4.4 Defence Portfolio

The Defence Portfolio’s primary focus is to protect and advance Australia’s strategic interests by providing military forces and supporting those forces in the defence of Australia and its strategic interests. To achieve this, Defence prepares for and conducts military operations and other tasks as directed by government.

While the Department of Veterans’ Affairs and associated agencies is formally part of the Defence Portfolio, in practice it acts as a separate portfolio – with the Minister for Veterans’ Affairs having his responsibilities detailed in the Administrative Arrangements Order and publishing a separate Portfolio Budget Statement.

The Minister for Defence administers 31 pieces of legislation ranging from the Defence Act 1903 to the Cockatoo and Schnapper Islands Act 1949.
The Defence Portfolio (excluding Veterans’ Affairs) receives total funding of $31.2 billion of which $26.8 billion is departmental funding and $4.4 billion is administered funding (mostly military superannuation). A total of 100,500 people are employed in the portfolio, mostly military personnel (58,235 permanent forces and 20,450 reservists).

Table 4.4.1: Portfolio resourcing: Defence (excluding Veterans’ Affairs)

Funding ($'000)

Staffing

Entity

Departmental

Administered

Total

ASL

Department of Defence

         25,341,513

           4,425,106

         29,766,619

       94,232

Defence Housing Australia

           1,197,786

                            -

            1,197,786

             614

Defence Materiel Organisation

               907,791

           8,769,020

            9,676,811

         5,670

PORTFOLIO (1)

26,747,177

4,425,106

31,172,283

100,516

Source: Department of Finance. 2013‑14 Budget updated for machinery of government changes.
(1) Total excludes funds transferred between portfolio agencies.

The major entities in the Defence Portfolio are the Department of Defence, the Defence Materiel Organisation (DMO) – a prescribed agency – and the Australian Defence Force (ADF). While the ADF is a legal entity, and all military personnel legally belong to the ADF, funding is provided via the Department and DMO. Thus in practice Defence works as a single integrated organisation.

The DMO receives an appropriation of $907.8 million, but most of its funding – $8.8 billion – is provided via the Department for the acquisition and maintenance of Defence equipment. The relationship between DMO and Defence was a major issue considered by the Commission, with the report recommending reintegration into Defence.

The remaining material entity is Defence Housing Australia (DHA) which exists to provide housing and related services for members of the ADF and their families in line with the Defence operational requirements. It receives $1.2 billion in funding, mostly from Defence.

Within the portfolio there are a number of canteens and trust funds that provide retail services on bases, small loans to ADF personnel and holiday accommodation. These are not directly Budget funded, although they receive some Defence support. The Australian Strategic Policy Institute Ltd is a Defence owned corporation which receives an annual grant from Defence.

Three of the six intelligence agencies listed in the Intelligence Services Act 2001 are components of the Department of Defence – the Australian Signals Directorate, the Defence Imagery and Geospatial Organisation and the Defence Intelligence Organisation.

Chart 4.4.1 is a graphical representation of the relative size of bodies within the Defence Portfolio, including the Department of Veterans’ Affairs but excluding military personnel.

Chart 4.4.1: Defence

This chart shows the Department and Portfolio agencies, as described above, diagrammatically.

This chart shows the Department and Portfolio agencies, as described above, diagrammatically.