The Hon Stuart Robert MP Assistant Minister for Defence ADDRESS TO THE 2014 FINANCE CONGRESS WEDNESDAY 11 JUNE 2014 Check against delivery Introduction Welcome to the 2014 Finance Congress and thank you for the opportunity to join you this morning. Let me particularly thank Defence s Finance Team for their invitation to speak to you and particularly to our CFO Phillip Prior, who now sports the post nominals PSM after deservedly being included in the honours list. I am very pleased to be with you today as it provides an opportunity to reinforce the importance of the work you do, especially those in Defence where we have one over riding objective that is the application of combat power in support of our nation s objectives. Everything in my Dept is viewed through that lens. Hence why I am so pleased with the theme of this year s congress abolishing duplication and embracing innovation, both of which allow the better utilisation of money to achieve Defence s primary goal, and the goals of your respective Departments. History Lesson However, first I would like to recount a little history, not simply for the sake of interest but because it illuminates why we must pursue innovate solutions to problems and to never accept the status quo as being good enough. Innovation, after all, is what drives us forward, beyond what we know to something greater, something better. Something that improves our nation.
Between 2014 and 2018 Australia commemorates a milestone of special significance to all Australians - the Centenary of Anzac. It was the First World War that helped define us as a people and as a nation. It was against the backdrop of the Great War that General Sir John Monash, one of Australia s most outstanding military commanders, a civil engineer and a Reservist, used the tools at his disposal in innovative ways to generate a disproportionate effect on the battlefield. In typical Australian style Monash, annoyed by a kink in the front line on the Western Front, decided to do something about it. The kink was a town called Hamel and was held by the Germans, giving them a tactical advantage. Monash conceived a plan using untried and innovative tactics to take the town using tanks and a creeping artillery barrage. The tanks and artillery would allow a small force of Australians with the support of some newly arrived troops from the United States Army to enter the town under protection. In the preparation before the attack, Monash ordered the Australian artillery to shell the town with gas however, on the day of the attack, 4 July 1918, the guns fired smoke bombs instead of gas. Reports from the field indicated that many of the Germans were severely hampered after putting on their gas masks while the Australians had a wide field of vision. General Monash also arranged for air support to drop supplies during the battle so the soldiers were not hindered by having to carry heavy ammunition boxes. The attack was a resounding success with Hamel falling in 93 minutes - 3 minutes longer than Monash had anticipated. Monash had initiated the all arms battle the coordination of artillery, infantry, armour and aircraft to turn stalemate into victory on the Western Front. Monash supported the view that the most effective warfare involved many different types of weaponry and defences working together the whole being greater than the sum of its parts. Government is no different the whole is greater than the sum of its parts.
Innovation This is why innovation must not be confined to those facing insurmountable odds on the battlefield, or deferred to the very few at the tops of our departments? Innovation must be core for all of us. It should be silent on who you lead and on the challenges you confront. Whether it is combating bureaucratic inertia or liberating the town of Hamel, innovation should be embraced as a means to affect an outcome beneficial to our country and to our citizenry we serve. Because it is the same mental approach that achieves both battlefield victory and Departmental or process change. Today s challenges Traditionally, Australia s federal financial relations are characterised by shared roles and responsibilities, which have developed and accumulated over time. Industry is no different. This has led, rather inevitably, to administrative duplication and overlap, resulting in higher administrative costs, blurred accountabilities and reduced efficiency. Again Industry is no different. This can result in a sense of cross purposes and even a sense of learned helplessness, which manifests itself as unwieldy processes and the slow delivery of services, most often at an increased cost to the tax payer. Of this I have first hand experience from my previous life in the private sector, and the scars to prove it! Between leaving the Army after 12 years of service and entering Parliament, a colleague and I started our own IT services firm in Queensland. It quickly grew to become a nationwide company and was named twice in the Business Review Weekly Fast 100 list. It was during my time in the private sector, as a small business owner, that I first experienced the bureaucratic hand of Government.
I remember how difficult it was to embrace change and drive innovation when dealing with a bureaucracy that was wedded to the status quo and the supremacy of processes over outcomes. Example One of the jobs we did was to work with a team to put in place a full suited electronic health record into QLD Health. Suffice to say that inertia, kingdom building, fiefdoms and process for its own sake killed it. Now as a Minister I m putting in Jehdi, an electronic health record into the ADF. Let me tell you it won t fail like QLD Health. It has sponsorship at the Ministerial level and may the Lord help any petty process from getting in the way. To affect change in the way that government works for the Australian people is one of the reasons I decided to enter Parliament. It was Abraham Lincoln who said: The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves---in their separate, and individual capacities. In all that the people can individually do as well for themselves, government ought not to interfere. I certainly share President Lincoln s view of government, yet inherent within his well known passage is the need to define what a community can and cannot do for itself. To this day this remains the subject of much contention and debate. However, President Lincoln did lay down some markers of what communities cannot do for themselves including building public roads, highways, public schools and orphanages. Tellingly, President Lincoln also lists the machinery of government as something the community cannot do for itself. It therefore falls to the government to, ostensibly, administer itself.
And it is here, ladies and gentleman, that innovation has its true home. It s here where organisations must innovate and achieve success without the spectre of the Minster hovering daring anyone to get in the way of the ADF s electronic health record. It is here, within government, that innovation can have possibly the most marked impact on the community. For the work of government is in no small part devoted to those in the community who cannot do for themselves. Innovation within government and the APS therefore has the capacity to do tremendous good, literally, to better lives, to transform lives and to save lives. My challenge to you is to embrace innovation, not as an end but as a means of providing enhanced support for the community. As a means to reducing the administrative and bureaucratic burden on business and as a means to saving money in order we can better spend it on areas of real need, and not simply on the machinery of government. There is such a beast as bureaucratic and administrative innovation, and I want us all to embrace it! To find better ways to serve the community, get rid of red tape, to dispel to the dustbin of history that phrase we ve always done it this way. Changes already underway As I am sure is now clear, this Government is committed to reducing administrative burdens. We are seeking to have only that level of Government necessary to assist those who are unable to assist themselves. Ultimately, this means a smaller, more agile and innovative public sector. Regulation for regulation s sake does not achieve this goal which means the APS needs to change and as a part of that transformation it needs to innovate. This audience well knows from the Treasurer s statements in the May budget that the Government is well underway to repairing the budget.
As part of this process we have taken stock of the recommendations flowing from the National Commission of Audit, particularly those that will simplify the machinery of government. Key to the Government s policies is the need to eliminate both duplication and waste in order to improve efficiency across the whole of government. To reduce red tape. To critically examine what you do now to achieve your objectives more quickly and efficiently. To not simply go through the motions, but question why you are doing something. Your objective is to deliver better results through a smaller government. For government, one of the principle tools for decision making in using public money is ensuring value for money providing the best return on the funds entrusted to us. Simplification is one of the best ways to reduce administrative bureaucracy. Reducing process and regulation to the minimum required for proper accountability. In my capacity as the Assistant Minister for Defence I have seen first hand how administrative largesse has directly affected Defence members. Example By way of an example, I would like to talk briefly about Defence Housing Australia DHA. To give you some background, DHA is a self-funding Government Business Enterprise responsible for providing housing for Defence s military personnel right around Australia. It builds over 1,000 houses per annum and has been doing so for quite some time. DHA, to give you some further context, returned approximately $50m profit to government last financial year. Despite this ongoing success, each time DHA sought to build a major development outside of a military base it was required to gain approval from the Parliamentary Standing Committee on Public Works. Quite simply this burdensome process existed only because it was the status quo we had been doing it like that since day dot, and therefore we should keep doing it.
And the result delays to housing Defence members and their families. Working with my parliamentary and departmental colleagues I succeeded in removing the requirement for PWC review of off base DHA housing projects. Simply put, I challenged the status quo. And the result In individual terms Defence members and their families are on average able to move into their new home four months earlier. In machinery of government terms removing the PWC oversight represents a major reduction in the internal compliance burden of DHA while also relieving the PWC of a large administrative workload. In financial terms the process changes are expected to create both direct and indirect annual savings of over $8m per annum, or $32m across the forward estimates. Any I m not done yet. Why is DHA required to use Federal Safety Commissioner accredit builders? This costs an extra $15,000 per house, discriminates against local and regional builders and adds zero extra safety. Why is DHA considered On Budget, when being Off Budget like most other GBE s would allow us to raise capital more cheaply. I m doing this for every area of Defence I touch. The professional leaders in the Department know I want to know how a process or policy began, why it is still relevant, does it maximise combat power through happier soldiers, better conditions, less paperwork. My Department also knows that I will accept more political risk for better outcomes for our people. Innovation sometimes means a different approach, taking personal responsibility and not hiding behind process.
Conclusion Ladies and gentleman I want to finish today by encouraging you all to embrace the notion of challenging the status quo and to seek out innovative solutions to problems and inefficiencies. Your Ministers need to hear it from you and the community deserves it. Challenging the status quo is not a career limiting move, if in doubt Quote Me. Challenging ingrained administrative orthodoxy and bureaucratic inertia can be an entirely rewarding experience, particularly where those outcomes assist those in need. Resist the urge to defend processes that obscure your outcome or where their purpose is not clearly known. And as you return to your respective departments remember that the actions you take have a fundamental bearing on those in our community, in your community. On innovation I simply wish to conclude by stating once more that a culture of innovation can start with the Australian Public Service. The Government should be able to provide innovative service delivery to empower industry, the Australian economy and ultimately individuals. As the world changes quickly around us, so too must the public sector. We should all embrace Australia s history of innovation just as Monash did on the battlefield almost 100 years ago. I challenge you to use this opportunity to think about where you can innovate. Where you can improve processes and systems. To look across the whole of your portfolios and critically examine where you can bring efficiencies to make improvements by reducing administration. For those in Defence, Mr Prior I expect the top 10 innovative ideas generated from the conference to be on my desk in the next little while so I can sign them off with a flourish. I encourage you to develop links between agencies to collaborate across the finance community. To be open to new ideas and to seek out different views.
Don t just accept the status quo challenge it, ask why and ask often. Be encouraged to find better ways of doing things especially the normal things. Be innovative each day and share your ideas. Thank you.