Fewer ‘rat catchers’ risk Defence paralysis

22 April 2025 | Jennifer Parker

*Originally published in the Australian Financial Review on 22 April 2025 as part of their election 'Policy Pitch' series

'The Australian Financial Review asked prominent people to propose one policy initiative they believe political parties should pledge to do, should they win the election'. Here's my pitch.

Image: Originally published in the Australian Financial Review

What’s the pitch? Talk on Defence in the last term and into the election has focused on capability, workforce and spending. While an important issue, absent from the discussion, has been the structure of Defence.

Whoever forms the next government will face the formidable task of reshaping the structure of the Australian Defence Force and the Department of Defence to ensure readiness for any potential crisis or conflict in our region.

The ADF – the army, navy and airforce – and the Department of Defence were formed in 1976 following the influential Tange reviews.

The structure of the ADF has developed over time, with the forming of the Joint Operations Command in 2004 to manage ADF operations across the three services, and the Joint Capabilities Group in 2017. The Department of Defence has undergone several structural changes since its inception

Subsequent reviews have expanded the Defence bureaucracy to meet peacetime requirements, most notably through the 2015 First Principles Review. While that review aimed to streamline Defence and ensure it was fit for purpose, it instead entrenched a cumbersome committee system and reduced accountability among key decision-makers.

A decade on, the department’s structure has further morphed, now comprising 14 groups, and the roles of the army, navy, and air force chiefs have been diminished. Although these measures may reduce peacetime risk, they risk paralysing decision-making in a crisis or conflict.

Why is it needed? Military strategists have long warned that prolonged peace can breed excessive bureaucracy, as illustrated by the Royal Navy’s challenges at the Battle of Jutland during World War I – sparking the famous rat-catchers or regulators debate [leaders who are willing to break conventions to achieve a goal, versus those who are cautious and rule-bound].

Although Australia has participated in conflicts over the past 80 years, they were distant engagements of choice. A conflict in the Indo-Pacific, however, would demand a far more agile Defence structure, with whole-of-nation and whole-of-government co-ordination.

To prepare, we must streamline the Defence portfolio: reduce unnecessary hierarchy, empower the service chiefs, limit committee influence, increase spending ceilings of key leaders and delegate authority down. A concise, focused review should ensure clear accountability, a solid chain of command, greater agility in decision-making at lower levels, with decision-making geared toward the needs of any future crisis or conflict. This will develop a more resilient and self-reliant Defence structure.

How much would it cost? Optimising our Defence structure to match current strategic circumstances is far less expensive than acquiring major new military hardware.

In 2018, for example, the Department of Defence informed a parliamentary inquiry that it had spent approximately $245 million on consultancies to implement reforms from the First Principles Review.

While that figure doesn’t necessarily indicate the cost of a new structural review today – and outsourcing is not ideal – it gives an order of magnitude cost.

What would you scrap to pay for it? In this instance, Defence itself is best placed to determine how it should be organised for future crises or conflicts rather than another external review. Ultimately, the benefits of streamlining our Defence structure would likely far outweigh the costs.

Importantly, business as usual activities – particularly acquisitions – must continue throughout the review, so we don’t lose critical preparation time for potential crises.

Naturally, such a review will consume valuable decision-making capacity, potentially posing a greater cost than mere dollars. Still, to realise its benefits, it must be prioritised over other initiatives – possibly including some workforce measures.

If done correctly, however, it should ultimately generate greater workforce capacity, but it will also ensure the organisation is better prepared for potential crises or conflicts – a lesson we don’t want to learn the hard way once a crisis hits.