department of defence · 2016. 2. 4. · the first principles review wasannounced by the then...

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Department of Defence

Entity Resources and Planned Performance

Section 1: Defence Overview and Resources

1.1 Strategic Direction Statement

1.2 Defence Resource Statement

1.3 Budget Measures

1.4 Capital Investment Programme

1.5 People

Section 2: Defence Outcomes and Planned Performance

2.1 Outcomes and Performance Information

Section 3: Defence Explanatory Tables and Budgeted Financial Statements

3.1 Explanatory Tables

3.2 Resource Summary

3.3 Budgeted Financial Statements

Defence Portfolio Additional Estimates Statements 2015-16

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DEPARTMENT OF DEFENCE

Section 1: Defence Overview and Resources

1.1 STRATEGIC DIRECTION STATEMENT

The following changes have been made to the Strategic Direction Statement since the Portfolio Budget Statements 2015-16:

A new Defence White Paper will be released in early 2016. The White Paper will set out the Government’s strategic direction for Defence, and will be accompanied by a ten-year Integrated Investment Programme and a new Defence Industry Policy Statement. The First Principles Review was announced by the then Minister for Defence on 1 April 2015. The focus of the review was on ensuring Defence is fit for purpose, its business structures support the Australian Defence Force and it can deliver on future requirements, which will be outlined in the forthcoming Defence White Paper.

The Government agreed or agreed-in-principle to 75 of the 76 recommendations. A two year implementation timeframe has been agreed. In combination, the recommendations will change the structure, governance arrangements, accountabilities, processes and systems of Defence. The combined effect will be a more unified and integrated organisation that is more consistently linked to its strategy and clearly led by its centre. It will involve:

• a stronger and more strategic centre able to provide clear direction, contestability of decision making, along with enhanced organisational control of resources and monitoring of organisational performance;

• an end-to-end approach for capability development with capability managers having clear authority and accountability as sponsors for the delivery of capability outcomes on time and to budget, supported by an integrated capability delivery function and subject to stronger direction setting and contestability from the centre;

• enablers that are integrated and customer-centric with greater use of cross-functional process, particularly in regional locations; and

• a planned and professional workforce with a strong performance management culture at its core.


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1.2 DEFENCE RESOURCE STATEMENT

Table 2: Total Defence Resourcing

Seria

l No.

2014-15Actual$'000

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

2016-17Forward Estimate

$'000


$'000


$'000Defence resourcing

1 26,082,690 Appropriation for departmental outcomes 28,976,236 29,162,834 186,598 0.6 28,648,671 29,796,729 30,737,6102 2,758,491 Equity injection appropriation 2,875,209 2,942,959 67,750 2.4 2,750,832 4,118,229 5,677,4383 - Prior year appropriation - - - - - - -4 28,841,181 Current year's appropriation (1 + 2 + 3) 31,851,445 32,105,793 254,348 0.8 31,399,503 33,914,958 36,415,0485 - Draw down of appropriations carried forward - - - - - - -6 - Other appropriation receivable movements - 134,704 134,704 - - - -7 -2,410 Return to the Official Public Account[1] 11,817 -875 -12,692 -107.4 -897 -919 -9428 -2,410 Funding from / to the OPA (5 + 6 +7) 11,817 133,829 122,012 - -897 -919 -9429 28,838,771 Funding from Government (4 + 8) 31,863,262 32,239,622 376,360 1.2 31,398,606 33,914,039 36,414,106

10 98,325 Capital receipts 226,974 226,979 5 - 44,984 57,634 42,05111 932,300 Own source revenue (s74 receipts)[2] 605,115 511,904 -93,211 -15.4 494,735 507,803 527,25112 - Prior year receipts - - - - - - -13 1,030,625 Funding from other sources (10 + 11 + 12) 832,089 738,883 -93,206 -11.2 539,719 565,437 569,30214 29,869,396 Total Defence funding (9 + 13) 32,695,351 32,978,505 283,154 0.9 31,938,325 34,479,476 36,983,408

Administered15 2,247,123 Administered special appropriations 5,230,392 5,205,729 -24,663 -0.5 5,332,023 5,471,510 5,623,19716 1,518,020 Own source revenue 1,477,817 1,462,042 -15,775 -1.1 1,351,289 1,272,784 1,206,90317 -1,518,020 Returns to the Official Public Account -1,477,817 -1,462,042 15,775 -1.1 -1,351,289 -1,272,784 -1,206,90318 2,247,123 Total Administered funding (15 + 16 + 17) 5,230,392 5,205,729 -24,663 -0.5 5,332,023 5,471,510 5,623,19719 32,116,519 Total Defence resourcing (14 + 18) 37,925,743 38,184,234 258,491 0.7 37,270,348 39,950,986 42,606,605

Appropriation carried forward

20 195,419Appropriation receivable including previous year's outputs 171,222 10,166 -161,056 -94.1 10,166 10,166 10,166

21 44,150 Cash in bank 142,732 11,530 -131,202 -91.9 11,530 11,530 11,53022 239,569 Total appropriations carried forward (20 + 21) 313,954 21,696 -292,258 -93.1 21,696 21,696 21,696

Notes

2. All figures are net of GST.1. Represents net transfers to and from the Official Public Account.


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Annual Appropriations

Table 3: Appropriation Bill (No 3) 2015-16

2014-15 Available

$'000

2015-16 Budget

Estimate $'000

2015-16 Revised

Estimate $'000

Increase in Estimates

$'000

Decrease in Estimates

$'000Departmental OutputsOutcome 1Australia's national interests are protected and advanced through the provision of military capabilities and the promotion of security and stability 25,492,580 28,063,724 28,250,281 186,557 -Outcome 2Military operations and other tasks directed by the Government to achieve the desired results 789,002 863,807 863,852 45 -Outcome 3Defence's support to the Australian community and civilian authorities to achieve the desired results 67,740 48,705 48,701 - 4Total 26,349,322 28,976,236 29,162,834 186,602 4

Table 4: Appropriation Bill (No 4) 2015-16

2014-15 Available

$'000

2015-16 Budget

Estimate $'000

2015-16 Revised

Estimate $'000

Increase in Estimates

$'000

Decrease in Estimates

$'000Non-operating Equity injections 2,758,491 2,875,209 2,942,959 67,750 -Total non-operating 2,758,491 2,875,209 2,942,959 67,750 -


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Drawdown of Appropriations Carried Forward

Table 5: Revised Appropriation Receivable

2015-16Revised

Estimate$'000


$'000


$'000


$'000Portfolio Budget Statements 2015-16 Estimates - - - -

Net movement 10,166 10,166 10,166 10,166Closing balance appropriation receivable 10,166 10,166 10,166 10,166

Funding from Other Sources

Own Source Revenue

Table 6: Variation in Own Source Revenue

2015-16Revised

Estimate$'000


$'000


$'000


$'000Portfolio Budget Statements 2015-16 Estimates 605,115 556,207 580,640 612,615Variation in own source revenue -93,211 -61,472 -72,837 -85,364Own source revenue revised estimates 511,904 494,735 507,803 527,251Prior year receipts - - - -Total 511,904 494,735 507,803 527,251


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1.3 BUDGET MEASURES

2015-16 Budget Measures and Other Budget Adjustments

Table 7: Variation to Defence Funding

Programme2015-16

$m2016-17

$m2017-18

$m2018-19

$mDepartmental Budget measuresExpenditure measuresClosure of Hunter River and Port Stephens Fisheries - Assistance to Individuals and Businesses [1] 1.10 - - - -Operation Okra [2] 2.2 - - - -Total Departmental Budget Measures - - - -Other budget adjustmentsForeign Exchange Various 253.5 299.0 312.4 420.1School Pathways Programme Transfer to Treasury 1.8 -1.3 - - -Public Sector Superannuation Accumulation Plan Administration Fees 1.12 -1.3 -1.3 -1.3 -1.3Return of Funds to Defence for the Geocoded National Address File 1.11 0.4 0.1 0.1 0.1Funding for ADF Super Establishment Costs 1.12 3.0 3.0 - -Total Other Departmental Budget Adjustments 254.3 300.9 311.2 418.9Variation to Defence Departmental Funding 254.3 300.9 311.2 418.9

Notes

2. The cost of this measure will be met from within existing resourcing of the Department of Defence.

1. The Government will provide $2.6m in 2015-16 for targeted assistance to eligible fishers and businesses affected by the closure of Hunter River and Port Stephens fisheries. The cost of this measure will be met from within existing resourcing of the Department of Defence.


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Operations Summary

Table 8: Net Additional Cost of Operations from 1999-00 to 2018-19

1999-00 to 2014-15

Actual Result$m

2015-16Revised

Estimate$m

2016-17ForwardEstimate

$m


$m


$mTotal

$mOperation Astute 4,312.0 - - - - 4,312.0Operation Bel Isi 47.7 - - - - 47.7Operation Slipper 7,177.3 121.9 103.9 - - 7,403.1Operation Manitou 39.4 43.2 2.2 0.5 - 85.3Operation Accordion 123.5 191.0 1.4 0.6 - 316.5Operation Highroad 40.5 115.1 11.3 7.9 - 174.9Operation Resolute 220.0 48.7 5.7 - - 274.4Operation Catalyst 2,364.5 - - - - 2,364.5Operation Okra 159.4 390.8 17.5 10.0 - 577.7Operation Anode 355.2 - - - - 355.2Operation Sumatra Assist 44.5 - - - - 44.5Operation Acolyte 10.5 - - - - 10.5Operation Deluge 6.7 - - - - 6.7Operation Pakistan Assist 9.8 - - - - 9.8Operation Outreach 14.6 - - - - 14.6Operation Kruger 45.3 - - - - 45.3Operation Southern Indian Ocean 11.9 - - - - 11.9Enhanced Force Protection in Afghanistan 540.0 - - - - 540.0Defence Support to 2014 G20 Summit 3.6 - - - - 3.6

Total Net Additional Costs 15,526.5 910.7 142.1 19.1 - 16,598.3Sources of Funding for Operations

Government Supplementation 13,891.0 910.7 142.1 19.1 - 14,962.8Department of Foreign Affairs and Trade 9.1 - - - - 9.1Department of Defence (Absorbed) 1,626.4 - - - - 1,626.4

Total Cost 15,526.5 910.7 142.1 19.1 - 16,598.3


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1.4 CAPITAL INVESTMENT PROGRAMME

Table 9: Capital Investment Programme

Seria

l No. 2015-16

BudgetEstimate

$m

2015-16Revised

Estimate$m

Variation$m

1 Defence Capability Plan (DCP) 885.5 284.8 -600.72 Approved Major Capital Investment Programme 6,157.9 6,280.5 122.63 Capital Facilities Programme 1,278.5 1,082.2 -196.34 ICT Investment Plan 415.3 489.7 74.45 Minors Programme 164.4 87.9 -76.56 Other Investment[1] 893.9 1,056.2 162.37 Total Capital Investment Programme 9,795.4 9,281.3 -514.1

1. Includes purchases of plant and equipment, and the capital component of repairable items within the capability sustainment programme. Note

Table 10: Capability Sustainment Programme

Seria

l No. 2015-16

BudgetEstimate

$m

2015-16Revised

Estimate$m

Variation$m

Current Sustainment1 Navy Sustainment 2,066.3 2,077.5 11.22 Army Sustainment 1,584.4 1,578.5 -5.93 Air Force Sustainment 2,255.0 2,230.0 -25.04 Chief Information Officer Sustainment 694.9 597.4 -97.55 Vice Chief of the Defence Force Sustainment 57.6 60.5 2.96 Strategy Sustainment 21.4 21.4 -7 Joint Operations Command Sustainment 6.8 7.1 0.38 Estate & Infrastructure Group Sustainment[1] 655.4 1,395.9 740.5

Future Sustainment (NPOC)9 Future Sustainment Costs associated with AMCIP, ICT and Facilities 266.4 58.2 -208.2

10 Total Sustainment 7,608.2 8,026.4 418.3

1. The 2015-16 Budget Estimate included Estate Maintenance costs only. The 2015-16 Revised Estimate includes costs for Estate Maintenance, Garrison Support and associated services.

Note


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Table 11: Retained Net Capital Receipts

Seria

l No. 2015-16

BudgetEstimate

$m

2015-16Revised

Estimate$m

Variation$m

Property SalesProceeds from the sale of land and buildings 183.3 63.3 -120.0Proceeds from the sale of housing 13.1 13.1 -Total proceeds from the sale of property 196.4 76.4 -120.0Costs from the sale of property[1] -26.4 -26.4 -

1 Net property proceeds retained by Defence 169.9 49.9 -120.02 Proceeds from sale of specialist military equipment 7.5 7.5 -3 Proceeds from sale of infrastructure, plant and equipment 23.1 23.1 -4 Retained Capital Receipts (1+2+3) 200.5 80.5 -120.0

Note1. Costs from the sale of property include remediation works.

Table 12: Variation in Estimates of Net Capital Receipts

2015-16Revised

Estimate$m


$m


$m


$mPortfolio Budget Statements 2015-16 Estimates 200.5 -44.0 -33.7 41.7

Movement in proceeds from sales associated with the capital disposal programme -120.0 - - -Variation in Net Capital Receipts -120.0 - - -Total Net Capital Receipts 80.5 -44.0 -33.7 41.7


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1.5 PEOPLE

Workforce Overview

ADF Workforce

No significant change from the Portfolio Budget Statements 2015-16.

Civilian Workforce

In line with Government commitments, Defence continues to reduce its Australian Public Service (APS) workforce through natural attrition, disciplined recruiting practices and a limited Voluntary Redundancy program aimed at reducing the number of staff at middle management levels.

Implementation of the recommendations of the 2015 First Principles Review, Creating One Defence, continues to reshape Defence’s structures, systems and processes. This will inform the size and shape of Defence’s APS workforce in coming years, and work is progressing to develop a strategic workforce plan outlining the distribution, skill requirements and other details of the workforce.

The tables below show the APS workforce reaching 17,500 by the end of 2015-16 before stabilising at an indicative 17,800 from 2016-17. The forthcoming Defence White Paper and Force Structure Review will influence the size and shape of Defence’s workforce, as each of these Reviews may change the workforce allocation for a range of capabilities over the coming years.

Table 13: End of Financial Year Full Time Equivalent (FTE) Estimates for 2015-16 and the Forward Estimates

Actual Full Time Equivalent as at

EOFY

2015-16 Full Time

Equivalent Forecast Outcome Variation

2016-17 Forward estimate



Total APS 17,900.0 17,500 -400.0 17,800 17,800 17,800


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Workforce Summary

The total Defence fulltime workforce average, is now forecast to be 76,548 in 2015-16, comprising:

• Permanent Forces (76 per cent) of:

– 14,249 Navy Personnel

– 29,648 Army Personnel

– 14,172 Air Force Personnel

• 18,100 APS staff (24 per cent)

• 379 Contractors (less than 1 per cent)

The revised forecast for the Reserve Forces in 2015-16 is 915,000 days of service provided by 19,360 members.

Over the forward estimates period, the total fulltime average workforce will grow by 1,252 from the forecast of 76,548 in 2015-16 to 77,800 in 2018-19. The number of days served by the Reserve workforce will increase by 25,000 from 915,000 to 940,000.

The total planned strength of the Defence workforce is shown in Tables 14 and 15, while a breakdown by Service and rank or level appears at Table 16.

Defence People

No changes have been made to the Defence People section since the Portfolio Budget Statements 2015-16.

Table 14: Planned Workforce Allocation for the 2015-16 Budget and Forward Estimates—Average Fulltime[1]

2015-16Budget

Estimate

2015-16Revised

Estimate Variation

2016-17Forward

Estimate[2]

2017-18Forward

Estimate[2]

2018-19Forward

Estimate[2]

ADF Permanent Force[3]

Navy 14,238 14,249 11 14,368 14,416 14,350Army 29,528 29,648 120 30,839 31,016 31,017Air Force 14,216 14,172 -44 14,368 14,261 14,139

1 Total Permanent Force 57,982 58,069 87 59,575 59,693 59,506Civilian Employees

APS 18,380 18,100 -280 17,800 17,800 17,800Contractors[4] 484 379 -105 490 488 494

2 Total Civilian Employees 18,864 18,479 -385 18,290 18,288 18,294Total Workforce Strength (1 + 2) 76,846 76,548 -298 77,865 77,981 77,800

3. Numbers for ADF Permanent Force include Reservists on Continuous Full Time Service.4. Contractors are individuals under contract performing agency roles. Contractors are not APS employees.

Notes1. All numbers for the fulltime workforce elements represent average fulltime equivalents.2. Revised Estimates figures represent forecast 2015-16 achievement for each element of the fulltime workforce, while Forward Estimates figures represent the Government approved strength for each year.


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Table 15: Planned Workforce Allocation for the 2015-16 Budget and Forward Estimates—Reserve [1][2]

2015-16Budget

Estimate: days served

(members paid)

2015-16Revised


(members paid) Variation

2016-17Forward


2017-18Forward


2018-19Forward


Active Reserve Force80,000 80,000 - 86,400 90,000 90,000-1,760 -1,760 - -1,900 -2,000 -2,000

595,000 650,000 55,000 650,000 650,000 650,000-14,000 -14,500 -500 -14,500 -14,500 -14,500162,000 172,000 10,000 175,000 180,000 182,000

-2,830 -2,850 -20 -2,820 -2,780 -2,740837,000 902,000 65,000 911,400 920,000 922,000-18,590 -19,110 -520 -19,220 -19,280 -19,240

High Readiness Reserve 14,000 13,000 -1,000 15,000 16,500 18,000

-270 -250 20 -280 -320 -360

14,000 13,000 -1,000 15,000 16,500 18,000

-270 -250 20 -280 -320 -360851,000 915,000 64,000 926,400 936,500 940,000-18,860 -19,360 -500 -19,500 -19,600 -19,600

Navy

Army

Air Force

1

Air Force

Sub-total Active Reserve Force

2. Table 15 includes the High Readiness Reserve Force, Active Reserve Force and Specialist Reserve Force. Reservists on full-time service in the Permanent Forces are not included in Table 15, only in Table 14.

Notes1. As the number of days or hours worked by Reserve members can vary greatly, figures in Table 15 show the total number of days’ service rendered, with a headcount of members rendering paid service in brackets.

Total Reserves (1 + 2)

Sub-total high Readiness Reserve Force2


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Table 16: Breakdown of Average Personnel Numbers by Service and Rank [1]

2015-16Budget

Estimate

2015-16Revised

EstimateNavyOne Star and above 56 56Senior Officers[2] 620 604Officers 2,841 2,808Other Ranks 10,721 10,781Total Navy 14,238 14,249ArmyOne Star and above 79 75Senior Officers[2] 834 839Officers 5,587 5,530Other Ranks 23,028 23,204Total Army 29,528 29,648Air ForceOne Star and above 53 55Senior Officers[2] 660 685Officers 4,302 4,200Other Ranks 9,201 9,232Total Air Force 14,216 14,172APSSenior Executives[3] 155 149Senior Officers[2] 6,012 5,851Other APS Staff 12,213 12,100Total APS 18,380 18,100ContractorsContractors[4] 484 379Total Workforce 76,846 76,548

Notes

4. Contractors are individuals under contract performing agency roles. Contractors are not APS employees.

1. Permanent Forces and APS numbers are forecasts of the average strength for 2015-16.2. Senior Officers are of Colonel or Lieutenant Colonel rank equivalent and APS Executive Level 1 and 2 and Science and Technology Grades 5 to 8.

3. Revised Estimate figure for the Senior Executive Service includes the Secretary of the Department of Defence, 12 Chiefs of Division and 2 Medical Officers Grade 6.


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Section 2: Defence Outcomes and Planned Performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programmes are the primary vehicle by which Government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programmes which contribute to Government outcomes over the Budget and forward years.

Each outcome is described below together with its related programmes, specifying the performance indicators and targets used to assess and monitor the performance of the Department of Defence in achieving Government outcomes.

Figure 3: Structure of Defence’s Outcomes

DEFENCE

Outcome 1 The protection and advancement of

Australia’s national interests through the provision of military capabilities and the

promotion of security and stability

Outcome 2 The advancement of Australia’s

strategic interests through the conduct of military operations and other tasks

as directed by Government

Outcome 3 Support to the Australian community and civilian authorities as requested

by Government

Departmental Programmes

Programme 1.1 Strategy

Programme 1.2 Navy

Capabilities

Programme 1.3 Army

Capabilities

Programme 1.4 Air Force

Capabilities

Programme 1.5 Joint Operations

Command

Programme 1.6 Intelligence

Capabilities

Programme 1.7 Vice Chief of the

Defence Force

Programme 1.8 Capability

Acquisition and Sustainment

Programme 1.10 Estate and

Infrastructure

Programme 1.11 Chief Information

Officer

Programme 1.9 Defence Executive

Support

Programme 1.13 Defence Science

and Technology

Programme 1.14 Capability

Development

Programme 1.12 Defence People

Programme 1.15 Chief Finance

Officer

Programme 1.17 Defence Force Superannuation

Nominal Interest

Programme 1.18 Housing

Assistance


Benefits

Programme 1.19 Other

Administered



Programme 2.1 Operations

Contributing to the Security of the

Immediate

Neighbourhood

Programme 2.2 Operations Supporting

Wider Interests

Programme 3.1 Defence Contribution to National Support

Tasks in Australia

Administered Programmes


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Outcome 1: The protection and advancement of Australia’s national interests through the provision of military capabilities and the promotion of security and stability

Outcome 1 Strategy

The following changes have been made to this outcome strategy since the Portfolio Budget Statements 2015-16:

delivering on the Government’s commitment to release a Defence White Paper.


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Outcome 1 Resources

Table 17: Total Budgeted Resources Available for Outcome 1

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000


$'000


$'000


$'000Programme 1.1 StrategyRevenues from other sources 434 441 7 434 428 439Departmental outputs 175,385 172,222 -3,163 172,520 182,621 199,708Programme 1.2 Navy CapabilitiesRevenues from other sources 125,611 87,719 -37,892 81,918 83,382 84,714Departmental outputs 5,208,839 5,427,010 218,171 5,462,891 5,100,912 5,131,328Programme 1.3 Army CapabilitiesRevenues from other sources 111,768 45,598 -66,170 42,769 43,854 44,905Departmental outputs 6,774,894 7,336,484 561,590 7,035,337 6,594,914 6,558,377Programme 1.4 Air Force CapabilitiesRevenues from other sources 190,900 73,685 -117,215 74,556 75,552 76,126Departmental outputs 5,505,105 5,613,051 107,946 5,401,622 5,407,828 5,408,152Programme 1.5 Joint Operations CommandRevenues from other sources - - - - 555 557Departmental outputs 50,452 48,352 -2,100 48,800 55,276 49,822Programme 1.6 Intelligence CapabilitiesRevenues from other sources 12,073 2,154 -9,919 2,200 2,212 2,464Departmental outputs 641,560 564,502 -77,058 571,029 558,285 591,743Programme 1.7 Vice Chief of the Defence ForceRevenues from other sources 348,585 228,310 -120,275 234,038 244,517 255,395Departmental outputs 1,197,436 1,152,836 -44,600 1,209,553 1,221,869 1,245,866Programme 1.8 Capability Acquisition and Sustainment[1]

Revenues from other sources 917 2,596 963 2,727Departmental outputs 613,744 677,991 704,322 720,779Programme 1.9 Defence Executive SupportRevenues from other sources 116 9,692 9,576 9,912 10,097 10,321Departmental outputs 119,050 193,355 74,305 184,797 179,798 183,021Programme 1.10 Estate and InfrastructureRevenues from other sources 371,810 372,945 1,135 355,590 378,688 380,985Departmental outputs 3,955,552 4,059,148 103,596 3,853,278 4,439,769 4,209,936Programme 1.11 Chief Information OfficerRevenues from other sources 1,983 2,064 81 2,969 3,059 3,147Departmental outputs 1,147,300 1,037,617 -109,683 1,059,048 1,196,971 1,110,196Programme 1.12 Defence PeopleRevenues from other sources - - - - - -Departmental outputs 446,297 485,277 38,980 474,559 462,893 471,791Programme 1.13 Defence Science and TechnologyRevenues from other sources 32,744 4,145 -28,599 4,257 4,495 4,751Departmental outputs 431,649 443,532 11,883 416,726 395,533 387,238Programme 1.14 Capability DevelopmentRevenues from other sources 21,938 17,693 -4,245 22,073 27,035 32,628Departmental outputs 1,433,761 865,048 -568,713 1,775,044 3,110,224 4,298,791Programme 1.15 Chief Finance OfficerRevenues from other sources 6,059 5,056 -1,003 5,159 5,283 5,617Departmental outputs 976,444 238,103 -738,341 160,806 166,456 170,862


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Table 17 (Continued): Total Budgeted Resources Available for Outcome 1

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000


$'000


$'000


$'000Programme 1.16 Defence Force Superannuation BenefitsDefence Force Retirement Benefits Act, 1948 Part 1, s.15D and VIC, s.82ZJ (1) - - - - - - Defence Force Retirements and Death Benefits Act, 1973 Part XII, s.125 (3) 99,981 99,981 - 89,237 78,071 67,347Military Superannuation and Benefits Act, 1991 Part V, s.17 1,453,170 1,445,028 -8,142 1,404,658 1,379,279 1,362,929Total Administered expenses 1,553,151 1,545,009 -8,142 1,493,895 1,457,350 1,430,276Administered revenues from other sources 1,347,113 1,336,145 -10,968 1,221,423 1,152,008 1,084,574Total Programme 1.16 206,038 208,864 2,826 272,472 305,342 345,702Programme 1.17 Defence Force Superannuation Nominal InterestDefence Force Retirement Benefits Act, 1948 Part 1, s.15D and VIC, s.82ZJ (1) 25,542 25,542 - 24,248 22,980 21,744Defence Force Retirements and Death Benefits Act, 1973 Part XII, s.125 (3) 1,772,645 1,772,645 - 1,788,588 1,802,054 1,812,804Military Superannuation and Benefits Act, 1991 Part V, s.17 1,759,277 1,759,277 - 1,913,665 2,070,851 2,231,171Total Administered expenses 3,557,464 3,557,464 - 3,726,501 3,895,885 4,065,719Administered revenues from other sources - - - - - -Total Programme 1.17 3,557,464 3,557,464 - 3,726,501 3,895,885 4,065,719Programme 1.18 Housing AssistanceDefence Force (Home Loan Assistance) Act , 1990 Part IV, s.38 1,116 917 -199 775 645 537Defence Home Ownership Assistance Scheme Act 2008 Part VI, s.84 118,661 102,339 -16,322 110,852 117,630 126,665Total Administered expenses 119,777 103,256 -16,521 111,627 118,275 127,202Administered revenues from other sources 14,416 13,871 -545 15,644 16,440 17,236Total Programme 1.18 105,361 89,385 -15,976 95,983 101,835 109,966Programme 1.19 Other AdministeredAdministered revenues from other sources 112,814 121,010 8,196 106,065 97,110 109,290Total Programme 1.19 -112,814 -121,010 -8,196 -106,065 -97,110 -109,290Total resourcingTotal Departmental outputs 28,063,724 28,250,281 186,557 28,504,001 29,777,671 30,737,610Total Administered 3,756,049 3,734,703 -21,346 3,988,891 4,205,952 4,412,097Total Departmental revenue from other sources 1,224,021 850,419 -373,602 838,471 880,120 904,776Total Administered revenue from other sources 1,474,343 1,471,026 -3,317 1,343,132 1,265,558 1,211,100Equity injec ion 2,875,209 2,942,959 67,750 2,750,832 4,118,229 5,677,438Total resources for Outcome 1 37,393,346 37,249,388 -143,958 37,425,327 40,247,530 42,943,021

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded with resources being transferred into Defence to the newly formed Programme 1.8 Capability Acquisition and Sustainment from 2015-16 onwards.


31

Contributions to Outcome 1

Programme 1.1: Strategy

Performance information is as reported in the Portfolio Budget Statements 2015-16 except for the following revisions.

Programme 1.1 Objective

The Strategy Group provides policy advice on the central issues of Australia's defence policy, including ADF operations, international defence relations, industry policy, arms control, and defence export controls.

Table 18: Cost Summary for Programme 1.1 Strategy

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

30,281 31,161 880 26,263 25,105 24,441

Suppliers 139,925 135,785 -4,140 141,074 152,111 169,715

Grants 4,309 4,686 377 4,418 4,482 4,595

Depreciation and amortisation 1,304 1,031 -273 1,199 1,351 1,396

Finance cost - - - - - -

Write-down of assets and impairment of assets - - - - - -

Net losses from sale of assets - - - - - -

Other expenses - - - - - -

Total expenses 175,819 172,663 -3,156 172,954 183,049 200,147

Income

Revenues

Goods and services 434 434 - 426 420 430

Other revenue - 2 2 2 2 3

Total revenue 434 436 2 428 422 433

Gains

Reversal of previous asset write-downs - - - - - -

Net gains from sale of assets - 5 5 6 6 6

Other gains - - - - - -

Total gains - 5 5 6 6 6

Total income 434 441 7 434 428 439

Programme 1.1 Strategy 175,385 172,222 -3,163 172,520 182,621 199,708

Note

1. Employee expenses in 2015-16 include funding for an additional pay (the 27th pay).

Programme 1.1 Deliverables

Lead the development of the Defence White Paper and Defence Industry Policy Statement.

Manage the Defence-industry relationship, ensuring alignment of industry programs with Defence capability requirements and manage innovation programs.

Administer the use of co-existence, by way of the time-share model, in the Woomera Prohibited Area.


32

Programme 1.2: Navy Capabilities

Performance information is as reported in the Portfolio Budget Statements 2015-16 except for the

following revisions.

Table 19: Cost Summary for Programme 1.2 Navy Capabilities

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

2,087,777 2,111,348 23,571 2,022,032 2,026,793 2,045,111

Suppliers 2,257,163 2,318,163 61,000 2,257,926 2,289,253 2,385,124

Grants - - - - - -

Depreciation and amortisation 834,754 933,790 99,036 1,093,361 697,437 613,680

Finance cost 30,982 9,856 -21,126 33,128 36,571 43,296

Write-down of assets and impairment of assets 123,774 141,572 17,798 138,362 134,240 128,831



Total expenses 5,334,450 5,514,729 180,279 5,544,809 5,184,294 5,216,042

Income

Revenues

Goods and services[2]

71,973 23,774 -48,199 24,497 25,233 25,982

Other revenue 31,623 38,223 6,600 31,839 32,777 33,699

Total revenue 103,596 61,997 -41,599 56,336 58,010 59,681

Gains

Reversal of previous asset write-downs 22,015 25,722 3,707 25,582 25,372 25,033

Net gains from sale of assets - - - - - -


Total gains 22,015 25,722 3,707 25,582 25,372 25,033

Total income 125,611 87,719 -37,892 81,918 83,382 84,714

Programme 1.2 Navy Capabilities 5,208,839 5,427,010 218,171 5,462,891 5,100,912 5,131,328

Notes


2. The 2015-16 variation primarily results from the elimination of military workforce recoveries previously anticipated from the former Defence Materiel

Organisation.


33

Table 20: Navy Deliverables (Unit Ready Days)[1]

Deliverables

2015-16Budget

Estimate

2015-16Revised

Estimate20 Major Combatants[2] 3,280 3,23319 Minor Combatants[3] 4,186 4,1866 Amphibious and Afloat Support[4] 821 8597 Maritime Teams[5] 2,558 2,5589 Hydrographic Force [6] 2,437 3,107

Notes1. Unit Ready Days (URD) are the aggregate number of days that constituent force elements are available for tasking.

2. Major Combatants comprises Adelaide class frigates (FFG), Anzac class frigates (FFH), submarines (CCSM) and Hobart class air warfare destroyers (DDG) from 2016-17. URD decrease due to amendment to HMAS Waller’s certification schedule.3. Minor Combatants comprises Armidale class patrol boats (ACPB) and coastal minehunters (MHC).4. Amphibious and Afloat Support comprises the oil tanker (AO), replenishment ship (AOR), landing ship dock (LSD) and Canberra class landing helicopter dock. URD increase due to program changes and revised IOC date for LHD. The heavy landing ship (HMAS Tobruk ) decommissioned in July 2015.5. Maritime Teams comprises clearance diving, Deployable Geospatial Support and Mobile Meteorological and Oceanographic (METOC).

6. Hydrographic Force comprises the hydrographic ships, survey motor launches, chart production office and meteorological and oceanographic centres. Increase in URD due to variations in scheduled maintenance programs and Fleet commitments across Hydrographic Force assets.

Table 21: Navy Deliverables (Unit Availability Days)[1]

Deliverables

2015-16Budget

Estimate

2015-16Revised

Estimate20 Major Combatants[2] 2,984 2,93519 Minor Combatants[3] 3,724 3,6776 Amphibious and Afloat Support[4] 722 7857 Maritime Teams[5] 2,558 2,5589 Hydrographic Force [6] 2,512 2,266

Notes

5. Maritime Teams comprises clearance diving, Deployable Geospatial Support and Mobile Meteorological and Oceanographic (METOC).6. Hydrographic Force comprises the hydrographic ships, survey motor launches, chart production office and meteorological and oceanographic centres. Decrease in UAD due to variations in scheduled maintenance programs and Fleet commitments across Hydrographic Force assets.

1. A Unit Availability Day (UAD) is a day when a unit is materially ready and its personnel state and level of competence enables the unit to safely perform tasks in the units normal operating environment, immediately. UAD differs from URD in that for a UAD minor maintenance periods, defects, training and personnel state of a unit are taken into account.2. Major Combatants comprises Adelaide class frigates (FFG), Anzac class frigates (FFH), submarines (CCSM) and Hobart class air warfare destroyers (DDG) from 2016-17. UAD decrease due to amendment to HMAS Waller’s certification schedule.

3. Minor Combatants comprises Armidale class patrol boats (ACPB) and coastal minehunters (MHC). UAD decrease due to MHC program changes.4. Amphibious and Afloat Support comprises the oil tanker (AO), replenishment ship (AOR), landing ship dock (LSD) and Canberra class landing helicopter dock (LHD). UAD increase due to program changes and revised IOC date for LHD. The heavy landing ship (HMAS Tobruk ) decommissioned in July 2015.


34

Table 22: Navy Deliverables (Products)

Deliverables

2015-16Budget

Estimate

2015-16Revised

Estimate1,100 1,100

15 1529 29

Notes

Maritime Safety Updates[1]

2. A Charting Project includes all priority elements involved in producing paper and electronic charts for particular geographic area projects.

Charting Projects[2]

Nautical Publications[3]

1. A Maritime Safety Update is an urgent safety-critical revision to published paper and Electronic Navigational Charts and official nautical publications that are distributed to the nautical community on a fortnightly cycle.

3. Nautical publications include three annual publications - Australian Tide Tables, Annual Notices to Mariners and AusTides; 25 fortnightly Notices to Mariners; and selected additional publications each year. HydroScheme has been removed from the publications target as it is not a mandated publication.

Table 23: Navy Deliverables (Flying Hours)

Deliverables

2015-16Budget

Estimate

2015-16Revised

Estimate16 S-70B-2 (Seahawk) 2,250 2,25013 AS350BA (Squirrel) 1,500 1,50013 MH-60R 3,400 3,400- MRH90 [1] - -1 Laser airborne depth sounder aircraft 980 980

Notes1. MRH90 Flying Hours are reported by Army.


35

Programme 1.3: Army Capabilities



Table 24: Cost Summary for Programme 1.3 Army Capabilities

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

4,049,921 4,094,634 44,713 3,942,069 3,964,661 3,992,530

Suppliers 1,821,103 1,863,714 42,611 1,865,404 1,894,306 1,962,345

Grants[2]

2,997 2,815 -182 2,817 93 95

Depreciation and amortisation 915,518 1,321,770 406,252 1,165,819 678,508 548,099

Finance cost 4,615 - -4,615 3,538 4,212 5,514




Total expenses 6,886,662 7,382,082 495,420 7,078,106 6,638,768 6,603,282

Income

Revenues


81,375 15,573 -65,802 15,428 15,857 16,306

Other revenue 4,052 4,052 - 617 633 649

Total revenue 85,427 19,625 -65,802 16,045 16,490 16,955

Gains

Reversal of previous asset write-downs 18,792 18,424 -368 19,175 19,815 20,401

Net gains from sale of assets[4]

7,549 7,549 - 7,549 7,549 7,549


Total gains 26,341 25,973 -368 26,724 27,364 27,950

Total income 111,768 45,598 -66,170 42,769 43,854 44,905

Programme 1.3 Army Capabilities 6,774,894 7,336,484 561,590 7,035,337 6,594,914 6,558,377

Notes


2. Grants in 2015-16 and 2016-17 predominantly include a grant made to the Australian War Memorial.

4. Net gains from the sale of assets include gains arising from the disposal of B-vehicles.


Organisation.

Table 25: Army Deliverables (Rate of Effort – Flying Hours)

Deliverables

2015-16

Budget

Estimate

2015-16

Revised

Estimate

2016-17

Forward

Year 1

2017-18

Forward

Year 2

2018-19

Forward

Year 3

6 CH-47D Chinook 380 380 - - -

7 CH-47F Chinook 1,320 1,300 1,700 2,000 2,000

34 S-70A Black Hawk[1]

4,230 4,575 4,552 4,550 4,225

41 B-206 Kiowa 6,000 5,300 5,500 4,150 2,150

22 ARH Tiger 5,846 4,350 6,227 6,227 6,227

47 MRH90 Taipan[2]

7,100 6,250 7,000 7,600 8,200

Notes

1. Chief of Army extended Black Hawk Planned Withdrawal Date to December 2022 to ameliorate the impact of MRH90 Taipan

delays.

2. Introduction of MRH90 Taipan into the Special Operations role has been delayed until 2019, decreasing Rate of Effort over

the period 2015 to 2019. S70A Black Hawk Rate of effort has been increased to compensate.


36

Programme 1.4: Air Force Capabilities


Table 26: Cost Summary for Programme 1.4 Air Force Capabilities

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

2,067,367 2,065,031 -2,336 1,984,360 1,983,820 1,997,611

Suppliers 2,294,540 2,394,350 99,810 2,260,742 2,389,962 2,389,247

Grants[2]

50 50 - 50 - -

Depreciation and amortisation 1,167,381 1,058,015 -109,366 1,054,251 935,399 925,549

Finance cost 16,462 - -16,462 11,184 13,313 17,429




Total expenses 5,696,005 5,686,736 -9,269 5,476,178 5,483,380 5,484,278

Income

Revenues


158,883 34,948 -123,935 35,762 36,758 37,628

Other revenue 5,213 5,213 - 5,333 5,465 5,602

Total revenue 164,096 40,161 -123,935 41,095 42,223 43,230

Gains

Reversal of previous asset write-downs 26,804 33,524 6,720 33,461 33,329 32,896



Total gains 26,804 33,524 6,720 33,461 33,329 32,896

Total income 190,900 73,685 -117,215 74,556 75,552 76,126

Programme 1.4 Air Force Capabilities 5,505,105 5,613,051 107,946 5,401,622 5,407,828 5,408,152

Notes


2. Grants expense include grants to the Sir Richard Williams Foundation.


Organisation.


37

Table 27: Air Force Deliverables (Flying Hours)

Deliverables

2015-16Budget

Estimate

2015-16Revised

Estimate

2016-17Forward

Year 1

2017-18Forward

Year 2

2018-19Forward

Year 362 PC-9/A 16,352 16,104 16,552 16,352 11,852- PC-9/A Replacement - - - 1,600 7,000

16 KA350 King Air[1] 10,700 9,950 10,700 10,700 10,70012 C-130J Hercules 7,350 7,350 7,350 7,350 7,3508 C-17A Globemaster III[2] 6,200 7,000 6,200 6,200 6,200

10 C-27J Spartan[3] 2,500 1,200 5,000 7,500 7,5005 KC-30A MRTT[4] 3,100 6,000 3,100 3,100 3,1002 737 BBJ[5] 1,600 1,500 1,600 1,600 1,6003 CL-604 Challenger[5] 2,403 1,903 2,403 2,403 2,403

15 AP-3C Orion 6,770 6,770 6,465 4,660 2,1606 E-7A Wedgetail[6] 3,600 3,240 3,600 3,600 3,600

71 F/A-18A/B Hornet[7] 12,000 17,700 12,000 12,000 12,00024 F/A-18F Super Hornet 5,200 5,200 4,000 4,000 4,0008 P-8A Poseidon - - 450 2,762 4,254

33 Hawk 127 7,000 7,000 7,000 7,000 8,00012 E/A-18G Growler - - 800 1,600 1,9002 F-35A Lightning II 500 500 500 752 2,000

Notes1. KA350 King Air hours expected to reduce by 750 hours in FY 15-16 due to an internal reallocation of aircrew within Air Mobility Group.

6. E-7A Wedgetail hours expected to reduce by 360 hours in FY 15-16 due to operational assignment.7. F/A-18A/B Hornet hours expected to increase by 5,700 hours in FY 15-16 due to operational assignment.

2. C-17A Globemaster III hours expected to increase by 800 hours in FY 15-16 due to operational assignment. 3. C-27J Spartan hours expected to reduce by 1,300 hours in FY 15-16 due to aircraft production delays.4. KC-30A MRTT hours expected to increase by 2,900 hours in FY 15-16 due to operational assignment.5. 737 BBJ and CL-604 Challenger hours expected to underachieve in FY 15-16 due to reduced tasking.


38

Programme 1.5: Joint Operations Command



Table 28: Cost Summary for Programme 1.5 Joint Operations Command

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

6,599 6,694 95 6,395 6,446 6,406

Suppliers 40,951 39,273 -1,678 39,943 45,905 39,089

Grants - - - - - -

Depreciation and amortisation 2,902 2,385 -517 2,462 3,480 4,884





Total expenses 50,452 48,352 -2,100 48,800 55,831 50,379

Income

Revenues

Goods and services - - - - 555 557

Other revenue - - - - - -

Total revenue - - - - 555 557

Gains




Total gains - - - - - -

Total income - - - - 555 557

Programme 1.5 Joint Operations Command 50,452 48,352 -2,100 48,800 55,276 49,822

Note



39

Programme 1.6: Intelligence Capabilities



Table 29: Cost Summary for Programme 1.6 Intelligence Capabilities

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1][2]

276,664 237,337 -39,327 233,776 232,091 238,142

Suppliers[2]

326,241 286,251 -39,990 294,478 288,879 315,625

Grants - - - - - -

Depreciation and amortisation 48,790 41,562 -7,228 43,282 37,491 38,141


Write-down of assets and impairment of assets 1,938 1,506 -432 1,693 2,036 2,299



Total expenses 653,633 566,656 -86,977 573,229 560,497 594,207

Income

Revenues


10,536 960 -9,576 858 597 641


Total revenue 10,536 960 -9,576 858 597 641

Gains

Reversal of previous asset write-downs 1,537 1,194 -343 1,342 1,615 1,823



Total gains 1,537 1,194 -343 1,342 1,615 1,823

Total income 12,073 2,154 -9,919 2,200 2,212 2,464

Programme 1.6 Intelligence Capabilities 641,560 564,502 -77,058 571,029 558,285 591,743

Notes


2. The 2015-16 variation is predominantly relating to the Defence Security and Vetting Service, formerly the Defence Security Authority, transferred from

this Programme to Programme 1.9 Defence Executive Support.


40

Programme 1.7: Vice Chief of the Defence Force




The Group enables Defence to meet its objectives through the provision of: military strategic effects and commitments advice and planning; joint professional military education and training; logistics support; health support; ADF Cadet and Reserve policy; joint capability coordination; preparedness management; and joint and combined ADF doctrine.

VCDF Group is committed to drive reform in line with Defence’s Pathway to Change Programme and

the First Principles Review.

Table 30: Cost Summary for Programme 1.7 Vice Chief of the Defence Force [1]

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[2]

575,638 557,202 -18,436 578,508 576,656 589,279

Suppliers[3]

568,525 443,039 -125,486 466,930 474,209 477,294

Grants[4]

25 200 175 - - -

Depreciation and amortisation 21,788 23,047 1,259 24,339 24,630 25,876


Write-down of assets and impairment of assets 380,045 357,658 -22,387 373,814 390,891 408,812



Total expenses 1,546,021 1,381,146 -164,875 1,443,591 1,466,386 1,501,261

Income

Revenues


120,694 13,336 -107,358 8,879 9,119 9,253

Other revenue 150 650 500 1,154 1,158 1,162

Total revenue 120,844 13,986 -106,858 10,033 10,277 10,415

Gains

Reversal of previous asset write-downs 227,741 214,324 -13,417 224,005 234,240 244,980



Total gains 227,741 214,324 -13,417 224,005 234,240 244,980

Total income 348,585 228,310 -120,275 234,038 244,517 255,395

Programme 1.7 Vice Chief of the Defence Force 1,197,436 1,152,836 -44,600 1,209,553 1,221,869 1,245,866

Notes

4. Grants expense include grants to Fisher House Foundation.

1. The Defence Learning Branch transferred from Vice Chief of Defence Force (VCDF) Group to Defence People Group (DPG) on 1 July 2015.

3. The 2015-16 variation primarily results from the elimination of logistics revenue, and associated expenses, previously anticipated from the former

Defence Materiel Organisation.

2. Employee expenses in 2015-16 include funding for an additional pay (the 27th pay). The budget for employee expenses also includes the funding for

ADF Health.


41

Programme 1.8: Capability Acquisition and Sustainment



No changes have been made to the Objectives since the PBS 2015-16.

On 1 July 2015, the Defence Materiel Organisation (DMO) transitioned to the newly established Capability Acquisition and Sustainment Group (CASG) within the Department of Defence as recommended by the Defence First Principles Review. CASG continues to have the former DMO’s objective to provide the materiel equipment and sustainment elements of capability for the ADF in an effective, efficient, economical and safe manner.

Table 31: Cost Summary for Programme 1.8 Capability Acquisition and Sustainment [1]

2015-16

Revised

Estimate

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[2]

492,420 450,479 457,888 466,345

Suppliers 113,642 220,238 238,799 248,336

Grants 8,599 9,870 8,598 8,825

Depreciation and amortisation - - - -

Finance cost - - - -

Write-down of assets and impairment of assets - - - -

Net losses from sale of assets - - - -

Other expenses - - - -

Total expenses 614,661 680,587 705,285 723,506

Income

Revenues

Goods and services 917 2,596 963 2,727

Other revenue - - - -

Total revenue 917 2,596 963 2,727

Gains

Reversal of previous asset write-downs - - - -

Net gains from sale of assets - - - -

Other gains - - - -

Total gains - - - -

Total income 917 2,596 963 2,727

Programme 1.8 Capability Acquisition and

Sustainment 613,744 677,991 704,322 720,779

Notes


1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded with resources being transferred into Defence to the

newly formed Programme 1.8 Capability Acquisition and Sustainment from 2015-16 onwards.


42

Table 32: Major Capital Investment Programme by 2015-16 Forecast Expenditure

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m

A Top 30 Projects Gross Plans 5,873 4,882 -991

B Other Approved Project Gross Plans[1] 832 1,651 819

C Total Gross Plan Project Estimates (A+B) 6,705 6,533 -172

D Management Margin: Slippage[2] -548 -253 295

E Payments Required for the Approved Programme (C+D) 6,157 6,280 123

F Projects Planned for Government Consideration 625 254 -371

Total Estimated Funds Available (E+F) 6,782 6,534 -248 Notes

1. Includes new project approvals and other adjustments yet to be actioned.

2. Management margin is an estimate of possible overall approved capital programme expenditure slippage that may occur as the 2015-16 financial year progresses.

The above table reflects the cash programmed to fund the current Approved Major Capital Investment Programme. The Total Programme Estimate for Major Capital Projects (serial C) is referred to as the Programme’s ‘Gross Plan’ estimate and is based on project expenditure expected to occur during the year in accordance with project schedules. The Management Margin (serial D) reflects an estimate of possible overall programme slippage that may occur during the year. This management margin is deducted from the Gross Plan estimate to calculate the estimated cash required for the Approved Programme (serial E). An estimate for projects that are planned for Government consideration and transfer to the approved programme during 2015-16 (serial F) is then added to obtain the total estimated funds available for the Major Capital Investment Programme.

The management margin is applied because of the inherent uncertainty in a programme with a large number of complex and long lead time projects. Unknown project events will occur which will impact on funding requirements. These events include cost savings and better payment terms, variations to project schedules, withholding of planned payments due to contractor non-performance, and variations to payments required under the US Government’s FMS Program. CASG estimates and applies a slippage model to determine the appropriate management margin and annual cash requirement for the programme.

The slippage model is predicated upon the assumption that for each year, a certain percentage of project Gross Plan estimates will slip or be accelerated. The percentages applied vary with the composition of the programme, the estimates update being conducted and the probability assessments of expenditure plan achievement provided by projects.


43

Table 33: Minor Capital Investment Programme by 2015-16 Forecast Expenditure

2015-16 Budget

Estimate $m

Revised Estimate 2015-16

$m Variation

$m A Top 10 Projects Gross Plans 33 29 -4 B Other Approved Project Gross Plans - 7 7 C Total Gross Plan Project Estimates (A+B) 33 36 3 D Management Margin: Slippage -2 1 3

E Total Approved Programmes (C+D) 31 37 6 F Projects Planned for Government Consideration 105 48 -57 Total Estimated Funds Available (E+F) 136 85 -51


44

Programme 1.9: Defence Executive Support



Table 34: Cost Summary for Programme 1.9 Defence Executive Support

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1][2]

37,078 76,508 39,430 73,276 72,935 75,357

Suppliers[2]

79,503 122,209 42,706 118,632 114,036 114,963

Grants - - - - - -

Depreciation and amortisation 167 330 163 326 376 406




Other expenses 2,418 4,000 1,582 2,475 2,548 2,616

Total expenses 119,166 203,047 83,881 194,709 189,895 193,342

Income

Revenues


- 9,576 9,576 9,794 9,975 10,197

Other revenue 116 116 - 118 122 124

Total revenue 116 9,692 9,576 9,912 10,097 10,321

Gains





Total income 116 9,692 9,576 9,912 10,097 10,321

Programme 1.9 Defence Executive Support 119,050 193,355 74,305 184,797 179,798 183,021

Notes

2. The 2015-16 variation is predominantly relating to the Defence Security and Vetting Service, formerly the Defence Security Authority, transferred from

Programme 1.6 Intelligence Capabilities to this Programme.



45

Programme 1.10: Estate and Infrastructure



Table 35: Cost Summary for Programme 1.10 Estate and Infrastructure [1]

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[2]

1,139,336 1,130,344 -8,992 1,185,095 1,226,287 1,266,778

Suppliers 2,094,553 2,205,526 110,973 1,968,571 2,495,222 2,190,538

Grants - - - - - -

Depreciation and amortisation 941,079 948,076 6,997 929,492 959,044 1,006,567

Finance cost 100,019 97,760 -2,259 102,111 104,100 103,501

Write-down of assets and impairment of assets 18,315 19,087 772 20,089 21,765 23,537


Other expenses 34,060 31,300 -2,760 3,510 12,039 -

Total expenses 4,327,362 4,432,093 104,731 4,208,868 4,818,457 4,590,921

Income

Revenues

Goods and services 335,140 337,005 1,865 344,283 355,015 368,574

Other revenue 9,865 9,026 -839 9,636 10,110 10,607

Total revenue 345,005 346,031 1,026 353,919 365,125 379,181

Gains

Reversal of previous asset write-downs 1,305 1,414 109 1,461 1,624 1,804

Net gains from sale of assets 25,500 25,500 - 210 11,939 -


Total gains 26,805 26,914 109 1,671 13,563 1,804

Total income 371,810 372,945 1,135 355,590 378,688 380,985

Programme 1.10 Estate and Infrastructure Group 3,955,552 4,059,148 103,596 3,853,278 4,439,769 4,209,936

Notes

1. A restructure of Defence Programmes at the end of 2014-15 has resulted in Programme 1.9 Chief Operating Officer - Defence Support and Reform

being renamed as Programme 1.10 Estate and Infrastructure.



46

Programme 1.11: Chief Information Officer




The programme objective is supported by the CIOG Organisational Review Project which was closed in the first quarter of the 2015-16 financial year and the activity subsumed into the wider Defence First Principles Review Workforce Alignment activity.

Table 36: Cost Summary for Programme 1.11 Chief Information Officer

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

94,822 101,440 6,618 84,483 82,132 82,578

Suppliers 850,781 758,324 -92,457 767,971 880,749 786,568

Grants - - - - - -


Finance cost[2]

10 10 - - - -




Total expenses 1,149,283 1,039,681 -109,602 1,062,017 1,200,030 1,113,343

Income

Revenues

Goods and services - - - - - -


Total revenue - - - - - -

Gains


Net gains from sale of assets [3]

-4,763 -4,763 - -4,517 -4,652 -4,792


Total gains 1,983 2,064 81 2,969 3,059 3,147

Total income 1,983 2,064 81 2,969 3,059 3,147

Programme 1.11 Chief Information Officer 1,147,300 1,037,617 -109,683 1,059,048 1,196,971 1,110,196

Notes


3. At the Portfolio level, Defence has budgeted for a total net gain from the sale of assets. Whilst the amounts shown in the budget estimate, revised

estimate and forward estimates represent a loss for this Programme, the overall Portfolio budget outcome is for a gain.

2. Finance costs cease in 2015-16 as a result of the cessation of finance leases.


The priorities for the 2015-16 budget allocation will continue to be:

To deliver the ICT elements of endorsed projects and system enhancements in the DCP, MCF and ICT work plans (which under the First Principles Review will be consolidated into the Defence Integrated Investment Plan during financial year 2015-16) developed through regular engagement with customer representatives.


47

Programme 1.12: Defence People



Table 37: Cost Summary for Programme 1.12 Defence People [1]

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[2]

157,103 179,248 22,145 162,844 159,666 161,170

Suppliers 283,549 300,096 16,547 305,329 296,640 304,217

Grants 1,521 1,521 - 1,553 1,586 1,623

Depreciation and amortisation 4,124 4,412 288 4,833 5,001 4,781





Total expenses 446,297 485,277 38,980 474,559 462,893 471,791

Income

Revenues




Gains





Total income - - - - - -

Programme 1.12 Defence People 446,297 485,277 38,980 474,559 462,893 471,791

Notes

1. The Defence Learning Branch transferred from Vice Chief of Defence Force (VCDF) Group to Defence People Group (DPG) on 1 July 2015.



Provide and manage APS learning and development services to build the capabilities of the Defence workforce.

Programme 1.12 Key Performance Indicators

Delivery of Defence APS learning and development meets Defence job family and capability requirements.


48

Programme 1.13: Defence Science and Technology



Table 38: Cost Summary for Programme 1.13 Defence Science and Technology

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

297,729 298,655 926 282,930 270,307 276,658

Suppliers 138,027 121,886 -16,141 110,862 104,558 90,966

Grants[2]

403 403 - 58 - -






Total expenses 464,393 447,677 -16,716 420,983 400,028 391,989

Income

Revenues

Goods and services 31,358 2,747 -28,611 2,776 2,843 2,904

Other revenue 191 191 - 195 201 206

Total revenue 31,549 2,938 -28,611 2,971 3,044 3,110

Gains


Net gains from sale of assets[3]

- -2 -2 - - -


Total gains 1,195 1,207 12 1,286 1,451 1,641

Total income 32,744 4,145 -28,599 4,257 4,495 4,751

Programme 1.13 Defence Science and Technology 431,649 443,532 11,883 416,726 395,533 387,238

Notes

2. Grants predominantly include the approved multi-year grant for the DSTG Industry Placement Programme.

3. At the Portfolio level, Defence has budgeted for a total net gain from the sale of assets. Whilst the amounts shown in the revised estimate represents a

loss for this Programme, the overall Portfolio budget outcome is for a gain.



49

Programme 1.14: Capability Development



Table 39: Cost Summary for Programme 1.14 Capability Development

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

61,965 20,436 -41,529 108,343 139,766 199,681

Suppliers 896,223 731,762 -164,461 1,345,284 1,588,359 2,245,700

Grants - - - - - -

Depreciation and amortisation 365,401 23,995 -341,406 210,625 1,246,415 1,689,925


Write-down of assets and impairment of assets 132,110 106,548 -25,562 132,865 162,719 196,113



Total expenses 1,455,699 882,741 -572,958 1,797,117 3,137,259 4,331,419

Income

Revenues




Gains

Reversal of previous asset write-downs 21,938 17,693 -4,245 22,073 27,035 32,628



Total gains 21,938 17,693 -4,245 22,073 27,035 32,628

Total income 21,938 17,693 -4,245 22,073 27,035 32,628

Programme 1.14 Capability Development 1,433,761 865,048 -568,713 1,775,044 3,110,224 4,298,791

Note



50

Programme 1.15: Chief Finance Officer



Table 40: Cost Summary for Programme 1.15 Chief Finance Officer

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees[1]

129,322 126,974 -2,348 125,725 128,662 131,291

Suppliers[2]

836,896 111,337 -725,559 30,144 28,278 29,351

Grants - - - - - -

Depreciation and amortisation[3]

13,415 4,155 -9,260 9,430 14,138 13,962


Write-down of assets and impairment of assets 2,870 693 -2,177 666 661 1,875



Total expenses 982,503 243,159 -739,344 165,965 171,739 176,479

Income

Revenues




Gains

Reversal of previous asset write-downs 673 356 -317 341 345 556


Other gains 5,386 4,700 -686 4,818 4,938 5,061

Total gains 6,059 5,056 -1,003 5,159 5,283 5,617

Total income 6,059 5,056 -1,003 5,159 5,283 5,617

Programme 1.15 Chief Finance Officer 976,444 238,103 -738,341 160,806 166,456 170,862

Notes

2. As disclosed in the Portfolio Budget Statements 2015-16, this Programme reflected the expenses of the former Defence Materiel Organisation until a

new Programme was established. These expenses have now been transferred to Programme 1.8.


3. Capital is held in this Programme from time to time for future prioritisation. Accordingly, the associated depreciation and amortisation resides in this

Programme.


51

Administered Programme 1.16: Defence Force Superannuation Benefits



Table 41: Cost Summary for Administered Programme 1.16 Defence Force Superannuation Benefits

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Net foreign exchange losses - - - - - -

Retention benefits 77,940 69,798 -8,142 79,985 93,548 107,299

Military superannuation benefits 1,475,211 1,475,211 - 1,413,910 1,363,802 1,322,977

Total expenses 1,553,151 1,545,009 -8,142 1,493,895 1,457,350 1,430,276

Income

Revenues

Interest - - - - - -

Net foreign exchange gains - - - - - -

Military superannuation contributions 1,347,113 1,336,145 -10,968 1,221,423 1,152,008 1,084,574

Total income 1,347,113 1,336,145 -10,968 1,221,423 1,152,008 1,084,574


Benefits 206,038 208,864 2,826 272,472 305,342 345,702


52

Administered Programme 1.17: Defence Force Superannuation Nominal Interest



Table 42: Cost Summary for Administered Programme 1.17 Defence Force Superannuation Nominal Interest

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses


Retention benefits - - - - - -

Military superannuation benefits 3,557,464 3,557,464 - 3,726,501 3,895,885 4,065,719

Total expenses 3,557,464 3,557,464 - 3,726,501 3,895,885 4,065,719

Income

Revenues



Military superannuation contributions - - - - - -



Nominal Interest 3,557,464 3,557,464 - 3,726,501 3,895,885 4,065,719


53

Administered Programme 1.18: Housing Assistance



Table 43: Cost Summary for Administered Programme 1.18 Housing Assistance

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses


Housing subsidies 119,777 103,256 -16,521 111,627 118,275 127,202

Total expenses 119,777 103,256 -16,521 111,627 118,275 127,202

Income

Revenues



Dividends - - - - - -

License fees 14,416 13,871 -545 15,644 16,440 17,236

Other - - - - - -

Total income 14,416 13,871 -545 15,644 16,440 17,236

Programme 1.18 Housing Assistance 105,361 89,385 -15,976 95,983 101,835 109,966


54

Administered Programme 1.19: Other Administered



Table 44: Cost Summary for Administered Programme 1.19 Other Administered

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Total expenses - - - - - -

Income

Revenues

Interest 30,936 28,027 -2,909 28,027 28,027 28,027

Dividends 50,476 60,215 9,739 50,767 49,952 59,318

Other 31,402 32,768 1,366 27,271 19,131 21,945

Total income 112,814 121,010 8,196 106,065 97,110 109,290

Programme 1.19 Other Administered -112,814 -121,010 -8,196 -106,065 -97,110 -109,290


55

Outcome 2: The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by Government

Outcome 2 Strategy

No changes have been made to this outcome strategy since the Portfolio Budget Statements 2015-16.

Outcome 2 Resources


2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Programme 2.1 - Operations Contributing to the Security of the Immediate Neighbourhood

Revenues from other sources - - - - - -

Departmental outputs 74 97 23 1,023 - -

Programme 2.2 - Operations Supporting Wider Interests

Revenues from other sources 15,192 15,178 -14 559 - -

Departmental outputs 863,733 863,755 22 137,959 19,058 -

Total resourcing

Total Departmental outputs 863,807 863,852 45 138,982 19,058 -

Total Departmental revenue from other sources 15,192 15,178 -14 559 - -

Total resources for Outcome 2 878,999 879,030 31 139,541 19,058 -


56


Programme 2.1: Operations Contributing to the Security of the Immediate Neighbourhood


Table 46: Cost Summary for Programme 2.1 Operations Contributing to the Security of the Immediate Neighbourhood

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees - - - - - -

Suppliers 74 97 23 1,023 - -

Grants - - - - - -

Depreciation and amortisation - - - - - -





Total expenses 74 97 23 1,023 - -

Income

Revenues




Gains






Programme 2.1 Operations Contributing to the

Security of the Immediate Neighbourhood 74 97 23 1,023 - -


57

Programme 2.2: Operations Supporting Wider Interests



Table 47: Cost Summary for Programme 2.2 Operations Supporting Wider Interests

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees 128,974 129,574 600 4,602 - -

Suppliers 663,387 662,795 -592 45,849 19,058 -

Grants 86,561 86,561 - 88,067 - -





Other expenses 3 3 - - - -

Total expenses 878,925 878,933 8 138,518 19,058 -

Income

Revenues

Goods and services 15,192 15,178 -14 559 - -


Total revenue 15,192 15,178 -14 559 - -

Gains





Total income 15,192 15,178 -14 559 - -

Programme 2.2 Operations Supporting Wider

Interests 863,733 863,755 22 137,959 19,058 -


The following has been added to the Programme Deliverables since the PBS 2015-16:

Operation Commenced Objective

Nepal Assist 2015 Provision of airlift to transport Department of Foreign Affairs and Trade (DFAT) Humanitarian and Disaster Relief stores to Nepal. Five Defence staff deployed to Katmandu to support DFAT staff.


58

Outcome 3: Support for the Australian community and civilian authorities as requested by Government

Outcome 3 Strategy

No changes have been made to this outcome strategy since the Portfolio Budget Statements 2015-16.

Outcome 3 Resources


2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Programme 3.1 - Defence Contribution to National Support Tasks in Australia

Revenues from other sources - - - - - -

Departmental outputs 48,705 48,701 -4 5,688 - -

Total resourcing 48,705 48,701 -4 5,688 - -

Total Departmental outputs 48,705 48,701 -4 5,688 - -

Total Departmental revenue from other sources - - - - - -

Total resources for Outcome 3 48,705 48,701 -4 5,688 - -


59


Programme 3.1: Defence Contribution to National Support Tasks in Australia


Table 49: Cost Summary for Programme 3.1 Defence Contribution to National Support Tasks in Australia

2015-16

Budget

Estimate

$'000

2015-16

Revised

Estimate

$'000

Variation

$'000

2016-17

Forward

Estimate

$'000

2017-18

Forward

Estimate

$'000

2018-19

Forward

Estimate

$'000

Expenses

Employees 17,692 17,692 - 4,414 - -

Suppliers 31,013 31,009 -4 1,274 - -

Grants - - - - - -






Total expenses 48,705 48,701 -4 5,688 - -

Income

Revenues




Gains






Programme 3.1 Defence Contribution to National

Support Tasks in Australia 48,705 48,701 -4 5,688 - -


60

Section 3: Defence Explanatory Tables and Budgeted Financial Statements

3.1 EXPLANATORY TABLES

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the 2015-16 budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and programme expenses, movements in administered funds, special accounts and government indigenous expenditure.

Table 50: Summary of Estimated Special Account Balances [1][2][3]

Outcome

Opening2015-162014-15

$'000

Receipts2015-162014-15

$'000

Payments2015-162014-15

$'000

Adjustments2015-162014-15

$'000

Closing Balance2015-162014-15

$'000

1 64,827 34,671 -56,345 - 43,153

66,553 41,264 -42,990 - 64,827

1 48 4 -3 - 49

324 10 -286 - 48

1 167 5 -4 - 168

167 4 -4 - 167

1 1,375 309 -272 - 1,412

1,338 85 -48 - 1,375

Total Special Accounts 2015-16 66,417 34,989 -56,624 - 44,7822014-15 actual 68,382 41,363 -43,328 - 66,417

Notes1. 2015-16 estimates in bold.2. 2014-15 actuals in italics.3. These are all Special Public Monies.

Young Endeavour Youth Programme Special Account – Public Governance, Performance and Accountability Act 2013

Services for Other Entities and Trust Moneys - Defence Special Account– Public Governance, Performance and Accountability Act 2013

Defence Endowments Special Account – Public Governance, Performance and Accountability Act 2013

Fedorczenko Legacy Special Account – Public Governance, Performance and Accountability Act 2013


61

3.1.1 Australian Government Indigenous Expenditure

Table 51: Australian Government Indigenous Expenditure

ProgrammeBill No. 1

$'000Outcome 1Defence Indigenous Employment Strategy[1][2] 1.12 Departmental 2015-16 Revised Estimate 3,861 Departmental 2015-16 Budget Estimate 3,862 Army Aboriginal Community Assistance Programme[1][3] 1.3 Departmental 2015-16 Revised Estimate 5,700 Departmental 2015-16 Budget Estimate 5,700 Total 2015-16 Revised Estimate 9,561Total 2015-16 Budget Estimate 9,562

Notes1. All amounts are GST exclusive. Revised Estimate and Budget Estimate are direct costs.2. The Defence Indigenous Development Programme, as previously disclosed, has been subsumed into the Defence Indigenous Employment Strategy.

3. The majority of costs are subsequently recovered from Department of Prime Minister and Cabinet under Outcome 2.2.1 Indigenous Housing and Infrastructure Appropriation.

Defence Indigenous Employment Strategy

No changes have been made to the Defence Indigenous Employment Strategy since the Portfolio Budget Statements 2015-16.

Army Aboriginal Community Assistance Programme

No changes have been made to the Army Aboriginal Community Assistance Programme since the Portfolio Budget Statements 2015-16.


62

3.1.2 Grants

The following changes to the grants programme since the PBS 2015-16 total $22,917,285 (GST Exclusive).

Table 52: Grants approved since the 2015-16 Budget

Total Approvals

$'000[1]

2015-16 Revised

Estimate$'000[1]

59 59 2,317 1,506 100 100

Stand Tall PTS 150 150 Australian Strategic Policy Institute (ASPI) 10,328 3,358 New Air Combat Capability - Industry Support Program (NACC-ISP) 2,586 2,531 Skilling Australia's Defence Industry (SADI) 3,365 3,365 Industry Skilling Program Enhancement - Schools Pathway Programme 563 563 Australian Peacekeeping Memorial Project 2,000 2,000 National Boer War Memorial Association 1,450 1,450 Total additional grants 22,918 15,082

Note1. Approvals and Revised Estimate are as at 15 January 2016 and exclude GST.

Army History Research Grants SchemeFamily Support Funding ProgrammeChina Matters

The following are grants that have been approved since the Portfolio Budget Statements 2015-16:

Army History Research Grants Scheme

Grants to the total of $58,743 were approved for the Army Military History Research Grants Scheme. These grants promote the study and understanding of Army, its history and traditions, which in turn assists in the achievement of Government’s Defence policy objectives through the provision of capabilities for land and special operations. The scheme has been in operation since 1992.

Family Support Funding Program

Since the publication of the PBS 2015-16, the Family Support Funding Program has approved grants to the total of $2,317,212. This total includes multi-year grants (2015-16 to 2017-18) to the total of $1,166,470. This program provides funds to support projects and services initiated by Defence families. It is also available to existing groups in the community composed of or benefiting Defence families.

China Matters

A grant of $100,000 was approved for China Matters, focusing exclusively from a policy perspective on China’s rise and how it matters to Australia.

Stand Tall for Post Traumatic Stress (PTS)

A grant of $150,000 was approved for Stand Tall for PTS as a contribution to the international PTSD Forum.

Australian Strategic Policy Institute (ASPI)

A multi-year grant (2015-16 to 2017-18) to the total of $10,328,000 was approved for the ASPI. ASPI's purpose is to provide fresh, independent and non-partisan ideas, and to promote discussion within government, academia and the wider public on Australia's defence and strategic policy issues.


63

New Air Combat Capability – Industry Support Program (NACC-ISP)

Five grants to the value of $2,585,660 (plus GST of $258,566) were approved for NACC-ISP, which provides funding to Australian companies and research organisations to support the development of new or improved capabilities that may enhance the ability to win work in the production, sustainment and modernisation phases of the JSF Program.

Skilling Australia’s Defence Industry

Since the publication of the PBS 2015-16, the Skilling Australia’s Defence Industry Program has approved grants to the total of $3,364,670 (plus GST of $336,497). This program provides financial support for training and skilling activities in trade, technical or professional Skillsets that are required to meet a current or future Defence Capability need.

Industry Skilling Program Enhancement – Schools Pathways Programme

Since the publication of the PBS 2015-16, the Industry Skilling Program Enhancement – Schools Pathways Programme has approved a grant to the total of $563,000 (plus GST of $56,300). This programme raises students’ awareness of possible career opportunities and knowledge of Defence and Defence Industry pathways, whilst increasing the number of students undertaking science, technology, engineering and mathematics subjects in participating schools.

Australian Peacekeeping Memorial Project

A grant of $2,000,000 (plus GST of $200,000) was approved for the Australian Peacekeeping Memorial Project, to contribute to the establishment of a memorial on Anzac Parade, Canberra. This will commemorate Australian Peacekeeping and acknowledge the service and sacrifice of Australian Peacekeepers.

National Boer War Memorial Association

A grant of $1,450,000 (plus GST of $145,000) was approved for the National Boer War Memorial project, to contribute to the establishment of a memorial on Anzac Parade, Canberra. This will commemorate the Colonial and Australian Soldiers and Nurses who served in the Boer War in South-Africa from 1899-1902.


64

3.2 RESOURCE SUMMARY

Table 53: Budgeted Departmental Net Cost of Service (cash) (for the period ended 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000NET COST OF SERVICE (CASH)Cost of Service

Employee payments 10,440,150 11,668,583 11,214,815 11,300,387 11,496,909Supplier payments 10,224,383 11,240,647 10,982,155 11,905,497 12,397,883Purchase of specialist military equipment 6,302,121 6,808,626 5,997,362 7,070,882 9,147,457Purchase of inventory 1,005,880 1,453,099 1,387,033 1,374,665 1,417,772Purchase of other property, plant and equipment 1,497,854 1,521,248 2,088,094 2,643,597 2,349,940Other cash used 1,045,662 1,746,272 1,694,439 1,730,239 1,783,227

Total cash used 30,516,050 34,438,475 33,363,898 36,025,267 38,593,188Own source receipts 1,689,267 2,198,853 1,965,292 2,111,228 2,179,082

Total cash received 1,689,267 2,198,853 1,965,292 2,111,228 2,179,082Net cost of service (cash) 28,826,783 32,239,622 31,398,606 33,914,039 36,414,106FUNDED BY

Appropriation Bill 1/3/5 (price of outcomes) 26,082,690 29,162,834 28,648,671 29,796,729 30,737,610Appropriation carried forward from previous year - - - - -Appropriation Bill 2/4/6 (equity injection) 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Net cash to the Official Public Account -2,410 133,829 -897 -919 -942

Total funding source 28,838,771 32,239,622 31,398,606 33,914,039 36,414,106

Change in cash 11,988 - - - -

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented in his table represent Defence inclusive of the former Defence Materiel Organisation.


65

Portfolio Resource Statement

Table 54: Portfolio Resources

DepartmentalBill No. 3

$m


$m

AppropriationAct (No.1)

2015-16

$m


2015-16

$m

Return to the OPA

$m

Special Appropriation

$m

Total Appropriation

$m

Non-Appropriation

Receipts

$m

Other Non-Appropriated

Items

$m

TotalResources

Available

$mDepartment of Defence

Administered appropriations - - - - 15.8 -24.7 -8.9 -15.8 - -24.7Departmental appropriations 186.6 67.8 - - 122.0 - 376.4 -93.2 - 283.2

Total Department of Defence 186.6 67.8 - - 137.8 -24.7 367.5 -109.0 - 258.5


$m


$m


2015-16

$m


2015-16

$m

Return to the OPA

$m

Special Appropriation

$m

Total Appropriation

$m

Non-Appropriation

Receipts

$m

Other Non-Appropriated

Items

$m

TotalResources

Available

$mDefence Housing Australia

Administered appropriations - - - - - - - - - -Departmental appropriations - - - - - - - 276.1 - 276.1

Total Defence Housing Australia - - - - - - - 276.1 - 276.1

Total Portfolio 186.6 67.8 - - 137.8 -24.7 367.5 167.1 - 534.6

Note1. Figures shown include inter-agency transactions.


66

Table 55: Total Departmental and Administered Consolidated Cash Budget for the Department of Defence [1]

2015-16Budget

Estimate$m

APPROPRIATIONS AND CAPITALAppropriation (Bill 1) 28,976.2Appropriation - Contributed Equity (Bill 2) 2,875.2Appropriation (Bill 3) 186.6Appropriation (Bill 4) 67.8Appropriations for military superannuation[2] 2,334.1less Returns to the OPA -1,328.2Total cash available 33,111.7OPERATING ACTIVITIESCash received

Goods and services 454.4Net GST received 1,460.0Interest 28.0Other cash 86.8Fees 13.9

Total cash received 2,043.1Cash used

Employees 10,332.4Suppliers 11,240.6Net GST paid 1,460.0Grants 104.8Other cash 35.3Subsidies paid 103.3Military benefits 2,230.9

Total cash used 25,507.3Net cash from or (used by) operating activities -23,464.2INVESTING ACTIVITIESCash received

Proceeds from sales of land and buildings 196.4Proceeds from sales of infrastructure, plant and equipment 23.1Proceeds from sales of specialist military equipment 7.5Dividends 54.6Other -

Total cash received 281.6Cash used

Purchase of land and buildings 689.0Purchase of infrastructure, plant and equipment 764.4Purchase of specialist military equipment 6,808.6Purchase of intangibles 67.8Purchase of inventory 1,453.1Selling costs on sale of assets 5.7Finance costs 101.9

Total cash used 9,890.5Net cash from or (used by) investing activities -9,608.9FINANCING ACTIVITIESCash used

Repayment of debt 38.6Total cash used 38.6Net cash from or (used by) financing activities -38.6Net increase or (decrease) in cash and cash equivalents held -

Cash and cash equivalents at the beginning of the reporting period 11,530.0Effect of exchange rate movements on cash and cash equivalents -

Cash and cash equivalents at the end of the reporting period 11,530.0

Notes1. Figures shown eliminate interagency transac ions and transactions flowing between Departmental and Administered funding. 2. Cross reference with Table 72 Budgeted Administered Statement of Cash Flows for the Department of Defence for the period ended 30 June.


67

Table 56: Defence Resource Statement

Seria

l No.

Estimate as at

Budget2015-16

$'000

+

Proposed Additional Estimates

2015-16$'000

=

Total Estimate at Additional Estimates

2015-16$'000

TotalAvailable

Appropriation 2014-15

$'000ORDINARY ANNUAL SERVICES

Outcome 1 28,063,724 186,557 28,250,281 25,492,580Outcome 2 863,807 45 863,852 789,002Outcome 3 48,705 -4 48,701 67,740

1 Total Departmental outputs 28,976,236 186,598 29,162,834 26,349,3222 Total ordinary annual services (1) 28,976,236 186,598 29,162,834 26,349,322

OTHER SERVICESDepartmental non-operating

Equity injections 2,875,209 67,750 2,942,959 2,758,4913 Total Departmental non-operating 2,875,209 67,750 2,942,959 2,758,4914 Total other services (3) 2,875,209 67,750 2,942,959 2,758,4915 Total available annual appropriation (2+4) 31,851,445 254,348 32,105,793 29,107,813

SPECIAL APPROPRIATIONS

Special appropriations limited by criteria/entitlementDefence Forces Retirement Benefits Act, 1948 Part 1 s.15D and VIC, s.82ZJ 25,542 - 25,542 23,000Defence Force Retirement and Death Benefits Act, 1973 Part XII, s.125 1,872,626 - 1,872,626 1,794,000Military Superannuation and Benefits Act, 1991 Part V, s.17 3,212,447 -8,142 3,204,305 4,080,883Defence Force (Home Loan Assistance) Act, 1990 Part IV, s.38 1,116 -199 917 1,357Defence Home Ownership Assistance Scheme Act 2008 Part VI, s.84 118,661 -16,322 102,339 103,175

6 Total special appropriations 5,230,392 -24,663 5,205,729 6,002,4157 Total appropriations (5+6) 37,081,837 229,685 37,311,522 35,110,228

Funding from other sources 2,309,906 -108,981 2,200,925 2,513,673Returns from the OPA (net) -1,466,000 137,787 -1,328,213 -1,453,059Previous years' outputs (appropriation receivable) 171,222 -161,056 10,166 414,742Cash available 142,732 -131,202 11,530 35,490

8 Total other available resources 1,157,860 -263,452 894,408 1,510,8469 Total resourcing (7+8) 38,239,697 -33,767 38,205,930 36,621,074

Special AccountsOpening Balance 52,582 13,835 66,417 68,382Appropriation Receipts - - - -Appropriation Receipts - other agencies - - - -Non-Appropriation Receipts to Special Accounts 34,989 - 34,989 39,951

10 Total special accounts 87,571 13,835 101,406 108,333


68

Table 57: Third Party Payments to and from other Agencies [1]

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Revenue received from Defence Housing Australia for interest on loans, dividends and competitive neutrality payments (Administered) 115,359 116,813 1,454Payments made to Defence Housing Australia for the provision of services (Departmental) 578,104 716,079 137,975Payments made to Department of Foreign Affairs and Trade for the provision of services (Departmental) 23,247 23,247 -Payments made to the Commonwealth Superannuation Corporation (CSC) for the provision of services (Departmental) 30,549 40,120 9,571Payments made to the Attorney-General's Department for the provision of services (Departmental) 13,188 13,188 -Payments made to the Department of Finance for the provision of services (Departmental) 65,307 65,307 -Payments made to the Australian Federal Police for the provision of services (Departmental) 42,032 42,032 -Payments made to the Department of Human Services for the provision of services (Departmental) - 2,568 2,568

Note1. Third Party Payments to and from other Agencies include: - Inter-agency transactions in excess of $20.0m per annum; - Inter-agency transactions that were in excess of $20.0m in the previous year's annual statements; and - Inter-agency transactions relating to Budget Measures as disclosed in Table 7 Variation to Defence Funding.


69

3.3 BUDGETED FINANCIAL STATEMENTS

3.3.1 Departmental and Administered Budgeted Financial Statements

Table 58: Variation in Budgeted Departmental Comprehensive Income Statement (Showing Net Cost of Services) (for the period ended 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

EXPENSESEmployee benefits 11,667,963 11,676,698 8,735 0.1Supplier expenses 12,531,134 12,639,241 108,107 0.9Grants 104,465 104,835 370 0.4Depreciation and amortisation 4,535,334 4,554,067 18,733 0.4Finance costs 152,088 107,626 -44,462 -29.2Write-down of assets and impairment of assets 916,304 910,644 -5,660 -0.6Losses from sale of assets - - - -Other 36,481 35,303 -1,178 -3.2

Total expenses 29,943,769 30,028,414 84,645 0.3LESS:OWN-SOURCE INCOMEOwn-source revenue

Sales of goods and rendering of services 552,988 454,431 -98,557 -17.8Other revenue 52,127 57,473 5,346 10.3

Total own-source revenue 605,115 511,904 -93,211 -15.4Gains

Reversals of previous asset write-downs 328,746 320,687 -8,059 -2.5Sale of assets 28,286 28,289 3 -Other gains 5,386 4,700 -686 -12.7

Total gains 362,418 353,676 -8,742 -2.4Total own-source income 967,533 865,580 -101,953 -10.5Net cost of (contribution by) services 28,976,236 29,162,834 186,598 0.6

Revenue from Government 28,976,236 29,162,834 186,598 0.6Surplus (Deficit) attributable to the Australian Government - - - -Total comprehensive income attributable to the Australian Government - - - -


70

Table 59: Variation in Budgeted Departmental Balance Sheet (as at 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

ASSETSFinancial assets

Cash and cash equivalents 142,732 11,530 -131,202 -91.9Trade and other receivables 91,322 96,714 5,392 5.9Tax assets 196,637 106,002 -90,635 -46.1Appropriation receivable 158,530 10,166 -148,364 -93.6Other receivables 307,932 423,485 115,553 37.5

Total financial assets 897,153 647,897 -249,256 -27.8Non-financial assets

Land and buildings 18,099,022 18,113,703 14,681 0.1Infrastructure, plant and equipment 7,141,951 7,540,690 398,739 5.6Specialist military equipment 46,518,675 45,756,942 -761,733 -1.6Intangibles 794,076 746,303 -47,773 -6.0Heritage and cultural 1,002,315 1,006,955 4,640 0.5Inventories 6,199,126 6,371,718 172,592 2.8Prepayments 1,757,003 3,203,886 1,446,883 82.3

Total non-financial assets 81,512,168 82,740,197 1,228,029 1.5Assets held for sale 28,693 37,684 8,991 31.3

Total assets 82,438,014 83,425,778 987,764 1.2LIABILITIESPayables

Suppliers 2,482,671 2,266,569 -216,102 -8.7Other 284,419 344,747 60,328 21.2

Total payables 2,767,090 2,611,316 -155,774 -5.6Interest bearing liabilities

Leases 1,389,392 1,413,134 23,742 1.7Total interest bearing liabilities 1,389,392 1,413,134 23,742 1.7Provisions

Employee provisions 2,536,631 2,522,059 -14,572 -0.6Restoration, decontamination and decommissioning 1,003,971 1,006,949 2,978 0.3Other 5,318 290 -5,028 -94.5

Total provisions 3,545,920 3,529,298 -16,622 -0.5Total liabilities 7,702,402 7,553,748 -148,654 -1.9NET ASSETS 74,735,612 75,872,030 1,136,418 1.5EQUITY

Contributed equity 25,028,870 25,305,442 276,572 1.1Reserves 14,892,641 15,299,751 407,110 2.7Retained surplus (accumulated deficit) 34,814,101 35,266,837 452,736 1.3

Total equity 74,735,612 75,872,030 1,136,418 1.5


71

Table 60: Variation in Budgeted Departmental Statement of Cash Flows (for the period ended 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

OPERATING ACTIVITIESCash received

Appropriations 28,976,236 29,162,834 186,598 0.6Goods and services 552,988 454,431 -98,557 -17.8Net GST received 796,841 1,459,970 663,129 83.2Other cash received 52,127 57,473 5,346 10.3Cash transfer from the Official Public Account (receivables) 12,692 134,704 122,012 961.3

Total cash received 30,390,884 31,269,412 878,528 2.9Cash used

Employees 11,664,574 11,668,583 4,009 -Suppliers 11,202,746 11,240,647 37,901 0.3Net GST paid 796,841 1,459,970 663,129 83.2Grants 104,465 104,835 370 0.4Other cash used 36,481 35,303 -1,178 -3.2Cash transfer to the Official Public Account (receivables) 875 875 - -

Total cash used 23,805,982 24,510,213 704,231 3.0Net cash from (used by) operating activities 6,584,902 6,759,199 174,297 2.6INVESTING ACTIVITIESCash received

Proceeds from sales of land and buildings 196,361 196,361 - -Proceeds from sales of infrastructure, plant and equipment 23,064 23,069 5 -Proceeds from sales of specialist military equipment 7,549 7,549 - -Other cash received - - - -

Total cash received 226,974 226,979 5 -Cash used

Purchase of land and buildings 974,312 689,047 -285,265 -29.3Purchase of infrastructure, plant and equipment 587,750 764,427 176,677 30.1Purchase of specialist military equipment 6,556,394 6,808,626 252,232 3.8Purchase of intangibles 60,439 67,774 7,335 12.1Purchase of inventory 1,358,054 1,453,099 95,045 7.0Selling costs on sale of assets 5,693 5,695 2 -Finance costs 105,845 101,871 -3,974 -3.8

Total cash used 9,648,487 9,890,539 242,052 2.5Net cash from (used by) investing activities -9,421,513 -9,663,560 -242,047 2.6FINANCING ACTIVITIESCash received

Appropriations - contributed equity 2,875,209 2,942,959 67,750 2.4Total cash received 2,875,209 2,942,959 67,750 2.4Cash used

Repayment of debt 38,598 38,598 - -Cash to the Official Public Account - - - -

Total cash used 38,598 38,598 - -Net cash from (used by) financing activities 2,836,611 2,904,361 67,750 2.4Net increase (decrease) in cash and cash equivalents held - - - -

Cash and cash equivalents at the beginning of the reporting period 142,732 11,530 -131,202 -91.9Effect of exchange rate movements on cash and cash equivalentsat the beginning of the reporting period - - - -

Cash and cash equivalents at the end of the reporting period 142,732 11,530 -131,202 -91.9


72

Table 61: Budgeted Departmental Comprehensive Income Statement (Showing Net Cost of Services) (for the period ended 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000EXPENSES

Employee benefits 10,356,236 11,676,698 11,275,594 11,353,215 11,553,378Supplier expenses 11,800,680 12,639,241 12,241,657 13,300,324 13,749,078Grants 115,364 104,835 106,833 14,759 15,138Depreciation and amortisation 4,257,845 4,554,067 4,760,197 4,849,364 5,125,331Finance costs 137,869 107,626 149,961 158,196 169,740Write-down of assets and impairment of assets 1,421,750 910,644 947,457 986,404 1,027,105Foreign exchange losses 2,054Losses from sale of assets 51,643 - - - -Other 116,742 35,303 5,985 14,587 2,616

Total expenses 28,260,183 30,028,414 29,487,684 30,676,849 31,642,386LESS:OWN-SOURCE INCOME

Own-source revenueSales of goods and rendering of services 859,892 454,431 445,841 457,335 475,199Other revenue 790,683 57,473 48,894 50,468 52,052

Total own-source revenue 1,650,575 511,904 494,735 507,803 527,251Gains

Foreign exchange - - - - -Reversals of previous asset write-downs 294,866 320,687 336,212 352,537 369,701Sale of assets - 28,289 3,248 14,842 2,763Other gains 37,271 4,700 4,818 4,938 5,061

Total gains 332,137 353,676 344,278 372,317 377,525Total own-source income 1,982,712 865,580 839,013 880,120 904,776Net cost of (contribution by) services 26,277,471 29,162,834 28,648,671 29,796,729 30,737,610

Revenue from Government 26,298,242 29,162,834 28,648,671 29,796,729 30,737,610Surplus (Deficit) attributable to the Australian Government 20,771 - - - -OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves 407,115 - - - -Total other comprehensive income/(loss) 407,115 - - - -

Total comprehensive income attributable to the Australian Government 427,886 - - - -

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented in this table represent Defence inclusive of the former Defence Materiel Organisation.


73

Table 62: Budgeted Departmental Balance Sheet (as at 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000ASSETSFinancial assets

Cash and cash equivalents 44,150 11,530 11,530 11,530 11,530Trade and other receivables 68,777 96,714 96,714 96,714 96,714Tax assets 106,002 106,002 106,002 106,002 106,002Appropriation receivable 195,419 10,166 10,166 10,166 10,166Other receivables 628,080 423,485 382,304 358,674 354,829

Total financial assets 1,042,428 647,897 606,716 583,086 579,241Non-financial assets

Land and buildings 17,654,513 18,113,703 18,558,751 19,565,826 20,620,249Infrastructure, plant and equipment 7,352,640 7,540,690 7,942,408 8,350,251 8,361,209Specialist military equipment 42,651,237 45,756,942 47,846,249 50,928,037 55,838,417Intangibles 818,330 746,303 670,778 542,049 425,709Heritage and cultural 1,006,948 1,006,955 1,006,955 1,006,955 1,006,955Inventories 6,463,531 6,371,718 6,275,517 6,168,400 6,051,754Prepayments 1,384,462 3,203,886 3,203,867 3,203,848 3,203,828

Total non-financial assets 77,331,661 82,740,197 85,504,525 89,765,366 95,508,121Assets held for sale 37,684 37,684 37,684 37,684 37,684

Total assets 78,411,773 83,425,778 86,148,925 90,386,136 96,125,046LIABILITIESPayables

Suppliers 1,164,800 2,266,569 2,247,410 2,344,557 2,331,284Other 477,419 344,747 280,087 244,031 246,838

Total payables 1,642,219 2,611,316 2,527,497 2,588,588 2,578,122Interest bearing liabilities

Leases 1,440,999 1,413,134 1,373,301 1,333,443 1,291,849Total interest bearing liabilities 1,440,999 1,413,134 1,373,301 1,333,443 1,291,849Provisions

Employee provisions 2,358,927 2,522,059 2,580,195 2,630,827 2,684,489Restoration, decontamination and decommissioning 1,001,192 1,006,949 1,045,677 1,093,713 1,154,525Other 290 290 290 290 290

Total provisions 3,360,409 3,529,298 3,626,162 3,724,830 3,839,304Total liabilities 6,443,627 7,553,748 7,526,960 7,646,861 7,709,275NET ASSETS 71,968,146 75,872,030 78,621,965 82,739,275 88,415,771EQUITY

Contributed equity 22,321,616 25,305,442 28,055,377 32,172,687 37,849,183Reserves 15,299,466 15,299,751 15,299,751 15,299,751 15,299,751Retained surplus (accumulated deficit) 34,347,064 35,266,837 35,266,837 35,266,837 35,266,837

Total equity 71,968,146 75,872,030 78,621,965 82,739,275 88,415,771



74

Table 63: Budgeted Departmental Statement of Cash Flows (for the period ended 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000OPERATING ACTIVITIESCash received

Appropriations 26,082,690 29,162,834 28,648,671 29,796,729 30,737,610Goods and services 849,693 454,431 445,841 457,335 475,199Net GST received 658,642 1,459,970 1,425,573 1,545,791 1,609,780Interest 7 - - - -Other cash received 82,600 57,473 48,894 50,468 52,052Cash transfer from the Official Public Account (receivables) 1,036,575 134,704 - - -

Total cash received 28,710,207 31,269,412 30,568,979 31,850,323 32,874,641Cash used

Employees 10,440,150 11,668,583 11,214,815 11,300,387 11,496,909Suppliers 10,224,383 11,240,647 10,982,155 11,905,497 12,397,883Net GST paid 676,768 1,459,970 1,425,573 1,545,791 1,609,780Grants 115,305 104,835 106,833 14,759 15,138Other cash used 37,834 35,303 5,985 14,587 2,616Cash transfer to the Official Public Account (receivables) 1,038,985 875 897 919 942

Total cash used 22,533,425 24,510,213 23,736,258 24,781,940 25,523,268Net cash from (used by) operating activities 6,176,782 6,759,199 6,832,721 7,068,383 7,351,373INVESTING ACTIVITIESCash received

Proceeds from sales of land and buildings 65,182 196,361 14,127 26,495 15,176Proceeds from sales of infrastructure, plant and equipment 31,310 23,069 23,308 23,590 19,326Proceeds from sales of specialist military equipment 1,652 7,549 7,549 7,549 7,549Proceeds from sales of heritage and cultural assets - - - - -Other cash received 181 - - - -

Total cash received 98,325 226,979 44,984 57,634 42,051Cash used

Purchase of land and buildings 922,712 689,047 1,050,865 1,633,546 1,715,809Purchase of infrastructure, plant and equipment 493,127 764,427 971,287 996,910 615,771Purchase of specialist military equipment 6,302,121 6,808,626 5,997,362 7,070,882 9,147,457Purchase of heritage and cultural assets 80 - - - -Purchase of intangibles 81,935 67,774 65,942 13,141 18,360Purchase of inventory 1,005,880 1,453,099 1,387,033 1,374,665 1,417,772Selling costs on sale of assets 2,609 5,695 4,982 5,084 5,171Finance costs 101,151 101,871 111,233 110,160 108,928

Total cash used 8,909,615 9,890,539 9,588,704 11,204,388 13,029,268Net cash from (used by) investing activities -8,811,290 -9,663,560 -9,543,720 -11,146,754 -12,987,217FINANCING ACTIVITIESCash received

Appropriations - contributed equity 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Total cash received 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Cash used

Repayment of debt 111,995 38,598 39,833 39,858 41,594Cash to the Official Public Account - - - - -

Total cash used 111,995 38,598 39,833 39,858 41,594Net cash from (used by) financing activities 2,646,496 2,904,361 2,710,999 4,078,371 5,635,844Net increase (decrease) in cash and cash equivalents held 11,988 - - - -

Cash and cash equivalents at the beginning of the reporting period 35,490 11,530 11,530 11,530 11,530Effect of exchange rate movements on cash and cash equivalents at beginning of the reporting period -3,328 - - - -

Cash and cash equivalents at the end of the reporting period 44,150 11,530 11,530 11,530 11,530



75

Table 64: Departmental Statement of Changes in Equity — Summary of Movement (Budget year 2015-16)

Retained Earnings

$'000

Asset Revaluation

Reserve$'000

Contributed Equity/Capital

$'000

Total Equity

$'000Opening balance as at 1 July 2015[1]

Balance carried forward from previous period 34,749,691 15,299,751 22,476,981 72,526,423Adjustment for changes in accounting policies - - - -

Adjusted opening balance 34,749,691 15,299,751 22,476,981 72,526,423Comprehensive income

Comprehensive income recognised directly in equity:Gain/loss on revaluation of property - - - -

Subtotal comprehensive income - - - -Surplus (Deficit) for the period - - - -

Total comprehensive income recognised directly in equity - - - -Transactions with owners

Distribution to ownersReturns on capital:

Restructuring - - - -Other - - -114,498 -114,498

Contributions by ownersAppropriation (equity injection) - - 2,942,959 2,942,959Other 517,146 - - 517,146

Sub-total transaction with owners 517,146 - 2,828,461 3,345,607Transfers between equity components - - - -

Estimated closing balance as at 30 June 2016 35,266,837 15,299,751 25,305,442 75,872,030

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. The figures presented as the 2015-16 opening balance represent Defence inclusive of the former Defence Materiel Organisation.


76

Table 65: Departmental Capital Budget Statement [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000CAPITAL APPROPRIATIONS

Equity injection 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Total capital appropriations 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Represented by:

Purchase of non-financial assets 2,646,496 2,904,361 2,710,999 4,078,371 5,635,844Annual finance lease costs 111,995 38,598 39,833 39,858 41,594Other items - - - - -

Total Items 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438PURCHASE OF NON-FINANCIAL ASSETS

Funded by capital appropriations 2,758,491 2,942,959 2,750,832 4,118,229 5,677,438Funded by finance lease costs 68,555 - - - -Funded internally from departmental resources[2] 5,041,484 5,378,426 5,334,184 5,595,811 5,819,506

Total 7,868,530 8,321,385 8,085,016 9,714,040 11,496,944Reconciliation of cash used to acquire assets to asset movement table

Total purchases 7,868,530 8,321,385 8,085,016 9,714,040 11,496,944less additions by finance lease 68,555 - - - -less additions by creditors/borrowings - - - - -plus borrowing/finance costs 101,151 101,871 111,233 110,160 108,928plus annual finance lease costs 111,995 38,598 39,833 39,858 41,594less gifted assets - - - - -less s75/restructuring - - - - -

Total cash used to acquire assets 8,013,121 8,461,854 8,236,082 9,864,058 11,647,466

Notes

2. Includes the following sources of funding: - annual and prior year appropriations; - donations and contr butions; - gifts; - internally developed assets; - s74 relevant agency receipts; and - proceeds from the sale of assets.

1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented represent Defence inclusive of the former Defence Materiel Organisation.


77

Table 66: Statement of Departmental Asset Movements (2015-16) [1]

Land$'000

Buildings

$'000

Specialist Military

Equipment$'000

Infrastructure, Plant and

Equipment$'000

Intangibles$'000

Heritage and Cultural

Assets $'000

AssetsHeld for

Sale $'000

Total$'000

As at 1 July 2015Gross book value 5,110,068 12,903,102 81,118,543 7,713,855 1,641,857 1,060,343 37,684 109,585,452Accumulated depreciation/amortisation and impairment - 358,662 38,465,858 356,458 823,528 53,388 - 40,057,894Opening net book balance 5,110,068 12,544,440 42,652,685 7,357,397 818,329 1,006,955 37,684 69,527,558CAPITAL ASSET ADDITIONSEstimated expenditure on new or replacement assets

By purchase - appropriation equity 29,370 659,677 6,824,293 764,385 67,326 - - 8,345,051By transfer from another agency - 517,146 - - - - - 517,146By purchase - donated funds - - - - - - - -By finance lease - - - - - - - -

Total additions 29,370 1,176,823 6,824,293 764,385 67,326 - - 8,862,197Other movementsAssets held for saleReclassifications[2] - - 82,478 12,335 - - - 94,813Depreciation and amortisation - 559,763 3,300,146 554,806 139,352 - - 4,554,067Disposal of entities or other operations (including restructuring) 157,152 12,779 - 23,064 - - - 192,995Other disposals[3] - 17,304 502,368 15,557 - - - 535,229Total other movements 157,152 589,846 3,720,036 581,092 139,352 - - 5,187,478As at 30 June 2016Gross book value 4,982,286 14,049,842 87,522,946 8,451,954 1,709,183 1,060,343 37,684 117,814,238Accumulated depreciation/amortisation and impairment - 918,425 41,766,004 911,264 962,880 53,388 - 44,611,961Closing net book value 4,982,286 13,131,417 45,756,942 7,540,690 746,303 1,006,955 37,684 73,202,277

Notes

2. Reclassification include assets first found.3. Other disposals includes write-offs.

1. As a result of the First Pronciples Review, the Defence Materiel Organisation will be disbanded and transferred into Defence. The figures presented in this table, including the 2015-16 opening balance, represent Defence inclusive of the former Defence Materiel Organisation.


78

Table 67: Variation in Schedule of Budgeted Income and Expenses Administered on Behalf of Government (for the period ended 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

INCOME ADMINISTERED ON BEHALF OF GOVERNMENTRevenueNon-taxation

Interest 30,936 28,027 -2,909 -9.4Dividends 50,476 60,215 9,739 19.3Military superannuation contributions 1,331,754 1,336,145 4,391 0.3Fees 14,511 13,871 -640 -4.4Other 31,402 32,768 1,366 4.4

Total non-taxation 1,459,079 1,471,026 11,947 0.8Total revenues administered on behalf of Government 1,459,079 1,471,026 11,947 0.8EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT

Subsidies 121,642 103,256 -18,386 -15.1Military retention benefits 77,940 69,798 -8,142 -10.4Military superannuation benefits 4,920,967 5,032,675 111,708 2.3

Total expenses administered on behalf of Government 5,120,549 5,205,729 85,180 1.7


79

Table 68: Variation in Schedule of Budgeted Assets and Liabilities Administered on Behalf of Government (as at 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

ASSETS ADMINISTERED ON BEHALF OF GOVERNMENTFinancial assets

Cash and cash equivalents - - - -Trade and other receivables 63,050 79,003 15,953 25.3Investments accounted for using the equity method 2,373,768 2,408,530 34,762 1.5Loans 529,580 509,580 -20,000 -3.8

Total financial assets 2,966,398 2,997,113 30,715 1.0Non-financial assets

Prepayments 189,496 210,141 20,645 10.9Total non-financial assets 189,496 210,141 20,645 10.9Total assets administered on behalf of Government 3,155,894 3,207,254 51,360 1.6LIABILITIES ADMINISTERED ON BEHALF OF GOVERNMENTPayables

Other 5,630 5,502 -128 -2.3Total payables 5,630 5,502 -128 -2.3Provisions

Superannuation - DFRB[1] 454,200 426,910 -27,290 -6.0Superannuation - DFRDB[2] 31,048,000 30,565,982 -482,018 -1.6Superannuation - MSBS[3] 30,627,149 31,519,297 892,148 2.9

Total provisions 62,129,349 62,512,189 382,840 0.6Total liabilities administered on behalf of Government 62,134,979 62,517,691 382,712 0.6

Notes1. Defence Force Retirement Benefits.2. Defence Force Retirement and Death Benefits.3. Military Superannuation and Benefits Scheme.


80

Table 69: Variation in Schedule of Budgeted Administered Cash Flows (for the period ended 30 June)

2015-16Budget

Estimate$'000

2015-16Revised

Estimate$'000

Variation$'000

Variation%

OPERATING ACTIVITIESCash received

Interest 30,936 28,027 -2,909 -9.4Military superannuation contributions 1,347,113 1,336,145 -10,968 -0.8Fees 14,416 13,871 -545 -3.8Other 35,078 29,362 -5,716 -16.3

Total cash received 1,427,543 1,407,405 -20,138 -1.4Cash used

Subsidies paid 119,777 103,256 -16,521 -13.8Military benefits 2,230,885 2,230,885 - -

Total cash used 2,350,662 2,334,141 -16,521 -0.7Net cash from or (used by) operating activities -923,119 -926,736 -3,617 0.4INVESTING ACTIVITIESCash received

Dividends 50,274 54,637 4,363 8.7Total cash received 50,274 54,637 4,363 8.7Cash used

Loans 20,000 - -20,000 -100.0Total cash used 20,000 - -20,000 -100.0Net cash from or (used by) investing activities 30,274 54,637 24,363 80.5Net increase (decrease) in cash held -892,845 -872,099 20,746 -2.3

Cash at the beginning of the reporting period - - - -Cash from the Official Public Account for appropriations 2,370,662 2,334,141 -36,521 -1.5Cash to the Official Public Account -1,477,817 -1,462,042 15,775 -1.1Effect of exchange rate movements on cash and cash equivalents - - - -

Cash and cash equivalents at the end of the reporting period - - - -


81

Table 70: Schedule of Budgeted Income and Expenses Administered on Behalf of Government (for the period ended 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000INCOME ADMINISTERED ON BEHALF OF GOVERNMENTRevenueNon-taxation

Interest 28,610 28,027 28,027 28,027 28,027Dividends 54,637 60,215 50,767 49,952 59,318Military superannuation contributions 1,285,809 1,336,145 1,221,423 1,152,008 1,084,574Fees 14,297 13,871 15,644 16,440 17,236Foreign exchange 798 - - - -Other 46,140 32,768 27,271 19,131 21,945

Total non-taxation 1,430,291 1,471,026 1,343,132 1,265,558 1,211,100Total revenues administered on behalf of Government 1,430,291 1,471,026 1,343,132 1,265,558 1,211,100EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT

Write-down and impairment of assets 11 - - - -Subsidies 98,363 103,256 111,627 118,275 127,202Military retention benefits 68,389 69,798 79,985 93,548 107,299Military superannuation benefits 5,760,238 5,032,675 5,140,411 5,259,687 5,388,696

Total expenses administered on behalf of Government 5,927,001 5,205,729 5,332,023 5,471,510 5,623,197

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented represent Defence inclusive of the former Defence Materiel Organisation.


82

Table 71: Schedule of Budgeted Assets and Liabilities Administered on Behalf of Government (as at 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000ASSETS ADMINISTERED ON BEHALF OF GOVERNMENTFinancial assets

Cash and cash equivalents - - - - -Trade and other receivables 74,344 79,003 69,837 69,311 78,973Investments accounted for using the equity method 2,488,389 2,408,530 2,450,631 2,517,508 2,588,665Loans 509,580 509,580 509,580 509,580 509,580

Total financial assets 3,072,313 2,997,113 3,030,048 3,096,399 3,177,218Non-financial assets

Prepayments 173,539 210,141 271,556 299,608 328,609Total non-financial assets 173,539 210,141 271,556 299,608 328,609Total assets administered on behalf of Government 3,245,852 3,207,254 3,301,604 3,396,007 3,505,827LIABILITIES ADMINISTERED ON BEHALF OF GOVERNMENTPayables

Other 5,502 5,502 5,502 5,502 5,502Total payables 5,502 5,502 5,502 5,502 5,502Provisions

Superannuation - DFRB[2] 537,400 426,910 404,918 383,425 362,489Superannuation - DFRDB[3] 42,408,000 30,565,982 30,819,863 31,027,448 31,188,073Superannuation - MSBS[4] 51,156,000 31,519,297 34,194,273 36,914,423 39,697,128

Total provisions 94,101,400 62,512,189 65,419,054 68,325,296 71,247,690Total liabilities administered on behalf of Government 94,106,902 62,517,691 65,424,556 68,330,798 71,253,192

Notes

2. Defence Force Retirement Benefits.3. Defence Force Retirement and Death Benefits.4. Military Superannuation and Benefits Scheme.

1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented represent Defence inclusive of the former Defence Materiel Organisation.


83

Table 72: Schedule of Budgeted Administered Cash Flows (for the period ended 30 June) [1]

2014-15ActualResult

$'000

2015-16Revised

Estimate$'000


$'000


$'000


$'000OPERATING ACTIVITIESCash received

Interest 28,610 28,027 28,027 28,027 28,027Military superannuation contributions 1,369,877 1,336,145 1,221,423 1,152,008 1,084,574Fees 15,102 13,871 15,644 16,440 17,236Other 50,440 29,362 25,980 25,542 27,114

Total cash received 1,464,029 1,407,405 1,291,074 1,222,017 1,156,951Cash used

Subsidies paid 98,346 103,256 111,627 118,275 127,202Military benefits 2,148,777 2,230,885 2,362,707 2,464,317 2,593,321

Total cash used 2,247,123 2,334,141 2,474,334 2,582,592 2,720,523Net cash from or (used by) operating activities -783,094 -926,736 -1,183,260 -1,360,575 -1,563,572INVESTING ACTIVITIESCash received

Dividends 53,991 54,637 60,215 50,767 49,952Total cash received 53,991 54,637 60,215 50,767 49,952Cash used

Loans - - - - -Total cash used - - - - -Net cash from (used by) investing activities 53,991 54,637 60,215 50,767 49,952Net increase (decrease) in cash held -729,103 -872,099 -1,123,045 -1,309,808 -1,513,620

Cash at he beginning of reporting period - - - - -Cash from the Official Public Account for appropriations 2,247,123 2,334,141 2,474,334 2,582,592 2,720,523Cash to he Official Public Account -1,518,020 -1,462,042 -1,351,289 -1,272,784 -1,206,903Effect of exchange rate movements on cash and cash equivalents - - - - -

Cash and cash equivalents at the end of the reporting period - - - - -

Note1. As a result of the First Principles Review, the Defence Materiel Organisation has been disbanded and transferred into Defence. From 2015-16 onwards, the figures presented represent Defence inclusive of the former Defence Materiel Organisation.


84

3.3.2 Notes to the Financial Statements

The financial statements have been prepared in accordance with the Australian Accounting Standards and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR).


85

APPENDICES

Appendix A Defence Cooperation Programme

Appendix B The Unapproved Major Capital Investment Programme (also known as the Defence Capability Plan)

Appendix C Top 30 Acquisition Projects by 2015-16 Forecast Expenditure

Appendix D Current Status of Previously Reported Top 30 Projects (Projects Reported in the Last Five Financial Years)

Appendix E Top 10 Minor Capital Investment Projects by 2015-16 Forecast Expenditure

Appendix F Top 30 Sustainment Products by 2015-16 Forecast Expenditure

Appendix G Capital Facilities Programme

Appendix H Status of Major Projects Foreshadowed for Government and Parliamentary Standing Committee on Public Works Consideration (PWC) in 2015-16


86

APPENDIX A: DEFENCE COOPERATION PROGRAMME

No changes have been made to the Defence Cooperation Programme since the Portfolio Budget Statements 2015-16.


87

APPENDIX B: THE UNAPPROVED MAJOR CAPITAL INVESTMENT PROGRAMME (ALSO

KNOWN AS THE DEFENCE CAPABILITY PLAN)

No changes have been made to the Unapproved Major Capital Investment Programme since the PBS 2015-16.

Major Projects Recently Approved by Government

Table 73 identifies major projects that have been approved since publication of the PBS 2015-16.

Table 73: Significant Defence Capability Plan Projects with Second Pass Approval

Project Title Project Description

LAND 19 Phase 7A Counter Rocket, Artillery and Mortar – NPOC only

AIR 5428 Phase 1 Pilot Training System

AIR 7403 Phase 3 Additional Multi Role Tanker Transport Aircraft

LAND 121 Phase 4 Overlander – Protected Mobility Vehicle Light

LAND 125 Phase 3C Soldier Enhancement Version 2 Lethality

LAND 2072 Phase 2B Battlespace Communication System

SEA 1770 Phase 1 Rapid Environmental Assessment


88

APPENDIX C: TOP 30 ACQUISITION PROJECTS BY 2015-16 FORECAST EXPENDITURE

Table 74: Top 30 Projects by 2015-16 Forecast Expenditure (Gross Plan)

Project Number/

Phase

Approved Project

Expenditure $m

Cumulative

Expenditure to 30 June

2015 $m

Budget Estimate 2015-16

$m


$m Variation

$m Project Performance Update and Explanation of Variation

Aerospace Systems

Growler Airborne Electronic Attack Capability AIR 5349 Phase 3

3,751 1,649 890 420 -470

The first two aircraft rolled off the Boeing St Louis, US production line during July-August 2015 and are currently undergoing developmental test and evaluation in China Lake, California, US. Aircraft flight test will also be completed this year, culminating in the US Navy certification of the aircraft and mission planning software. The ALQ-99 and training missile production continues, as does production of the remaining 10 aircraft.

The variation is primarily driven by a revised FMS expenditure profile resulting in first quarter 2015-16 aircraft production and Airborne Electronic Attack (AEA) kit costs being paid in June 2015.

Maritime Patrol and Response Aircraft System AIR 7000 Phase 2

4,109 654 717 766 49

Following project authorisation, the US Navy has entered into contracts on the Commonwealth’s behalf with Boeing for Australia’s first four P-8A aircraft and the Flight Crew, Mission Crew, and Maintenance Training Systems. Australia’s first P-8A aircraft began production in October 2015. The variation is due to acceleration of payments for aircraft and the Flight Crew and Mission Crew Training Systems.

Additional C-17A AIR 8000 Phase 4

1,401 904 261 159 -102

The seventh and eighth aircraft were delivered to 36 Squadron at RAAF Base Amberley, Queensland in July and November 2015 respectively, and are in service with the Air Force. The variation is primarily driven by a revised FMS expenditure profile resulting in first quarter 2015-16 aircraft production being paid in June 2015.

Battlefield Airlift - Caribou Replacement AIR 8000 Phase 2

1,409 583 230 174 -56

Three aircraft have been accepted by the Commonwealth. The first and second aircraft were delivered to 35 Squadron at RAAF Base Richmond, New South Wales, in June and September 2015 respectively. The third aircraft will remain in the USA to support training requirements. The variation is primarily due to delayed aircraft production, spares ordering, and contracting of training devices under the FMS contract.


89

Table 74 (Continued): Top 30 Projects by 2015-16 Forecast Expenditure (Gross Plan)

Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Lead-In Fighter Capability Assurance Program AIR 5438 Phase 1A

276 115 68 63 -5

Flight testing is progressing, with initial operational test and evaluation activities being conducted leading into the final phase of acceptance flight testing in mid 2016. Construction of simulator facilities remains on schedule to support installation of the simulators at RAAF Bases Williamtown, New South Wales and Pearce, Western Australia. Capability restrictions implemented for flight testing have been assessed as unacceptable for operations. To remove the capability restrictions, the Commonwealth has agreed a set of additional software assurance activities with BAE Systems UK. A re-baselined schedule has been negotiated with BAE Systems UK to recognise the impact to flight testing and conduct of the additional software assurance activities, resulting in schedule slippage of at least six months. The variation is a result of the contract schedule re-baseline to recognise the delay to the commencement of flight testing and incorporation of additional software assurance activities.

Air to Air Refuelling Capability AIR 5402 1,820 1,692 67 74 7

In November 2015, the supplier, Airbus Defence and Space, met all the deliverables against the exit criteria for the final milestone - MS27. Transition to sustainment shall be completed by December 2015. Three out of five KC-30A aircraft have completed the KC-30A Block Upgrade Program to bring them to a common standard configuration. Key risk to achieving Final Material Release date is schedule slippage of the modification program due to third party suppliers, green aircraft maintenance and sustainment intervention due to Operational requirement. The variation is primarily due to an increase in the required level of aerial refuelling boom spares as a result of higher usage, and a delay in the Simulator Final Accreditation milestone 17. The recognition of an expense related to recoveries from the contractor also contributed to the increase.

AEW&C Interoperability Compliance Upgrade AIR 5077 Phase 5A

640 18 51 169 119

A contract has been signed with Boeing Defence Australia to design, prototype, test and deliver upgraded mission computing and Identification friend or foe capabilities, and to complete design activities on selected interoperability upgrades for the E-7 Wedgetail aircraft and its support systems. The variation is due to the project receiving Combined Pass Approval for the continued acceleration, through to delivery of two interim Mode 5 Identification Friend or Foe aircraft and associated interim support systems.


90


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Electronic Systems

Battlefield Command Systems LAND 75 Phase 4

369 185 102 110 8

The project has completed the majority of vehicle installations based on the designs delivered under LAND 75 Phase 3.4. The design for integration of the Battle Management System (BMS) into the M113AS4 Armoured Personnel Carriers has been finalised in preparation for installation activities commencing in early 2016. Risk reduction activities that were required to generate information for a future project approval consideration by government have been completed. The project is on schedule. The variation is due to a new requirement to relocate vehicles for the BMS Installation and the exchange rate.

Military Satellite Capability – Wideband Terrestrial Infrastructure

JP 2008 Phase 5B1

205 30 81 112 31

The initial acceptance testing and delivery of small, medium and large transportable satellite terminals remains on track to complete during 2015-16. The purchase and delivery of spares occurred earlier than forecasted. Exchange rate movement has also contributed to the increase in budget.

Maritime Communication Modernisation SEA 1442 Phase 4

458 54 71 56 -15

During 2015-16, the project finalised system preliminary design and is progressing detailed design and system level integration. In 2016-17, this project will finalise the system-level design and system integration in a shore environment prior to commencing First of Class installation. The project remains on schedule. Variation is mainly due to savings as a result of reduced cost of V/UHF radios being procured through FMS; early achievement in 2014-15 of Long Lead Time Item Review milestone originally scheduled in 2015-16; and re-scheduling of some initial spares procurement into 2016-17.

Improved Tactical Electronic Support Capability for ANZAC Class

SEA 1448 Phase 4A

282 70 69 54 -14

The project has successfully completed First of Class sea acceptance trials on HMAS Warramunga. Delivery of production systems and installation of the capability across the Anzac Class will continue with throughout 2016 and 2017. Some planned work for 2015-16 was brought forward and conducted in 2014-15. The remaining work is now schedule to be conducted in 2016-17.


91


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Civil Military Air Traffic System (CMATS) AIR 5431 Phase 3 731 4 63 37 -25

The Airservices Australia led negotiations for the Civil Military Air Traffic Management System Acquisition and Support contracts with Thales Australia continue. While many complex issues have been resolved, the negotiations are falling behind schedule with contract signatures now expected to slip to the fourth quarter of 2016. In order to mitigate schedule slippage, a number of advanced work orders have been put in place covering initial plans and critical path engineering activities. Variation has been caused by contract negotiation delays and revised contract signature dates.

C-130J Large Aircraft Infrared Countermeasures (LAIRCM)

AIR 5416 Phase 4B2 231 34 46 41 -5

The Modification Readiness Review prerequisite for the commencement of the C-130J LAIRCM modification program was successfully completed in November 2015 and cleared the way for the induction of the first C-130J with Lockheed Martin in the US. Based on progress to date and the refinement of the schedule associated with the modification of the first four aircraft in the US, achievement of IOC will occur around mid 2016 which is three months ahead of schedule. The awarding of the firm fixed price design contract by US Air Force to Lockheed Martin under the FMS case has been delayed until early 2016, resulting in the variation.

Fixed Defence Air Traffic Control Surveillance Sensors

AIR 5431 Phase 2 196 27 41 22 -19

Prime Contract: Airbus Defence and Space (Contract signature occurred on 4 June 2015). The contractor has delivered the initial tranche of management plans which have been approved by the Commonwealth. Initial design work has commenced and the first requirements review will be held in 2016. The variation is due to delays in contract negotiations.


92


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Helicopters, Tactical Unmanned Aerial Systems and Guided Weapons

Future Naval Aviation Combat System (FNACS) AIR 9000 Phase 8

3,474 1,607 546 344 -203

Aircraft production continues on schedule. To date 13 aircraft have been delivered to the Navy with a further nine aircraft on schedule for delivery mid-2016, providing a total of 22 aircraft in the inventory. The final two aircraft are scheduled for delivery in third quarter 2016. IOC at sea was declared by the CN on 24 September 2015. The variation reflects the 2014-15 outcome and a revised FMS expenditure profile resulting in first quarter 2015-16 production being paid in June 2015. The possibility of a further end of year variation of -$58m is emerging following a mid year review of the delivery schedule.

Multi-Role Helicopter (MRH) AIR 9000 Phase 2

3,762 2,730 212 171 -41

The 34th production aircraft was accepted into service in November 2015 and a further three production aircraft are forecast for delivery by the end of 2015-16. Number 11 of 13 aircraft was accepted out of the retrofit program and the remaining two aircraft are on schedule for delivery by the end of 2015-16. Ongoing development of the MRH90 capability, including successful deployments on land and at sea, saw declaration of a troop size (4 aircraft) deployable airmobile capability in September 2015. The variance is primarily due to reprogramming of funds in relation to prime contract deliverables and the procurement of training devices. This is partially offset by deliveries of additional Spares and Support and Test Equipment, payments against the Full Flight Mission Simulator Contract and foreign exchange variations.

Evolved Sea Sparrow Missile Upgrade SEA 1352 Phase 1

392 63 97 96 -2

This project will upgrade the existing Evolved Sea Sparrow Missile capability to ensure that the Navy’s surface combatant force can defeat the evolving regional anti ship missile threat. Post first pass, the project is funding Australia’s share of the NATO Sea Sparrow Consortium’s development of the Block 2 missile and ship integration studies and remains on track. Minor overall variance due to reprogramming of payments to the NATO Sea Sparrow Consortium.


93


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Helicopter Aircrew Training System AIR 9000 Phase 7 482 45 67 67 ..

Construction of the facilities at HMAS Albatross has begun and is expected to be completed on time to allow delivery of the key support elements such as the first flight simulator to commence aircrew instructor training in early 2017. Initial training of flight instructors on the EC135 helicopters was completed in Germany in September-October 2015. The first of the helicopters have been delivered to the Prime Contractor, Boeing Defence Australia. The project is behind schedule in the design of the training system. The Project Team and Prime Contractor remain focussed on schedule recovery to ensure pilot training commences in 2018.

Medium Lift Helicopters AIR 9000 Phase 5C 639 383 63 44 -19

The final CH-47F aircraft was delivered to RAAF Townsville, Queensland on 24 August 2015, three weeks ahead of schedule. Other project achievements include IMR on 1 July 2015 and Australian Military Type Certification and Service Release on 18 November 2015. The Project Team is focussed upon supporting the Army’s acceptance into operational service activities in the lead-up to planned declaration of IOC in early 2016. Variation is mainly due to savings as a result of reduced costs against various FMS case deliverables including aircraft production.


94


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Joint Strike Fighter

New Air Combat Capability AIR 6000

Phase 2A/B 16,020 684 463 385 -78

Both of Australia’s F-35 pilots have qualified and continue to operate at the International Pilot Training Centre, Luke Air Force Base Arizona. The long lead items and support for next eight F-35A aircraft have been contracted. The construction of facilities at RAAF Base Williamtown, New South Wales has continued on schedule. The sustainment model, including training for Australian based support continues to be developed.

The risk profile of the project remains largely unchanged:

Agreement by the US to fund the next two years of production to enable planned ramp up in production represents a reduction in aircraft cost risk for Australia.

Stand up and delivery of an effective and timely F-35 Australian based training has emerged as a risk.

The JSF air system continues to mature at a slow and steady pace. The Autonomic Logistic Information System (ALIS) and reprogramming capabilities remain major risks.

The timely delivery of key infrastructure at RAAF Base Williamtown and RAAF Base Tindal, Northern Territory, remain a high risk. The potential for the RAAF Base Williamtown ground water contamination issue to impact facilities delivery being an emerging risk which is being managed.

The variance can be primarily attributed to delays in finalising contracts and the variable receipt of invoices through the US Government contracting processes.


95


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Air Warfare Destroyer

Air Warfare Destroyer Program SEA 4000 Phase 3

9,109 5,958 746 716 -30

The keel-laying ceremony for Ship 03, NUSHIP Sydney, took place in November 2015 and consolidation of Ship 02, NUSHIP Brisbane, is expected to be completed in December 2015. Blocks for NUSHIP Sydney have started to arrive in Adelaide from BAE Systems (BAE/S) in Melbourne, with block deliveries from BAE/S and Forgacs in Newcastle, New South Wales continuing until mid-2016. The AWD project is expected to contract the AWD Reform Strategy’s long term arrangements in December 2015, which will bring a re-baselined cost and schedule. The key challenges for this project remain the same - to increase shipyard productivity, ensure the most efficient use of current resources, and effectively manage costs. The variation is mainly attributable to the reprogramming of FMS, and Programme Management Office deliverables as part of the Air Warfare Destroyer reform. The total budget estimates incorporate an overall real cost increase to the budget.

Land Systems

Medium and Heavy Capability (MHC), Field Vehicles, Modules and Trailers (FVMT)

LAND 121 Phase 3B

3,428 147 205 169 -35

Design activities for the heavy integrated load handling and medium weight tray variants and flatrack have been completed and verification activities have commenced. The vehicles are on track to be delivered in April 2016 for training development and the conduct of pilot training. The design program for the remaining vehicle and module variants is on schedule to be finalised by mid-2016. The initial tranche of trailers has been accepted, and the design program continues for the remaining trailer variants. Introduction into service for the medium/heavy capability remains on schedule to commence in 2017. The variation is due to reprogramming of systems review milestones, associated escalation and reprogramming of ILS deliverables.


96


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Enhancements to Special Operations Capability JP 2097 Phase 1B 350 100 122 130 8

This project has delivered a range of tactical radios and communications ancillary items. The project is expecting a delay of approximately three months in the delivery of the first 32 vehicles due to a sub-contractor going into administration. A schedule recovery plan is being finalised with the prime contractor to determine the quantity of vehicles that will still be delivered in 2015-16. FMR remains on schedule. This variation is due to supplementation from the MYEFO 2016-17 foreign exchange rate update.

Light and Lightweight Capability (LLC) Field Vehicles, Modules and Trailers

LAND 121 Phase 3 1,017 736 120 131 12

The delivery of vehicles and trailers has continued as programmed. The first production ambulance modules were accepted by Defence in June 2015. In September 2015, full rate production commenced, along with the concurrent introduction into service of the ambulance variant to Defence units. Performance testing of two prototype Command Post Mobiles (CPM) was conducted. Low rate initial production commenced in September 2015 with initial deliveries to Defence units occurring in November 2015. The overall production schedule of CPM remains the key risk. It is expected that this risk will be reduced once Full Rate Production is stabilised in early 2016. The variation is due to work on the ambulance module intercom and installation of communications equipment within the CPM module being brought forward.


97


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Mounted Combat Reconnaissance Capability LAND 400 Phase 2 117 .. 73 14 -59

The request for tender (RFT) was released in February 2015 and closed in September 2015. Initial screening was completed in September 2015 and all tenders recommended for further evaluation. The evaluation report is currently being finalised. The initial shortlisting of tenders to participate in Stage 2 of the solicitation process, the Risk Mitigation Activities (RMA) is scheduled to be completed in February 2016. The key risks for the project during the remainder of 2015-16 are protracted tender evaluation activities or extended contract negotiations with shortlisted tenderers, all of which would result in delays to the commencement of risk mitigation activities. The variation is due to extensions to the RFT closure date and a refinement of costs expected to be incurred for the RMA.

Soldier Enhancement Version 2 - Survivability LAND 125 Phase 3B 186 27 62 78 15

Prime Contractor: Load Carriage Equipment: Australian Defence Apparel; Protection Equipment (Body Armour): Craig International Ballistics; Tiered Combat Helmets Tranche 1: Spearpoint Solutions and Technology; Combat Hearing Protection Tranche 1: J Blackwood & Son. Tranches 2/3 Combat Hearing Protection: Defcon Technologies Group, The project will deliver modernised individual soldier survivability capabilities including enhancements to body armour and helmets, individual load carriage, eye protection and hearing protection. The project achieved IOC of 7,000 Soldier Combat Ensemble (SCE) sets during 2015-16 and will commence the delivery of the second tranche of SCE in mid-2016. The key risk for this project is late supplier deliveries of individual equipments to support second tranche SCE requirements. The variation is due to deliveries for some SCE items being brought forward from 2016-17 to take advantage of supplier production capacity and for SCE adaptive acquisition enhancements that were delivered.


98


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Bushmaster Protected Mobility Vehicle LAND 116 Phase 3

1,251 986 49 47 -2

The delivery of the final production period five vehicles has been delayed from quarter four of 2015-16 until quarter one of 2016-17 to allow the contractor to fulfil orders with the Netherlands Government. Installation is continuing of External Composite Armour mounting points to previously manufactured vehicles. The project closure is now expected in quarter one of 2017-18. The variation is due to the delay in the delivery of 12 protected mobility vehicles until 2016-17, to allow the supplier to manufacture and export 12 vehicles to the Netherlands.

Maritime Systems

Amphibious Ships (LHD) Project JP 2048 Phase 4A/B

3,092 2,720 146 100 -45

The test and trials program on NUSHIP Adelaide (LHD No 2) was successfully conducted during June-August 2015. The delivery of NUSHIP Adelaide was accepted from the contractor in October 2015. NUSHIP Adelaide is scheduled by the Navy to be Commissioned as HMAS Adelaide on 4 December 2015. The variation is due to savings realised from the operating test and evaluation (OT&E) program for HMAS Canberra being applied to NUSHIP Adelaide. Additionally, the revision of forecasted supply support milestones and the renegotiation of the Final Acceptance framework resulted in the reduced estimate.

Anzac Anti-ship Missile Defence Upgrade SEA 1448 Phase 2B

679 549 59 55 -4

HMAS Warramunga achieved materiel release in October 2015. HMAS Ballarat has undocked and is on schedule to commence sea trials in early 2016. HMAS Parramatta and HMAS Toowoomba continue in Anti-ship Missile Defence (ASMD) production. HMAS Stuart is undergoing pre-ASMD preparations. The variation is due to the application of the outcomes of the Lessons Learnt Program, in conjunction with the proactive management of the ASMD production and refit schedule.


99


Project Number/

Phase

Approved Project

Expenditure $m

Cumulative


2015 $m


$m


$m Variation


Future Submarines

Future Submarine - Acquisition SEA 1000 Phase 1A

298 121 87 78 -9

This project will deliver Australia's Future Submarine capability. During 2015-16, the project has continued to progress the Competitive Evaluation Process (CEP). The outcomes of this process will inform Government's selection of an international partner to work with Australia to develop and deliver a regionally superior Future Submarine fleet, which can be operated and sustained with sovereignty. The sound and defensible execution of the CEP remains a major focus for the project, along with preparations for the project phases following selection of an international partner. The variation reflects the refinement of activities to support execution of the CEP, and the reprogramming of science of technology plans along with contracted support into 2016-17.

Total – Top 30 Projects (Gross Plan) 60,174 22,876

5,873

4,882 -991

Other Approved Project Gross Plans 42,070 30,576

832 1,651 819

Total – Approved Projects (Gross Plan) 102,244 53,452

6,705 6,533 -172


100

APPENDIX D: CURRENT STATUS OF PREVIOUSLY REPORTED TOP 30 PROJECTS (PROJECTS REPORTED IN THE LAST FIVE

FINANCIAL YEARS)

Table 75 provides an update on the status of major projects reported in previous financial years. These projects were not ranked in the Top 30 projects by expenditure in 2015-16.

Table 75: Current Status of Previously Reported Top 30 Projects (Projects Reported in the Last Five Financial Years)

Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m

Cumulative Expenditure

to 30 June 2015

$m


$m


$m Variation

$m Status Report

Aerospace Systems

Bridging Air Combat Capability (BACC)

AIR 5349 Phase 1

2012-13 3,355 2,787 28 14 -14 Remaining expenditure for the project is planned for residual spares procurement via FMS cases, weapons integration and minor project activity. Planning has commenced to identify additional Super Hornet support requirements, associated with a revised planned withdrawal date. The variance reflects an earlier than anticipated FMS case payment made in December 2014, which has resulted in the reduced payment for 2015-16.

Hornet Upgrade Project

AIR 5376 Phase 2

2011-12 1,882 1,655 8 6 -2 Conditional acceptance of RAAF Base Williamtown, New South Wales simulators occurred in July 2015 and RAA F Base Tindal, Northern Territory is scheduled for early 2016. Payment of system acceptance contract milestone forecasted to slip into 2016-17.

Airbourne Surveillance for Land Operations

JP 129 Phase 2

2012-13 97 77 1 0 -1 Capability delivery is complete with the exception of the One System Remote Video Terminals (OSRUT) to be delivered in the second half of 2016. Project closure activities have commenced. The variation is due to the delay in expenditure on OSRUT to 2016-17.

Airborne Early Warning and Control System

AIR 5077 Phase 3

2014-15 3,915 3,563 24 27 3 The project achieved FOC in May 2015 and has commenced closure of residual tasks prior to transfer to sustainment and project closure. The variation is due to rephasing of replacement datalink and radar and electronic support measures milestones.


101

Table 75 (Continued): Current Status of Previously Reported Top 30 Projects (Projects Reported in the Last Five Financial Years)

Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation

$m Status Report

C-17 Globemaster III Heavy Airlifter

AIR 8000 Phase 3

2014-15 1,518 1,420 9 3 -6 Residual project tasks will continue to be transitioned to in-service management towards the end of 2015-16 when planned activities are completed. Variation is primarily attributed to the transfer of funding to support the C-17 maintenance facilities for RAAF Base Amberley, Queensland.

Electronic Systems

Battlespace Communications Systems Land

JP 2072 Phase 2A

2014-15 464 300 35 27 -8 The rollout of digital radios and ancillary equipment has been completed with the exception of some specialised ancillary equipment, such as base station and antenna variants. The selection of the remaining ancillary items is undergoing the design acceptance process for inclusion into the dismounted voice communications configurations. A performance based support contract for the combat net radios has been established with the original equipment manufacturer. The tactical data radio performance based support contract is being negotiated, and interim support arrangements are in place to provide support until the long term contract is in place. Clarifications of requirements and lessons learnt in initial deployments have resulted in reduced quantities and early delivery of ancillaries and spares equipment to support combat net radio equipment.

LND75Ph 3.4 Battle Management System

LAND 75 Phase 3.4

2014-15 316 227 28 30 2 The project achieved Final Acceptance of the acquisition contract on schedule in October 2015, delivering within its approved financial provision. Variation is due to exchange rate.

Battlespace Communications System (Land)

JP 2072 Phase 1

2011-12 260 226 13 12 -1 The required tactical data and voice communications radios have been delivered, although the Radio Remoting Solution for the M113AS4 Armoured Personnel Carriers and the delivery of a Battlespace Communications Systems coherent architecture remain outstanding. Activities to achieve project closure have commenced, and are expected to be completed by June 2016. Requirements for Battlespace Communications Systems (LAND) Integration and Test Facility are yet to be finalised and reprogrammed.


102


Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation

$m Status Report

Indian Ocean Ultra High Frequency Satellite Communication

JP 2008 Phase 5A

2012-13 421 338 11 3 -8 This project has delivered an upgraded Ultra High Frequency Satellite capability. The associated network management system has experienced significant delays associated with software development. A mitigation plan has been developed and is being progressed through a contract change. Due to the delays with the software development, milestone payments have moved to subsequent financial years.

Tactical Information Exchange Domain

JP 2089 Phase 2A

2010-11 104 86 9 10 1 The Anzac Class frigate multi link upgrade program is progressing well with four ships delivered and installation on the fifth ship well advanced. Phases 1 and 2 of the Combat System Simulator upgrade at the Combat Systems Tactical Trainer at HMAS Watson, Sydney have been completed. Facilities work, Initial Common Support Infrastructure installation and set to work at RAAF Base Tindal, Northern Territory and RAAF Base Darwin have been completed. Variation is due to the foreign exchange rate.

Next Generation Satellite Communications System

JP 2008 Phase 4

2013-14 869 569 .. .. .. FOC has been declared while work to upgrade the US supplied satellite control equipment is expected to be completed by February 2016.

Dismounted Battle Group and Below C3 System

LAND 125 Phase 3A

2011-12 107 92 .. .. .. This project is complete. Closure will be synchronised with the Land 75 Phase 3.4 project closure.

Military Satellite Capability - Wideband Terrestrial Terminals (WTT)

JP 2008 Phase 3H

2013-14 45 39 .. .. .. All terminals have now been issued to units; introduction into service training is complete; and the support contract has begun. The project continues to pursue technical certification which is expected to be achieved in December 2015, which will constitute FMR.

Battlespace Communications System (LAND)

JP 2072 Phase 3

2014-15 179 144 5 4 -1 The first work package in this project is supporting the digitisation and enhancement the Command, Control and Communications systems for land tactical forces. The project has received the final deliveries of Tactical Data and Voice radios for installation by project LAND 75, Battlefield Management System. Further work packages are undergoing tender evaluation as planned. Final delivery of voice and data radio equipment was achieved in 2014-15 earlier than planned.


103


Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation

$m Status Report

High Frequency Modernisation

JP 2043 Phase 3A

2014-15 580 469 20 17 -3 Life-of-Type obsolescence remediation work is progressing throughout the year as scheduled. The variation was due to the early achievement of several milestones since PBS for both the 10kw replacement task, $2.330m and Nullarbor $0.561m.

Joint Command Support Environment

JP 2030 Phase 8

2014-15 257 191 14 15 1 FMR of the Joint Command Support Environment was achieved in November 2015. Full acceptance Into service for operation on the Defence Secret network is in progress and expected to be completed in 2015-16. Revised payment schedule for milestones to match the delay in delivery of components.

NULKA PH5A Replenish Nulka Warstock

SEA 1397 Phase 5A

2014-15 88 62 18 17 -2 This project has been replenishing the Navy's Nulka off-board anti-ship missile decoy inventory. Decoy subassembly production closure has commenced. The final decoy round assembly and delivery will continue until March 2017 to support a smooth transition to sustainment. A Joint meeting with the US Navy has been held with a transition plan being agreed and in the process of being implemented. Minor rephasing of the budget to support tapered transition from production to sustainment.

Helicopter, Tactical Unmanned Aerial Systems and Guided Weapons

Rotary Wing for Land Force

AIR 87 Phase 2

2012-13 2,033 1,866 2 1 -1 The project closure is underway and is planned to be completed in early 2016. The variation is due to slippage in the delivery of the Deployable Aircraft Maintenance Rig.

Standard Missile-2 Conversion and Upgrade

SEA 4000

Phase 3.2

2013-14 112 62 4 4 0 This project is converting the Standard Missile 2 Block IIIA missiles, currently employed with Adelaide Class frigates, to a vertical launch configuration suitable for employment with Hobart Class destroyers, and is upgrading a proportion of the inventory to the more capable Block IIIB configuration. Missile conversions and upgrades will commence in the final quarter of 2015-16.

Lightweight Torpedo Replacement

JP 2070 Phase 2

2013-14 342 311 8 8 -1 This project has introduced the MU90 lightweight torpedo into service with the Anzac and Adelaide Class frigates. The Navy has achieved FOC and the project will be closed in 2016-17 at the end of the initial MU90 in-service support contract.

New ADF Anti-Submarine Lightweight Torpedo

JP 2070 Phase 3

2011-12 303 276 .. .. .. All project scope has been delivered and the project will be closed in 2015-16.


104


Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation

$m Status Report

Follow-on Stand Off Weapon Capability

AIR 5418 Phase 1

2011-12 319 284 9 0 -9 This project is introducing into service the AGM-158A Joint Air-to-Surface Stand-off Missile integrated with the Classic Hornet. The Air Force has achieved FOC and all approved project scope has been delivered. The project is scheduled to be closed in 2015-16. Variance is due to cost savings for technical support against the AGM-158A Joint Air-to-Surface Stand-off Missile.

Bridging Air Combat Capability - Super Hornet Weapons

AIR 5349 Phase 2

2014-15 304 178 15 36 21 This project is introducing into service air-to-air and air-to-ground precision guided weapons and countermeasures integrated with the Super Hornet. Service Release of the AGM-154 C1 Joint Stand-Off Weapon and AIM-120 Advanced Medium Range Air-to-Air Missile remains delayed and is now scheduled for late 2017. All other approved project scope has been delivered and is operational. The variance is mainly due to an accelerated production of AIM-120 Advanced Medium Range Air-to-Air Missiles.

Land Systems

Mulwala Redevelopment Project

JP 2086 Phase 1

2013-14 371 360 5 6 0 The five major defects identified at final acceptance that are required to be remediated to enable the project to close are scheduled for completion in March 2016.

Digital Terminal Control System (DTCS)

LAND 17 Phase 1B

2013-14 121 93 .. .. .. The project has taken delivery of the final control terminal software and the support systems. The project is scheduled to close in quarter three of 2015-16.

Replacement Artillery

LAND 17 Phase 1A

2013-14 158 158 22 0 -22 The project closed in 2014-15, with the course correcting fuze element being transferred to LAND 17 Phase 1C.1. The variation is due to the course correcting fuze element being transferred to LAND 17 Phase 1C.1.

Counter - Rocket, Artillery and Mortar (C-RAM) Project

LAND 19 Phase 7A

2012-13 265 182 5 5 0 The government approved the introduction into service and ongoing sustainment of the acquired counter-rocket, artillery and mortar systems. An in-service support contract has been signed with Saab Australia and a FMS support case is being finalised with the US for the remaining elements.


105


Project number/

phase

Last Financial

Year Reported in

Top 30

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation

$m Status Report

Australian Protected Route Clearance Capability

JP 154 Phase 3A

2012-13 73 36 .. .. .. The system has been introduced into service and the integration of the mine roller to the in-service Bushmaster has been design accepted. The project will be closed in 2015-16.

M-113 Upgrade LAND 106

2012-13 791 791 0 0 0 This project closed in 2014-15.

Direct Fire Support Weapons

LAND 40 Phase 2

2010-11 166 40 16 7 -9 The acquisition and support contracts for the Light Weight Automatic Grenade Launcher were signed on 30 June 2015, with NIOA Pty Ltd. The first weapon systems will be delivered from August 2016. The variation is due to the refinement of training simulation costs.

Maritime Systems

FFG Upgrade SEA 1390 Phase 2.1

2010-11 1,454 1,374 2 1 0 The third and final Panorama System installation on HMAS Newcastle was achieved in the third quarter of 2015. The variation is due to the reduction in planned FMS expenditure following case reconciliations.

SM-1 Replacement Project

SEA 1390 Phase 4B

2013-14 417 344 16 11 -5 Initial Support activities, principally associated with system software are underway for the Ship SM-2 Weapon System. The variation is due to support services no longer being required to be exercised to the level originally projected.

Amphibious Watercraft Replacement -

JP 2048 Phase 3

2014-15 237 150 35 27 -8 The second batch of LHD Landing Craft was delivered to the Navy in August 2015. The third and final batch of four craft arrived in Australia in November 2015, and the delivery to the Navy of the final craft remains scheduled during 2015-16. The variation is due to the rescheduling of the testing of Craft 9 and 10 forward into 2014-15 and the subsequent estimate reduction for 2015-16.

Anzac Anti-ship Missile Defence

SEA 1448 Phase 2A

2014-15 387 333 25 23 -2 HMAS Warramunga achieved Materiel Release in October 2015. HMAS Ballarat has undocked and is on schedule to commence sea trials in early 2016. HMAS Parramatta and HMAS Toowoomba continue in Anti-ship Missile Defence (ASMD) production. HMAS Stuart is undergoing pre-ASMD preparations. The variation is due to the application of the outcomes of the Lessons Learnt Program, in conjunction with the proactive management of the ASMD production and refit schedule.


106

APPENDIX E: TOP 10 MINOR CAPITAL INVESTMENT PROJECTS BY 2015-16 FORECAST EXPENDITURE

Table 76: Top 10 Approved Minor Projects by 2015-16 Forecast Expenditure

Project Number/

Phase

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation


Navy

Digital Voice Recording System (DVRS) Capability NMP1822 16 12 2 2 0 Installations have been completed on two Anzac Class frigates with a further three installations to be completed during 2015-16.

Typhoon Training System for DDG & LHD at West Head Gunnery Range (WHGR)

NMP1928 3 .. 1 1 0 Typhoon Training System acceptance testing activity has progressed as planned. Deliveries of spare parts and special tools remain on schedule for 2015-16.

Army

Protected Weapon System AMP002.16 6 - 5 5 0

The delivery of upgraded Protected Weapon Stations (PWS) has commenced as well as the design, environmental and capability evaluation. The project is on schedule to deliver all PWS by June 2016.

Hardened and Networked Army (HNA)/Enhanced Land Force (ELF) Weapons Training Simulation System (WTSS) Fitout

AMP029.44 36 25 5 5 0

The project has completed all deliveries of the new and enhanced simulation capability for the 12.7mm Heavy Machine Gun, 9mm pistol, 81mm Mortar and Carl Gustav 84mm Medium Direct Fire Support Weapon. The project is on schedule for closure by quarter three of 2015-16.

Kiowa Pilot Seating AMP015.58 7 5 1 1 0 Modification of all 23 aircraft is complete and FMR was achieved on 13 November 2015.

Air Force

Deployable Catering Capability AFM00972 15 .. 10 5 -4

In 2015-16, the Prime Contractor delivered a range of technical documents associated with the introduction into service of the catering systems. The delivery of the first trial system in quarter one of 2016 remains on schedule. The variation reflects the price and the delivery negotiated at contract signature.


107

Table 76 (Continued): Top 10 Approved Minor Projects by 2015-16 Forecast Expenditure

Project Number/

Phase

Approved Project

Expenditure $m


to 30 June 2015

$m


$m


$m Variation


School of Air Warfare (SAW) Training Environment Remediation

AFM01029 5 2 3 3 0 The project has now delivered 90 per cent of its software designs and all hardware for the part task trainer.

Multi-Band Multi-Mode Radio Capability AFM00975 5 2 3 3 0

The project in on track to procure and accept 31 Single Radio Integrated Base-station Systems by the second quarter of 2016 and will have completed delivery of those Base-station Systems with associated training to the Air Force units by the fourth quarter of 2016.

Distributed Ground Station – Australia (Interim) AFM01025 8 1 3 3 0

The Prime Contractor is completing the preliminary design phase with the detailed design phase. Commence build, integration and implementation phases remaining on schedule to be completed in 2015-16.

Deployable Tactical Air Navigation System (TACAN)

AFM01006 6 - .. .. .. Tender and source evaluation is complete. The preferred and non-preferred tenderers have been notified of the outcome. Contract signature is expected by early 2016.

Total - Top 10 Minor Projects 107 47 32 29 -4

Other Approved Project Gross Plans 68 52 1 7 6

Total - Approved Projects (Gross Plan) 175 99 33 36 3


108

APPENDIX F: TOP 30 SUSTAINMENT PRODUCTS BY 2015-16 FORECAST EXPENDITURE

Table 77: Top 30 Sustainment Products by End of Financial Year Outcome 2015-16


$m


$m Variation


Aerospace Systems

F/A-18 A/B Classic Hornet Weapon System 243 248 5

During 2015-16, the focus has been on simultaneously sustaining a mature flying rate of effort and a demanding deployment tempo supporting Operation OKRA, as well as continuing to partner with the Air Force and industry to finalise the plans and contracts that will sustain the capability to retirement in 2021-22. An extension to the Classic Hornet Spares and Repairs Support Contract will now be completed in early 2016. The variation is due to foreign exchange updates.

E-7A Airborne Early Warning and Control Capability System 214 218 4

The Wedgetail In-Service Support Contract achieved its first rolling wave extension following strong performance in 2014-15, including agreement to reduce the deeper maintenance floor loading to provide greater levels of aircraft availability to the Air Force. The variance is due to foreign exchange updates.

F/A-18F Super Hornet Weapon System 180 184 4

During the second half of 2015-16, efforts are continuing to focus on the enhancing the existing support arrangements in response to the extension of the planned withdrawal date; the expansion of the fleet to include 12 new Growler aircraft; establishment of enduring FMS and commercial contract arrangements. The implementation of deeper maintenance and capability upgrades are progressing in accordance with the fleet plan, including the successful commencement of the first increment of the spiral upgrade program. Variation is due to increased FMS case estimates for amended software costs and early delivery of upgraded training devices.

C130J-30 Weapon System 125 129 3

C-130J improvements have progressed with the fleet installation of the carbon brake upgrade nearing completion and new satellite communication system progressing as planned. Additionally, the loadmaster crashworthy seats are expected to be delivered to support fleet installation from early 2016 and the first trial aircraft installation of the Link-16 communication suite has commenced. The tender process for the procurement of a new loadmaster and maintainer training device is well advanced pending the outcome of final negotiations. A number of capability enhancements have been initiated and the fleet has maintained a higher than planned flying rate.


109

Table 77 (Continued): Top 30 Sustainment Products by End of Financial Year Outcome 2015-16

Budget

Estimate 2015-16

$m


$m Variation


AP-3C (EW) - CAF04 120 121 1

The AP-3C fleet has successfully been maintained under the more resource intensive 'safety-by-inspection' program comprising of targeted airframe structural inspections and repairs. The variation is due to minor increases to support contracts, offset by reduced inventory and procurement support costs.

Lead-In Fighter Hawk Weapon System 89 91 2

BAE Systems (BAE/S) Australia continues to meet all contractual obligations. The first award term review has been completed and pricing requested for the 2018-2020 award term. The fleet repaint program concluded on 30 November 2015. A contract was placed with BAE/S for the procurement of new multi-function displays (MFDs). The new MFDs are more compat ble with the AIR 5438 Phase 1A software upgrade to the Hawk 127 aircraft and will overcome an MFD obsolescence issue and an operational airworthiness risk by providing improved display qualities for aircrew. The scope of the current in-service support contract to include operational maintenance (OM) was signed on 22 June 2015. A three-tier phase-in period commenced on 1 October 2015 to assure nil reduction in capability come the operative date of 1 July 2016. Variation relates to expected budget increases for OM transition and MFD procurement.

C-17 Heavy Air Lift Weapons System 79 82 3

Continued focus is on the introduction into service of two recently delivered C-17A aircraft, increasing the fleet from six to eight, and support to operations. A range of primary role equipment capability upgrades to the C-17A fleet are being rapidly undertaken. Proposals to reform sustainment, training and maintenance support are also being developed. The reforms are intended to result in a better balanced and effective sustainment organisation, exploiting the synergies of a larger Australian fleet. The variation is attr buted to an increase in flying effort to support Operations.

KC-30A Weapon System 67 68 1

The sustainment organisation has worked collaboratively with industry to implement a Contract Reform Program; support the receiver clearances program for conducting air to air refuelling; and completed the transition from project phase to sustainment. This has been achieved while significantly exceeding planned rates of effort. Slight increases in the supply spares due to increased holdings required for flex bility in aircraft tasking.


110


Budget

Estimate 2015-16

$m


$m Variation


PC-9/A Weapon System 51 51 1

The PC-9/A fleet continues to be maintained under an intensive regime of structure and component inspections to assure its continuing airworthiness. Contractor maintenance support was extended to December 2019. The variation is due to foreign exchange updates.

Special Purpose Aircraft 50 51 1

The special purpose aircraft fleet continue to maintain a very high level of performance and serviceability during 2015-16. Defence has exercised extension options for the aircraft lease arrangements and has commenced formal market solicitation to replace the fleet by June 2019. This minor variation is the result of foreign exchange adjustments.

Electronic Systems

Wide Area Surveillance and Air Force Minor Projects 101 102 1

During 2015-16, sustainment has progressed according to plan with additional action being taken to remediate several obsolescence issues. The trial installation of solar power at a remote radar site has been deferred pending the outcomes of a CSIRO study. Additional funding sought to remediate a number of obsolescence issues, for example hardware problems within the Radar 3 Frequency Management System.

Battlespace Communications Systems 55 45 -10

Battlespace Communications Systems has continued to meet all sustainment key performance indicators in support of the current generation of battlespace communications equipment. Concurrently Battlespace Communications is working with Joint Project 2072 in delivering the next generation of equipment via a series of project phases. Reduction is due to a combination of greater than expected reduction in the usage of legacy communications fleets; delays in establishing support contracts for new equipment delivered by JP 2072; and various cost saving initiatives.

Command and Intelligence Systems Software Applications 54 57 3

The primary focus has been to complete the designs and progress to production for the next generation of deployable networks for the Army, the Navy and the Air Force. The period has also seen significant effort in maintaining the health of extant systems that are rapidly approaching life of type. The variation represents additional funding for work in support of the Defence Mission Network, which provides access to Defence ICT resources for deployed personnel.


111


Budget

Estimate 2015-16

$m


$m Variation


ADF Tactical Electronic Warfare (EW) Fleet 51 31 -20

The first airborne platform is now in mission system technical refresh with the activity remaining on track to meet the May 2016 completion date. The technical refresh of the maritime mission systems continues on schedule. The airborne components have now been transferred to the Airborne Self Protection Capability product, with the maritime component currently in the process of transfer to the Maritime Electronic Warfare and Radar Systems product. The variation is due to the sustainment funds for the airborne tactical electronic warfare products being transferred to the Airborne Self Protection Capability product as described above.

Helicopters, Tactical Unmanned Aerial Systems and Guided Weapons

Navy, Army and RAAF Guided Weapons 201 115 -86

All operational and raise, train and sustain demands for guided weapons are being satisfied. Work is progressing to: upgrade and introduce into service new weapons and weapon variants; refurbish guided weapons maintenance facilities; upgrade and replace maintenance test sets; outsource selected guided weapons sustainment activities; re-certify and extend the life of explosive ordnance natures as required; and dispose of obsolete guided weapons and components. The variation is due to reprogramming of expenditure for new facilities works for the Navy missile maintenance and in-year savings arising from deferral of missile procurements due to extension of their service life.

Multi Role Helicopter Weapon System 161 197 36

As a result of emergent aircraft configuration control issues, which have now been remediated, production aircraft deliveries slowed during this reporting period. It is planned that 37 of the total 47 aircraft will be delivered by the end of 2015-16. The reduced aircraft fleet size will not diminish planned flying hours. The integrated sustainment team of Commonwealth and Airbus Group Australia Pacific personnel remain focussed upon supporting recent successful aircraft introduction to operational service activities on land and at sea Supplementation provided to meet engineering and logistics support to planned flying hours.


112


Budget

Estimate 2015-16

$m


$m Variation


Armed Reconnaissance Helicopter System 119 135 16

Airbus Group Australia Pacific performance against key Tiger sustainment contract performance indicators, such as availability and demand satisfaction rates is trending upwards as a result of the sustainment contract changes introduced. As a result, flying rate of effort achievement for the fleet is improving year on year. Supplementation provided to cover contractual requirements including the cost of the cockpit procedural trainer upgrade.

MH-60R Seahawk Romeo Weapon System 97 94 -3

Production and delivery of aircraft remains on schedule with a total of 22 aircraft to be delivered to the Navy by June 2016. Following achievement of the IOC in September 2015, the Romeo capability is on schedule to grow to four embarked flights by June 2016. Construction of the Maritime Helicopter Support Company warehousing facility at Nowra, New South Wales is complete and the warehouse has commenced operation. Construction of the commercial maintenance facility is behind schedule but is expected to be completed on time to support commencement of the Romeo aircraft deeper maintenance program from mid-2016. The variation results from improved FMS budget information from the US Government for support of this new capability.

S-70B-2 Seahawk Weapon System 52 51 -1

The ‘Classic’ Seahawk has continued to perform well across 2015-16. The transition out of service continues as scheduled with seven Seahawks currently withdrawn from flying operations. Reduced requirement as a result of a progressive reduction in aircraft numbers and rate of effort, combined with planned cessation of major support contracts.

Land Systems

Navy Munitions, Army Munitions, Explosive Ordnance 304 306 2

The munitions inventory continues to meet ADF safety and availability requirements. A Munitions Supply Improvement Program has been established to consolidate munitions supply arrangements. Inventory management reform continues to progress with the implementation of improved metrics, better munitions life management practices and improved inventory planning. Successful Transition Out (Safe and Continuous Operations) of the Strategic Agreement for Munitions Supply and Mulwala Agreements has occurred. Munitions production commenced under the Strategic Munitions Interim Contract (SMIC) for both Benalla and Mulwala facilities in Victoria. Integration of the JP2086 modernised propellant manufacturing facility into the SMIC has commenced. The variance is the result of minor changes to delivery schedules and foreign exchange adjustments.


113


Budget

Estimate 2015-16

$m


$m Variation


ADF Clothing 79 59 -20

The key achievements have included: • completed the initial introduction into service (IOS) of the the Air Force General Purpose

Jacket and General Purpose Uniform garments in accordance with rollout plan. • delivery of the Australian Multicam Combat Uniforms and the new General Purpose

Jackets to Army in accordance with IOS plan. • issued the new Army Parade Boots to all members of the Army and enabling Army

personnel to purchase replacement boots online from mid-2015. • completed the enhancements to the new Navy and Air Force parade shoe design in order

to improve comfort. • finalised the development of a modernised Army Service Dress Uniform for introduction in

the first quarter of 2016. • continued ongoing procurement to meet the ADF’s clothing and footwear requirements for

operations as well as for raise, train and sustain activities. • completed the issuing of Task Group Taji, Operation OKRA, with the new Australian

Multicam Camouflage Uniform ahead of schedule. The variation reflects the revised clothing requirements negotiated with the Army including the introduction of new and enhanced items.

Commercial Vehicle Fleet 68 82 14

The fleet programme continues to liaise with groups and services to ensure the commercial fleet is maintained at the required size, costs are minimised and disposal revenue is optimised. The fleet is working with Australian staff based in Malaysia on a replacement program for the ageing commercial vehicle fleet at Royal Malaysian Air Force - Butterworth. This programme will commence in 2015-16, with completion in 2016-17. The variation is to fund a continual and balanced replacement program from 2015-16 onwards.

General Service B Vehicle Fleet 61 64 3

The fleet continues to manage the phase out of the Land Rover fleet in line with the introduction of the G-Wagon and ensure the broader B-vehicle fleet continues to meet Capability Manager requirements until replaced. Significant effort remains focussed on the establishment of pools and aligning vehicle requirements to the Army’s development of three like Brigades in Darwin, Brisbane, and Townsville, Queensland. The variation is due to costs associated with the establishment of an enhanced equipment pool in South Australia; increased pool availability and remediation; and cross levelling of vehicles in support of Plan BEERSHEBA.


114


Budget

Estimate 2015-16

$m


$m Variation


Health Capability 53 54 1

The request for tender (RFT) for pharmaceuticals and medical and dental consumables will be released by June 2016. The RFT for a prime vendor to conduct the acquisition and through life support of Medical and Dental Equipment is also planned to release by June 2016. The variation is the result of a transfer for through life support costs from closing project JP 2060 Phase 2B.

Maritime Systems

Anzac Class Frigate (FFH) 343 379 36

The planned intermediate maintenance of HMAS Anzac was achieved. HMAS Ballarat post-Anti-ship Missile Defence (ASMD) activities continue with sea trials to commence in early 2016. HMA Ships Parramatta and Toowoomba continue in ASMD production as scheduled and planning for HMAS Stuart ASMD is progressing. The variation is due to the support of increased requirements for preservation and hull defect rectification; additional inventory, and engineering change and supportability rectification.

Adelaide Class Frigate 138 148 10

All scheduled maintenance of HMA Ships Darwin, Newcastle and Melbourne was achieved either on time or earlier – an example of the improved support and delivery post forming the FFG Enterprise. Preparations for the disposal of HMAS Sydney are underway. Variation is associated with increased funding for inventory.

Canberra Class Landing Helicopter Dock 92 90 -1

The first Landing Helicopter Dock (LHD), HMAS Canberra and the first four landing craft have performed strongly in programmed amphibious exercises, Sea Series, during the first half of 2015-16. Sustainment of the second LHD, HMAS Adelaide, and the delivery of the remaining eight landing craft and the LHD Through Life Support Facility will commence in the second half of 2015-16. The variation is due to funding program revisions to meet increased inventory procurement and decreased materiel and in-service support.

Auxiliary Oiler Replenishment (AOR) HMAS Success 75 83 8

HMAS Success commenced a refit and is on track to complete production work in first quarter of 2016. This is the second of the three major refits to remediate HMAS Success’ materiel condition that commenced in 2012. The variation is due to additional funding provided during the current refit to procure inventory for both planned and corrective maintenance and to complete configuration changes to improve habitability.


115


Budget

Estimate 2015-16

$m


$m Variation


Huon Class Mine Hunter Coastal 53 61 9

The Combat System upgrade completed successfully and the development of detailed design and integration schedule for the watermist fire fighting system is progressing. Scheduled maintenance, including the major interval overhaul of Mine Hunter Coastal main engines, continues on schedule. Additional focus is on sustainment obsolescence aspects leading up to the Service Life Extension project. Variation is due to increased requirements for the Minor War Vessels Logistics Continuous Improvement Program; workforce augmentation and additional sparing for the Sonar and Tactical Data Systems.

Collins Submarine Management Program

Collins Class Submarines 521 523 2

Total - Top 30 Products 3,893 3,922 29

Other Approved Sustainment Product Estimates 1,289 1,429 140

Total Sustainment Product Funds Available 5,182 5,351 169

Support to Operations 357 257 -100

Total Sustainment and Operations Funding 5,539 5,608 69


116

APPENDIX G: CAPITAL FACILITIES PROGRAMME

Information is as reported in the PBS 2015-16.

Approved Capital Facilities Projects

Table 78: Approved Capital Facilities Projects by State and Federal Electorate

State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m

Project Performance Update and Explanation of financial variation

Facilities in support of the New Air Combat Capability[1]

RAAF Williamtown NSW - Newcastle - 51.1 238.4 213.4 -25.0 The financial variation is a result of change in the delivery forecast and in-ground latent conditions.

RAAF Tindal NT - Lingiari - 1.6 6.6 6.6 0.0

Total 1,477.0 52.7 245.0 220.0 -25.0

Enhanced Land Force Stage 2 Works [1]

Lone Pine Barracks NSW - Hunter - 117.1 - 1.2 1.2 The financial variation is a result of contract completion.

Puckapunyal Training Area VIC - McEwan - 0.1 8.2 1.8 -6.4

The financial variation is a result of design alteration to meet capability requirements.

Simpson Barracks, Watsonia VIC - Jagajaga - 20.2 - - 0.0

RAAF Amberley QLD - Blair - 9.6 - - 0.0

Lavarack Barracks, Townsville QLD - Herbert - 66.5 - - 0.0

Townsville Training Area QLD - Kennedy - 3.9 - - 0.0

Greenbank Training Area QLD - Rankin - 120.4 0.0 0.4 0.4 The financial variation is a result of contract completion.

Gallipoli Barracks, Enoggera QLD - Ryan - 805.5 6.9 2.5 -4.4

The financial variation is a result of savings realised in the delivery of the works.

Wide Bay Training Area QLD - Wide Bay - 78.9 10.2 12.6 2.4 The financial variation is a result of completion in July 2016.


117

Table 78 (Continued): Approved Capital Facilities Projects by State and Federal Electorate

State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


Kokoda Barracks, Canungra QLD - Wright - 68.5 - - 0.0

Cultana Training Area SA - Grey - 0.9 33.9 3.0 -30.9

The financial variation is a result of the delay in design to meet sponsor requirements.

RAAF Edinburgh SA - Wakefield - 34.6 - - 0.0

Majura Field Training Area ACT - Fraser - 22.4 - - 0.0

Total 1,457.8 1,348.5 59.2 21.5 -37.7 Defence Logistics Transformation Program [1]

Defence National Storage & Distribution Centre, Moorebank NSW - Hughes -

205.0 0.6 1.0 0.4 The financial variation is a result of additional work required to meet capability requirements.

Wadsworth Barracks, Bandiana VIC - Indi - 63.1 0.4 0.4 0.0

RAAF Amberley QLD - Blair - 140.3 0.1 4.7 4.6

The financial variation is a result of additional work required to meet capability requirements.

Lavarack Barracks, Townsville QLD - Herbert - 102.3 23.9 29.7 5.8

The financial variation is a result of the opportunity to deliver construction works earlier than planned.

RAAF Edinburgh SA - Wakefield - 20.8 1.5 1.0 -0.5 The financial variation is a result of contract completion.

HMAS Stirling, Rockingham WA - Brand - 0.6 - - 0.0

Palmer Barracks WA - Hasluck 9.4 - - 0.0

Robertson Barracks NT - Solomon - 125.4 0.1 3.0 2.9

The financial variation is a result of additional work required to meet capability requirements.

Total 752.7 666.9 26.6 39.8 13.3 AIR 7000 Phase 2B: Maritime Patrol Aircraft

RAAF Edinburgh SA - Wakefield 707.9 - 60.5 31.0 -29.5 The financial variation is a result of change in the delivery strategy.


118


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


AIR 8000 Phase 2: Battlefield Airlifter Facilities

RAAF Base Amberley QLD - Blair 370.4 - - 5.7 5.7

Project has been approved since the Portfolio Budget Statements 2015-16.

HMAS Stirling Redevelopment Stage 3A

HMAS Stirling, Rockingham WA - Brand 366.8 - - 6.0 6.0


Moorebank Units Relocation [2]

Steele Barracks, Moorebank NSW - Hughes 352.9 295.0 16.1 22.1 6.0

The financial variation is a result of construction completion and finalisation of contract.

AIR 5349 Phase 3: Growler Airborne Electronic Enabling Capability Facilities



RAAF Base Williamtown: Redevelopment Stage 2

RAAF Williamtown NSW - Newcastle 274.0 - - 10.2 10.2


Campbell Barracks Redevelopment

Campbell Barracks, Swanbourne WA - Curtin 223.5 - - 20.0 20.0


Albatross Redevelopment Stage 3

HMAS A batross, Nowra NSW - Gilmore 192.0 67.2 66.3 74.1 7.8 The financial variation is a result of the opportunity to deliver construction works earlier than planned.

Facilities for MH-60R Seahawk Maritime Combat Helicopters [1]

HMAS A batross, Nowra NSW - Gilmore - 157.2 - - 0.0

HMAS Stirling, Rockingham WA - Brand - 1.6 4.9 4.9 0.0

Total 189.0 158.8 4.9 4.9 0.0


119


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


East Sale Redevelopment

RAAF East Sale VIC - Gippsland 185.6 149.7 27.2 21.5 -5.7

The financial variation is a result of delay in the Fuel Farm construction.

AIR 9000 Phase 7: Helicopter Aircrew Training System

HMAS A batross, Nowra NSW - Gilmore 157.1 - 81.0 67.2 -13.8

The financial variation is a result of the decrease in the Government approved budget.

JP2047: Defence Terrestrial Communications Network Facilities Upgrade [3]

National 131.1 18.3 68.9 25.0 -43.9

The financial variation result of proposed amendment to scope and schedule of the TC (Transformed Communication) network.

SEA 4000: Facilities for Air Warfare Destroyer

Garden Island NSW - Wentworth 109.9 84.4 24.0 16.6 -7.4


Defence Force School of Signals

Simpson Barracks, Watsonia VIC - Jagajaga 101.3 92.4 4.9 0.8 -4.1

The financial variation is a result of delay in design of the final scope element and funding approval.

Airfield Capital Works [1]

RAAF Townsville QLD - Herbert - - - - -

RAAF Curtin WA - Durack - - 23.0 10.0 -13.0 The financial variation is a result of lower than anticipated tender prices.

RAAF Tindal NT - Lingiari - - - 5.0 5.0 The financial variation is a result of change in the delivery schedule.

Total 95.3 - 23.0 15.0 -8.0


120


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


Delamere Air Weapons Range Redevelopment

Delamere Air Weapons Range NT - Lingiari 74.4 - - 0.5 0.5


17th Construction Squadron Relocation Infrastructure



JP 3029 Phase 2: Space Surveillance Telescope

Harold E Holt, Exmouth WA - Durack 63.0 3.2 51.2 5.0 -46.2

The financial variation is to ensure the updated user design requirements are met.

JP 2048: Facilities for Landing Helicopter Dock Ships

Garden Island NSW - Wentworth 60.3 45.8 12.6 10.5 2.1


JP2097: Phase 1B: REDFIN Infrastructure

Holsworthy Barracks, Holsworthy NSW - Hughes - - 13.4 13.4

Lavarack Barracks, Townsville QLD - Herbert - - - 0.0

Campbell Barracks, Swanbourne WA - Curtin - - 4.9 4.9

Defence Establishment Howard Springs NT - Solomon - - - 0.0

Total 50.5 - - 18.3 18.3 Project has been approved since the Portfolio Budget Statements 2015-16.

AIR 9000 Phases 5B and 5C: Facilities for Chinook Helicopter

RAAF Townsville QLD - Herbert 49.8 11.1 13.7 14.9 1.2

The financial variation is the result of remediation of unforseen in-ground latent conditions.


121


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


DSTO Fishermans Bend - Human Protection and Performance Division Security and Facilities Upgrade

Fishermans Bend VIC - Melbourne Ports 41.1 14.0 19.4 21.0 1.6

The financial variation is a result of additional costs to deliver Laboratories and Security.

JP 154 Phase 1 Stage 1: Facilities for Joint Counter Improvised Explosive Device Capability - Nurrungar

Woomera SA - Grey 14.2 0.7 11.0 12.7 1.7 The financial variation is a result of additional work required to meet capability requirements.

Low Level Bridge Repair

Fleet Base West, Stirling WA - Brand

13.3 0.3 6.4 8.5 2.1 The financial variation is a result of worse than excepted material condition.

AIR 5438 Phase 1: Facilities for Lead in Fighter Capability Assurance Program [1]

RAAF Williamtown NSW - Newcastle - 1.3 4.5 4.5 0.0

RAAF Pearce WA - Pearce

- - 3.2 3.2 0.0

Total 12.9 1.3 7.7 7.7 0.0

Defence Centralised Processing Facilities

National 12.9 3.4 5.9 2.5 -3.4 The financial variation is a result of a change in procurement strategy.


122


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


LAND 998 Phase 1: Replacement Aviation Fire Truck [1]

RAAF Richmond NSW - Greenway - 0.3 1.1 1.2 0.1

RAAF Williamtown NSW - Newcastle - 0.3 1.1 1.2 0.1

RAAF Amberley QLD - Blair - 0.3 1.1 1.2 0.1

Lavarack Barracks, Townsville QLD - Herbert - 0.3 1.1 1.2 0.1

Gallipoli Barracks, Enoggera QLD - Ryan - 0.3 1.1 1.2 0.1

Robertson Barracks NT - Solomon - 0.3 1.1 1.2 0.1

RAAF Tindal NT - Lingiari - 0.3 1.1 1.3 0.2

Total 10.5 1.8 7.8 8.5 0.7

The financial variations across multiple sites are as a result of numerous minor changes to the delivery of the approved capability requirement.

Flood Mitigation .

RAAF Darwin NT - Solomon 9.9 1.0 4.9 6.5 1.6 The financial variation is a result of contract completion.

Joint Health Command Facilities Upgrade: Interim Works

Larrakeyah Barracks: Coonawarra NT - Solomon 9.5 4.8 - 4.8 4.8


Robertson Barracks NT - Solomon - - - - - Thermal Test Facility

Fishermans Bend VIC - Melbourne Ports 9.2 4.7 3.6 4.5 0.9

The financial variation is the result of remediation of unforseen in-ground conditions and additional construction work to fully meet the approved capability requirement.

JP2072 Phase 2B: Battlespace Communications Facilities

Simpson Barracks, Watsonia VIC - Jagajaga 7.2 - - 2.2 2.2



123


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


Refurbishment of R5 Basement

Russell Offices ACT - Fraser 6.6 1.4 2.1 2.7 0.6 The financial variation is a result of contract completion.

Army Emergency Response Facilities

Holsworthy Barracks, Holsworthy NSW - Hughes 5.9 0.2 5.3 5.7 0.4

The financial variation is the result of higher than anticipated construction costs.

Shoal Bay Receiving Station Facilities Upgrade

Shoal Bay Receiving Station Facilities NT - Solomon 5.9 - 5.0 2.5 -2.5 The financial variation is a result of design alteration to meet capability requirements.

Holsworthy Fuel Point

Holsworthy Barracks, Holsworthy NSW - Hughes 5.4 0.2 4.4 5.1 0.7

The financial variation is the result of higher than anticipated construction costs and in-ground latent conditions.

Potable Water Supply Upgrade

RAAF Pearce WA - Pearce 4.6 0.4 4.0 2.7 -1.3 The financial variation is a result of delay in the completion of the design.

LAND 400 Phase 2: Land Combat Vehicle System - Risk Mitigation Activity

Monegeetta Proving Grounds VIC - McEwan 5.2 - 4.5 5.1 0.6 The financial variation is the result of higher than anticipated construction costs.

Porton Barracks Redevelopment

Porton Barracks, Edmonton QLD - Edmonton 4.3 0.5 2.6 2.8 0.2 The financial variation is a result of contract completion.

Deployable Defence Air Traffic Management and Control Systems

RAAF Amberley QLD - Blair 4.2 0.0 3.5 2.4 -1.1 The financial variation is the result of investigations into the design of compliance works.


124


State and

Electorate

Total Estimated

Expenditure $m


to 30 June 2015

$m

2015-16 Budget

Estimate $m

2015-16 Revised

Estimate $m

Variation $m


Support Facilities Landing Helicopter Dock (LHD) Landing Crafts

HMAS Waterhen NSW - Wentworth 3.9 0.8 2.6 1.8 -0.8

The financial variation is the result of unresolved site selection with sponsor.

Projects in or about to enter Defects Liability Period

[4]

19.7 24.7 5.0

Total 6,252.7 3,024.8 905.4 834.9 -70.5

Notes

1. These projects cross state and electoral boundaries. Estimated cumulative expenditure to 30 June 2015 and expenditure estimates for 2015-16 are provided in the table per location.

2. This amount represents the Defence funded element of the Moorebank Units Relocation Project. The Department of Finance and Deregulation are funding the remaining element of $517.1m with a total approved project value of $870.0m.

3. This project is delivering facilities at over 200 locations that cross state and electoral boundaries.

4. This amount represents the expenditure estimates for contract administration of 22 completed projects during their first year in-use and construction completion of six medium works projects that are under the $2m reporting threshold to the Public Works Committee.


125

Information is as reported in the PBS 2015-16 with the following updates:

New South Wales

RAAF Base Williamtown Redevelopment Stage 2

This project will sustain and improve the functionality and capability of RAAF Base Williamtown, NSW, including upgrades or replacement of critical ageing infrastructure to meet future requirements. Construction is scheduled to commence in mid 2016 and be completed by mid 2021.

Queensland

17th Construction Squadron Relocation Project

This project will provide facilities to collocate 17th Construction Squadron with 6th Engineer Support Regiment and 21st Construction Squadron at RAAF Base Amberley, Qld. Construction commenced in late 2015 and is scheduled to be completed by late 2016.

Battlefield Airlifter Facilities (AIR 8000 Phase 2)

This project will provide facilities at RAAF Base Amberley, Qld to accommodate and support the operation of the new C-27J Battlefield Airlifter (BFA) aircraft. Construction is planned to commence in early 2016 and be completed by early 2019.

Growler Airborne Electronic Attack Capability Facilities - AIR 5349 Phase 3

This Project will provide the necessary working accommodation, maintenance, warehousing and training facilities at RAAF Base Amberley, Qld to support the introduction of the Growler Airborne Electronic Attack Capability. Construction is planned to commence in mid 2016 and be completed by 2021.

Northern Territory

Delamere Range Facilities Redevelopment

This project will redevelop key range facilities and infrastructure to enable Growler and Mobile Threat Training Emitter Systems capability at Delamere Air Weapons Range, NT. Construction is planned to commence in mid 2016 and be completed by mid 2018.

Victoria

Battlespace Communications System - Land JP 2072 Ph 2 B

The project will provide working, storage and technical facilities to support the introduction of JP2072 Phase 2B equipment. Construction is scheduled to commence mid 2016 and be completed in early 2017.

South Australia


Western Australia

Campbell Barracks Redevelopment

This project will provide a new Headquarters for the Special Air Services Regiment, communications facilities, working accommodation, storage facilities and supporting site infrastructure at Campbell Barracks, WA. Construction commenced in early 2016 and is scheduled to be completed by late 2018.


126

HMAS Stirling Redevelopment Stage 3A

This project will provide upgrades and refurbishment of existing critical shortfalls to infrastructure and facilities. Construction is planned to commence in mid 2017 and be completed by late 2019.

VARIOUS Locations

REDFIN (JP2097 Phase 1B)

This project will provide facilities for the Special Operations Vehicle (SOV) fleet to support mobility and Networked Special Operations Capability. Construction is planned to commence in early 2016 and be completed by early 2019.

Joint Health Facilities Interim Works

Tranche One of this project will provide an interim health centre for Australian Defence Force personnel at Larrakeyah Barracks, NT, and refurbishment of the existing health centre at Robertson Barracks, NT. Tranche Two will provide a mid-life upgrade to RAAF Townsville Health Centre, Qld. and relocation of dental services into the RAAF Pearce Health Centre, WA. Construction commenced for Tranche One in mid 2015 and is expected to be completed by mid 2016. Tranche Two construction is planned to commence in early 2017 and is scheduled to be completed in mid 2017.


127

APPENDIX H: STATUS OF MAJOR PROJECTS FORESHADOWED FOR GOVERNMENT

AND PARLIAMENTARY STANDING COMMITTEE ON PUBLIC WORKS CONSIDERATION

(PWC) IN 2015-16


Table 79: Programme of Works Foreshadowed for Consideration and Approval

State/Electorate

Actual/Indicative PWC Referral

Date

Actual/Indicative PWC Hearing

Date[1]

Current Status

Capital Facilities Projects Foreshadowed for PWC Consideration in 2015-16

Russell Buildings R5 and R6 Infrastructure Upgrade

ACT - Fraser Late 2016 Early 2017 In development

RAAF Base Williamtown Redevelopment Stage 2

NSW - Newcastle

17 June 2015 22 July 2015 Approved

Garden Island Critical Infrastructure Recovery

Project Stage 1

NSW -

Wentworth

Mid 2016 Late 2016 In development

17th Construction Squadron Relocation Infrastructure Project

QLD - Blair 25 March 2015 20 May 2015 Approved

AIR 8000 Phase 2 - Battlefield Airlifter Facilities

QLD - Blair 16 Sept 2015 3 Nov 2015 Approved

AIR 5349 Phase 3 - Growler Airborne Electronic Attack Capability Facilities

QLD - Blair 19 Aug 2015 4 Nov 2015 Approved

C-17 Maintenance Facility, Aircraft Apron and Associated Infrastructure

QLD - Blair Early 2016 Mid 2016 In development

Delamere Air Weapons Range Redevelopment

NT - Lingiari 17 Sept 2015 4 Nov 2015 Approved

Remediation of Defence Site Maribyrnong VIC - Maribyrnong

Mid 2016 Late 2016 In development

Puckapunyal High Voltage Project VIC - McEwen Early 2016 Mid 2016 In development

Campbell Barracks Redevelopment WA - Curtin 22 June 2015 6 Aug 2015 Approved

JP2097 REDFIN Phase 1B Multiple 17 June 2015 6 Aug 2015 Approved

HMAS Stirling Redevelopment Stage 3A WA - Brand 19 Aug 2015 8 Oct 2015 Approved

Joint Health Facilities Interim Works (Tranche

1 and 2)

Multiple Approved as

Medium Works

Aircraft Pavements and Airfield Lighting at RAAF Base Pearce, Gin Gin, RAAF Base East Sale and Army Aviation Centre Oakey.

[2]

Multiple Early 2018 Mid 2018 In development

Air Traffic Control Complex Infrastructure Project and AIR5431 Phases 2and 3, and Fixed Base Defence Air Traffic Management and Control System

Multiple 16 Sept 2015 27 Nov 2015 Approval pending


128

Table 79 (Continued): Programme of Works Foreshadowed for Consideration and Approval

State/Electorate

Actual/Indicative PWC Referral

Date

Actual/Indicative PWC Hearing

Date[1]

Current Status

LAND 121 Phase 3 & 4 Stage 2 Multiple 16 Sept 2015 27 Nov 2015 Approval pending

LAND 17 Phases 1B & 1C - Additional Towed Guns

Multiple Mid 2016 Mid 2016 In development

LAND 155 Enhanced Gap Crossing Capability Multiple Mid 2016 Mid 2016 In development

Navy Guided Weapons Maintenance Facilities Multiple Late 2016 Early 2017 In development

Medium Projects Foreshadowed to Seek Approval in 15/16

Proof & Experimental Establishment (P&EE) Vibration Test Facility - Port Wakefield

SA - Wakefield In development

Cultana Training Area Infrastructure and Facilities

SA - Grey In development

RAAF Base Amberley Base Infrastructure Works

QLD - Blair In development

RAAF Base Amberley Sewerage Treatment Plant

QLD - Blair In development

Bulimba Barracks Partial Disposal and Unit Relocation

QLD - Griffith In development

Joint Movement Control Office Working Accommodation - Lavarack Barracks

QLD - Herbert In development

Garden Island (East) Building 130 Refurbishment

NSW - Wentworth

In development

JP1770 Phase 1 Maritime Rapid Environment Assessment - HMAS Waterhen

NSW -

Wentworth

Approved

Upgrade of Multi Purpose Wharf, Two Fold Bay Eden,

NSW - Eden Monaro

In development

Robertson Barracks 25m Range

Refurbishment

NT - Solomon In development

JP 2072 Phase 2 Battlespace Communications Facilities Simpson Barracks, Watsonia

VIC - Jagajaga In development

Benalla Proof & Experimental Establishment (P&EE) Small Arms Ammunition Test Facility

VIC -Indi In development

LAND 136 Phase 1 Land Force Mortar Replacement

Multiple In development

JP2064 Phase 3 Geospatial Information

Infrastructure and Services Facilities Support

Multiple In development

Note

1. Hearing dates will be subject to the Committee's consideration and agreement.

2. Defence proposes to seek exemption from Public Works Committee scrutiny of this project on the grounds that the work is

declared repetitive in accordance with Section 18(8A) of the Public Works Act 1969

129

Russell Buildings R5 and R6 Infrastructure Upgrade

The projects will provide essential building and engineering services upgrade to extend the life of Russell Buildings R5 and R6. Subject to Government and Parliamentary approval, construction is scheduled to commence in mid 2017 and be completed by mid 2020.

Garden Island Critical Infrastructure Recovery Project Stage 1

The project will address critical wharf infrastructure and engineering services risks at Garden Island, NSW. Subject to Government and Parliamentary approval, construction is scheduled to commence in early 2017 and be completed by late 2018.

C-17 Maintenance Facility, Aircraft Apron and Associated Infrastructure

The project will provide a maintenance facility, additional working accommodation, aircraft apron and associated infrastructure to support C-17 operations at RAAF Base Amberley, Qld. Subject to Government and Parliamentary approval, construction is planned to commence in late 2016 and be completed by early 2019.

Remediation of Defence Site Maribyrnong

The project will undertake necessary remediation works at Defence site Maribyrnong, Vic. Subject to Government and Parliamentary approvals, construction is planned to commence in early 2017 and be completed by 2020.

Aircraft Pavements and Airfield Lighting at RAAF Base Pearce, Gin Gin, RAAF Base East Sale and Army Aviation Centre Oakey.

The project will resurface asphalt pavement and replace airfield lighting at RAAF Base Pearce, WA, Gin Gin, WA RAAF East Sale, Vic, and Army Aviation Centre Oakey, Qld. Subject to Government and Parliamentary approvals, construction is planned to commence in mid 2018 and be completed by mid 2021.

Air Traffic Control Complex Infrastructure Project and AIR5431 ph2/3 Fixed Base Defence Air Traffic Management and Control System

The project will provide facilities in support of replacement Air Traffic Management Surveillance, Command and Control Systems under AIR5431 Phases 2 and 3, including the replacement of aged and degraded Air Traffic Control Towers. Subject to Government and Parliamentary approval, construction is planned to commence in mid 2016 and be completed by late 2021.

Navy Guided Weapons Maintenance Facilities

The project will provide new guided and surface weapons testing, maintenance and training facilities at Defence Establishment Orchard Hills, NSW and HMAS Stirling, WA. Subject to Government and Parliamentary approval, construction is planned to commence in late 2017 and be completed by early 2019.

Battlespace Communications System - Land JP 2072 Ph 2 B

The project will provide working, storage and technical facilities to support the introduction of JP2072 Phase 2B equipment. Construction is scheduled to commence mid 2016 and be completed in early 2017.

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