … And it will be the same number of people”.

Amazing. If the same people will do the same jobs but in a new structure, how will anything improve?

Meanwhile, senior officer headcounts continue to rise according to the latest Defence Annual Report – senior civilians to just under 200, up seven from 2024, and senior military officers up four.

Defence has around twice as many senior officials compared to back in 1985, when Defence was about 30,000 people bigger than now. Back then, Defence ran shipyards, dockyards and factories making munitions and aircraft components, with 15,000 defence workers in them. Now it contracts out all this actual work.

Exercises at Puckapunyal, Victoria (Defence Imagery)

Cash freed up from a 50% cut to senior official numbers could fund equipment and exercises (Defence Imagery)

The bigger and more complicated the structures of Defence get and the more bloated its senior officer staffing grows, the worse the results. That’s been the story of Defence for the last three decades now.

Real change would start with a 50% cut to senior official numbers, making staff ratios comparable to other defence organisations internationally. The cash freed up could fund equipment and exercises.

Right now, 20 officials in Defence are paid more than the defence minister (who is on about $480,000) and more than the Treasurer. Of these, 10 are paid more than the prime minister – who’s on about $620,000.

Ending this senior officer bloat would begin to clarify and simplify how the opaque Defence organisation operates. There are so many senior officials that anyone at the rank of colonel or below has no real authority or autonomy. That’s not just demoralising and demotivating; it ensures innovation is squashed before it begins.

But for now, we’re all expected to pretend that deck chair shuffling undoing previous change is radical reform. Well done, Sir Humphrey. You have trained this crop of ministers well. In a few years, you can dust off the old briefing papers and do it all again.

About the author

Michael Shoebridge

Michael is a founder and Director of Strategic Analysis Australia .

Topics

Australia Defence & security