Plan to make Australia one of top 10 global defence exporters not backed by data, audit finds

By Shannon Jenkins

Monday September 14, 2020

Scott Morrison and Defence Minister Linda Reynolds walk past a Boxer Combat Reconnaissance Vehicle as they arrive to speak during the launch of the 2020 DefenceStrategic Update at the Australian Defence Force Academy in Canberra, Wednesday, July 1, 2020. (AAP Image/Lukas Coch)

The Department of Defence’s strategy to make Australian defence exports among the best in the world has not been informed by robust defence export data, the Australian National Audit Office has found.

The government’s 2018 Defence Export Strategy was created to implement recommendations made by the Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade. It set out five objectives for the development of defence exports by 2028, including to grow Australia’s defence industry to become a top 10 global defence exporter.

Under the strategy, an Australian Defence Export Office was created to work with Austrade and the Centre for Defence Industry Capability, and $20 million per year was allocated to implement the strategy.

The design process of the strategy was largely effective, ANAO has found, but strategy implementation and monitoring and reporting on implementation was only partially effective.

While Defence consulted with relevant stakeholders to design the strategy, “not all elements of the strategy had a firm evidentiary basis”, the audit report noted, and the department was unable to meet the then defence industry minister Christopher Pyne’s timeframes for finalising the strategy.

“The strategy objectives and initiatives developed by Defence were largely supported by research and consultation but were not informed by robust defence export data,” the report said.

“The inclusion of objective five — growing Australia’s defence industry to become a top ten global defence exporter — reflects an announcement by the minister for defence industry, and was not supported by analysis or data.”

Adequate planning arrangements to support implementation of the strategy initiatives on time and on budget were not established, and has not tracked expenditures relating to the strategy as a whole, the audit found.

“Of the eight phase one key milestones, Defence has delivered two initiatives on time, delivered four initiatives between five days and six months late, and not yet completed two initiatives. Defence does not monitor the phase one budget at an initiative level,” the report said.

“Of the three phase two initiatives, one initiative was not delivered on time. It is not possible to assess the timeliness for the remaining two initiatives because the strategy does not set out what completion of the initiative would involve. Defence does not monitor the phase two budget at an initiative level.”

The report noted that while the department had some arrangements in place for monitoring and reporting on implementation, it lacked effective arrangements for measuring the achievement of defined objectives.

“Defence has not established a performance framework or effective reporting arrangements to measure progress towards achieving the strategy’s overarching goal and objectives and, as a result, the extent to which these have been achieved is not clear,” it said.

“Formal reporting on implementation progress to the minister and Defence senior leaders has been limited.”

The audit found that as of June 2020, Defence had not established baseline data for defence exports or a methodology for measuring defence exports.

While there has been public reporting on the progress of some strategy initiatives, the report noted that there has been no reporting or publicly available information on Defence’s achievement towards strategy objectives.

The auditor general recommended Defence extend the strategy’s performance framework and develop an evaluation framework to measure and report on the achievement of overarching goal and objectives, to which the department has agreed.

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