Review flags 1000 jobs will go in a large-scale shake-up of Australia's defence force operations

F/A 18F Super Hornet. Photo: Quinn Rooney/Getty Images

Around 1000 jobs will be cut from the Australian defence force (ADF) as part of a significant structural overhaul, defence minister Kevin Andrews has announced.

The job losses are a result of significant changes outlined in the government’s First Principles Review of Defence, released this afternoon.

The new minister, who replaced David Johnston in December, said the review, led by former Rio Tinto boss David Peever, identified a range of deficiencies that “need to be urgently addressed”.

Peever was damning in his assessment of the military’s current structure. The report says there is a “proliferation of structures, processes and systems with unclear accountabilities” that led to “institutionalised waste, delayed decisions, flawed execution, duplication, over-escalation of issues for decision and low engagement levels amongst employees in parts of the organisation”.

Andrews said the government accepted 75 of the review’s 76 recommendations to form a “single integrated organisation” and plans to implement the changes within two years.

The review suggests winding up the government’s Defence Materiel Organisation — which purchases and maintains Australia’s military equipment — and re-integrate it as a new “independent and commercialised” body within the ADF with a focus on contract management.

But the government rejected a proposal to make the Defence Science and Technology Organisation part of the new Capability and Acquisition Group, but Andrews said they will reconsider it in 12 months

“There needs to be a better balance between operational excellence and organisational effectiveness,” Andrews said.

Around 13,000 people are in the ADF’s corporate workforce, but the review recommends that “as many functions as possible be performed by public servants or outsourced if they are transactional in nature.”

The review seeks to cut employee costs by 2.5% over the next four years to 35% of the total defence budget. The wages bill for ADF and APS personnel currently stands at about $11 billion.

The defence budget for 2014-15 $29.4 billion.

The review comes as the government looks at spending more than $20 billion on overseas-built submarines to replace the aging Collins class fleet.

It’s also spending more than $12 billion on 72 F-35 joint strike force fighter planes, although the project has been plagued by delays, cost overruns and technical problems.

Last month, in a surprise move following protracted and bitter negotiations over defence pay, prime minister Tony Abbott offered troops an extra 0.5% in their pay packets in a bid to boost morale and the government’s standing with the armed forces.

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