Australia’s peak risk management body says the Federal Government can end the damaging dispute over the Australian Defence Force (ADF) pay rise offer by releasing the risk assessment used to justify its decision.
The government has been criticised for proposing a 1.5% pay rise, which is less than the CPI increase.
Risk Management Institution of Australasia (RMIA) CEO Geoff Crittenden said Treasurer Joe Hockey should release the risk assessment and the reasoning behind the ADF offer to stop the controversy.
“I am confident the government would not and could not have made this decision purely on financial grounds and without conducting a detailed risk assessment of the potential impacts on the long-term defence budget,” Mr Crittenden said.
“The risk assessment would have included a quantitative analysis of changes in retention rates; the cost of replacing specialist ranks and trades; and the impacts on recruitment and retention. It would have examined how the 1.5% offer affected morale and its impact on operational effectiveness.”
Mr Crittenden said the Abbott Government would be acutely aware of the dangers of making decisions without sufficient consideration of risk management.
“They know the damage caused to the previous government when officials failed to conduct a full risk assessment before launching the home insulation scheme,” he said. “Surely this government would not make the same mistake by taking any risks with national security.”
Mr Crittenden, a former British Army officer and an Army Staff College graduate, said he could think of no more appropriate situation requiring a full risk assessment than a budget decision affecting the ADF’s 57,000 personnel.
“It costs a great deal to train soldiers and it is not financially sound to lose them due to poor morale sparked by low pay. That is not smart risk management, nor is it in Australia’s security interests.
“Successive governments have wasted billions of dollars by failing to apply adequate risk management to defence procurement projects, such as the Collins Class submarines and the air warfare destroyers. A fraction of that waste could provide a CPI increase and more to ADF personnel and increase veterans’ pension as well,” Mr Crittenden said.
He said RMIA was keen to talk to governments at all levels about the importance of risk management being embedded in decision-making processes and integrating it into existing and new projects.