Great stuff. Your Defence working for ...well... themselves.
Senator JOHNSTON: Yes, but why would Dr Thomson say Defence's financial management are having serious problems?
Dr Watt: I do not think we are. We had an underspend this year, a large underspend. That was extremely regrettable. We will be working very hard to make sure we do not have a large underspend next year. We have our problems; Dr Thomson's choice of words are Dr Thomson's, not mine.
Senator JOHNSTON: You know that the committee is not going to sit here and read this very excellent report from ASPI, which is funded by Defence and of which you have had a preliminary copy, and just let this wash under the bridge.
Dr Watt: I am not suggesting you should.
Senator JOHNSTON: Now we spend an awful lot of money trying to plan budget by budget with the defence capability plan, with a legion of people working on where we are going to be next year, the year after, and indeed out to 2030. How is it you get it so wrong?
Dr Watt: As I said, firstly, this was an unusual year. Secondly—
Senator JOHNSTON: Why is it an unusual year?
Dr Watt: We had a significant period of time this year when we had an election, an extended caretaker period and new ministers.
Senator JOHNSTON: But that is predictable, surely?
Dr Watt: No, it is not.
Senator JOHNSTON: So election cycles completely muck up your planning is what you are saying?
Dr Watt: They can; they affect every agency's and department's planning.
Senator JOHNSTON: How?
Dr Watt: Ministerial approval for matters is hard to get during an election.
Senator JOHNSTON: You had two ministers working on it in caretaker mode—myself and Senator Faulkner.
Dr Watt: Yes, Senator.
Senator JOHNSTON: How does it muck your program up, as you are trying to have us believe?
Dr Watt: The answer is this: you do not have the ability to get throughput and cabinet consideration that you would get during a normal period of time.
Senator JOHNSTON: Can you tell me how many approaches to cabinet you have made in the period 2009-10 and 2010-11? How many have been deferred? How many starts you wanted but did not get? Tell us all about those, if you will?
Dr Watt: I can give you those in due course, but what I cannot tell you—
Senator JOHNSTON: Are you going to take those on notice?
Dr Watt: I will take those on notice, but what I cannot tell you is the hypothetical—how many we would have had forward if we had had normal government through the second half of last year. That is the much harder question to answer. What you are saying is, 'You did not go to cabinet and therefore there was no problem,' but what I am saying is that there was no cabinet to go to.
Senator JOHNSTON: No; I am talking about how many times you went to cabinet and did not get a start or were told there was no room for you in cabinet or the NSC for an approval.
Dr Watt: And, again, Senator, I would be happy to give you that information, but the point I am making is that it is not the right question.
Senator JOHNSTON: What is the right question?
Dr Watt: The right question, Senator, is: were there occasions when we did not progress things because of the run-up to the caretaker period?
Senator JOHNSTON: What were those projects?
Dr Watt: We will give you that information, Senator.
Senator JOHNSTON: So, off the top of your head, you do not know the projects but you are telling us to take this on faith and you are going to give us the answers on notice?
Dr Watt: We will take that on notice; that is correct.
Senator FAULKNER: I intend to follow this through a bit later, Dr Watt, but it is true to say, of course, that the caretaker period was—due to the circumstances in relation to the close election result—I think it is fair to say, much longer than anyone could possibly have anticipated. I intend to chase up one or two of these matters a little later in the hearing, but you might have for us the dates of the caretaker period. If you do not have them, I want to follow through at a later stage one of the issues that was raised during that period. But I think we can at least say that the caretaker period was not only the period from the issue writs through the campaign until what ordinarily occurs a week or so later, the swearing in of a ministry, but of course there was also quite a long period of time, the extended caretaker period, while negotiations were undertaken in relation to the formation of a government. I think that is a fair statement to make, don't you?
Dr Watt: I think that is a fair statement to make. We will get those dates for you.
Senator FAULKNER: This has some relevance, I suppose, to what Senator Johnston is asking, but I also want to raise other issues which are to some extent dependent on the caretaker period. Anyway, that is something that can be done over the break. It is not hard to find.
Senator JOHNSTON: Secretary, what is the amount of the significant underspend?
Dr Watt: The estimated underspend in 2010-11 is $1.6 billion.
Senator JOHNSTON: How many weeks were tied up in the election campaign? Was it seven or nine?
Dr Watt: I think we would say of the order of eight weeks.
Senator JOHNSTON: So eight weeks costs you—
Dr Watt: I did not say that it cost me the whole lot; I said it was a contributing factor.
Senator JOHNSTON: What other contributing factors were there?
Dr Watt: Again, we have talked about the fact that the Australian industry did not deliver as fast as we had forecast in relation to a major capital improvements program.
Senator JOHNSTON: On which one?
Dr Watt: I can get you that information.
Senator JOHNSTON: This is quite sizeable. So none of these projects spring to mind as being the ones that the industry is responsible for?
Dr Watt: We can certainly give you that information; in fact, I am sure Dr Gumley can come forward and give you that information now, if you would like it.
Senator JOHNSTON: I would like to know which projects we are talking about. So we have got the election and we have got—
Dr Watt: We can help you, Senator. Dr Gumley will be in shortly.
Senator JOHNSTON: Right.
Dr Watt: The slippage relates to slippage which is primarily due to the—
Senator JOHNSTON: It is major capital programs.
Dr Watt: Yes. The major projects slippage includes a multirail tanker and transport aircraft, multirail helicopters, the armed reconnaissance helicopter project, the high-capacity communications satellite project.
Senator JOHNSTON: Why has that slipped?
Dr Watt: I will get you that information. I do not have...
And later...
Senator TROOD: Thank you, CDF. I do not think you have convinced Senator Johnston that the election was a particularly important intervention, and you have not convinced me. I do not think the committee has had an answer to the question which project failed to be advanced because of the election. Which project was ready to go if the election had not been called when it was? Which project or several projects would have been through one of those committees had it not been for the election?
Air Chief Marshal Houston: I do not have those before me at the moment but the normal practice is that we have somewhere between four and six projects with each National Security Committee of cabinet. That is the normal process. That is what I have seen in my six years as CDF. From essentially the end of May last year through to October nothing moved. It was quite frustrating actually because nothing was happening because we were in caretaker mode for a very extended period of time.
Senator TROOD: Thanks, CDF. I apologise for taking so much time.
This reminds me of truffle hogs, except the hogs have more capability.
