Mr Hockey's budget speech recommitted to the Coalition's election promise to build "Defence spending to two per cent of GDP within a decade". The previously announced $12.4 billion expenditure to buy 58 Joint Strike Fighter jets and related equipment demonstrates the government's commitment to military capability. The budget says that more detail will be provided in the 2015 Defence White Paper and this appears to be a direct response to comments in the National Commission of Audit regarding Defence expenditure.

Defence will also be included in general Australian Public Sector (APS) staff reductions, with Defence civilian staff numbers to be reduced by 1200 APS staff and 300 service provider staff by 2017-18. This measure is expected to result in savings of $606 million over four years, which will be reinvested in Defence capability with the focus on increasing efficiency.

Norton Rose Fulbright partner Alena Titterton says that while the plan is for voluntary redundancies and natural attrition to deliver many of these reductions, "Defence senior leadership have personal obligations under the Work Health and Safety Act to exercise due diligence. That due diligence obligation requires ensuring appropriate resources are in place to manage safety risks. Many Defence civilians perform necessary safety support functions and those functions need to be maintained, even in these challenging times. That is also critical to Defence capability."

The National Commission of Audit recommended a number of matters be subject of review including Defence structure, accountabilities, efficiency and funding and Defence Materiel Organisation realignment and reintegration to Defence .The budget announcements include a "first principles review of Defence" intended to make decision making "more streamlined and less bureaucratic", something that the National Commission of Audit acknowledged was already a government commitment. Ms Titterton observes that "a streamlined approach to dealing with the issues is sensible" and "the issues identified by the Commission of Audit are all likely to be closely examined in the single first principles review."

Ms Titterton also says that "there is an overabundance of Defence strategic reviews that have been carried out over the years. Perhaps review terms of reference should focus on the extent to which efficiency reform recommendations have been implemented following those reviews and causal analysis of why those have not been implemented or not delivered the dividends instead of constantly reinventing the wheel in strategic reform."

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