The main mechanism by which Defence is held accountable to the public for management of its A$20-billion-per-year capability acquisition program has ended.
In a press release on 6 March, the Parliamentary Joint Committee of Public Accounts and Audit (JCPAA) said it had ‘resolved not to request the Department of Defence and Australian National Audit Office continue to produce the Major Projects Report.’
Balancing transparency and secrecy will be much harder under new scrutiny arrangements to be instituted this year.
Since 2008, the annual Major Projects Report (MPR) has given the public and the government detailed information on how selected acquisition projects have performed against planned schedules, scopes and budgets. This information is sourced directly from Defence’s project-management teams and independently reviewed by ANAO.
Getting value for money out of Defence’s acquisition program is a persistent concern for the government. While particularly troubled acquisitions become the subject of standalone ANAO reports, the MPR has provided a recurring, deep and broad level of transparency across the whole acquisition enterprise. It has shone a light on how and why Defence projects have underperformed, offered a fine-grained look at systemic issues in capability acquisition and given Defence a chance to show how it has learned from those issues. For independent analysis of defence spending and capability, the MPR has been invaluable.
However, since 2023 Defence has withheld more information on project performance on the grounds that releasing it might threaten national security. In the past three MPRs, nearly every project has had capability delivery dates (among other information) retracted as potential security risks. This compromised the purpose of the MPR and rendered its previous depth of analysis impossible. On 7 November, JCPAA deputy chair Senator Matt O’Sullivan said:
Given the manpower that is involved in both the ANAO and Defence working on this report, and now we’re in a situation where 20 out of 21 projects cannot be properly reported on … what’s the point of this process if we can’t really get down and get the oversight and the transparency that would be required to properly scrutinise, as a parliament, this huge expenditure from the Commonwealth into Defence?
O’Sullivan’s question appears now to have an answer: there is no point. This is an extreme answer. Data retractions reduced the utility of the MPR, but it still represented a world-class commitment to public disclosure. Defence’s internal systems, spurred by two decades of mandatory reporting, have never been more capable of and more cost-effective at providing timely and comprehensive transparency about major projects. The JCPAA can also change how the MPR is composed. It’s surprising that the committee has deemed the entire MPR process unfit for purpose. What will replace it isn’t yet clear.
The JCPAA has said it would examine ‘in greater detail’ ANAO performance audits conducted within the Defence portfolio. Those have a lot of depth given their narrow scope, but the recurring, cross-sectional aspect of the MPR will be tough to reproduce. The JCPAA’s intent to ‘decide in the coming months on a structured and robust program of scrutiny’ is stated without elaboration. Whatever it entails, it will very likely involve establishing a division of labour with the Joint Standing Committee on Defence (JSCD), legislated earlier this month, which has a mandate to scrutinise the capability acquisition program and to take classified evidence in doing so.
The risk there is that the JSCD enables parliamentary scrutiny of defence acquisitions that is deep, broad, cross-sectional and largely if not totally closed to the public. This isn’t unimaginable: the JSCD is modelled closely on the Parliamentary Joint Committee on Intelligence and Security, whose annual scrutiny of intelligence agencies’ spending publishes only a terse committee report with little detail.
Even if new scrutiny arrangements don’t go that far, a continuation of the MPR’s tendency to disclose less will risk compromising evidence-based public debate on Australian strategic policy. This would also inhibit the new arrangements from solving the problem that the MPR evidently couldn’t: how can the government be held to account for executing the National Defence Strategy when its progress on one of the strategy’s central parts—accelerating capability delivery—can’t be publicly discussed?
Much about capability acquisition is worth keeping secret. For Parliament, designing a scrutiny program that balances transparency in the public interest with secrecy in the national interest will be much more difficult than when the MPR was created. It would be easier to lock scrutiny of Defence’s schedule performance behind closed doors in the JSCD. That choice is not for outsiders to make. We can only advise those making it that the hard road is often the only one that gets you to a place you want to be.