Press Conference, Canberra ACT

Subjects: Albanese Government’s support for our ADF personnel, The Defence Strategic Review, Working with Defence Forces in the Pacific, Cost of living.

RICHARD MARLES, ACTING PRIME MINISTER: Welcome everyone here to ADFA. It's great to be here this morning with the Minister for Defence Personnel Matt Keogh and the Assistant Minister for Defence Matt Thistlethwaite. And today we're making an important announcement in relation to investing in our Defence Force personnel. Right now we've got a real issue with our Defence Force personnel and this was discussed in the Defence Strategic Review, which we announced last week. Despite the fact that the average funded strength of our Defence Force is growing, we, in terms of actual members of our Defence Force we are 3,400 below that average funded strength, which speaks to the fact that we have an issue in terms of making sure that we are recruiting the number of Defence Force personnel that we need, and that we are retaining them within our Defence Force.

And so today, we are announcing that the Albanese Government will be providing a $50,000 retention bonus for those members of the Defence Force, on completion of their mandatory period of service, on the basis that those personnel take up another three years of service. This is an important step which will encourage people to stay in the Defence Force. And across the forward estimates represents a $400 million spend. As I said, investing in our Defence Force personnel was one of the six priorities that we identified last week in the Government's response to the Defence Strategic Review. This really is a start. But it does build on the announcement that we made in last year's budget around extending the eligibility for the Defence Home Ownership Assistance Scheme. And to follow on from that, we will also be conducting a review into what other measures we can take in relation to Defence housing and Defence home ownership, again, to make working in the Defence Force more attractive. But we need also to be telling the story to young Australians about the opportunities that exist in working in the Defence Force and pursuing a career in uniform and that's why we're here at the Australian Defence Force Academy today speaking with young cadets about the decisions that they have made to pursue a career in the Defence Force, the opportunities that they see and the really exciting possibilities that there are for their future. And these are people who are doing a degree through ADFA, which means through the University of New South Wales, but pursuing really exciting opportunities across a wide variety of careers within our Defence Force. And in the process, they're making a difference and serving our nation. And you can tell when you speak to them how important that service is, in terms of giving meaning to their career and to their lives. That is something that we need to be talking to our young people about more so that we're encouraging more people to pursue a career in our Defence Force.

Today's announcement is a really important step on a built on the other priorities that we have been focusing on in response to the Defence Strategic Review. But getting the human element right, of building our Defence Force for future is so profoundly important and today is a very important step in that direction. I will ask Matt to talk to the detail.

MATT KEOGH, MINISTER FOR DEFENCE PERSONNEL: Thanks Richard. As Richard said, we know that we are facing problems in retaining people in our Defence Force and we've seen that that's been a problem for quite some time. And previously, we've made announcements around increasing access to family health benefits for serving members, improving training opportunities for members in our Defence Force. But we know that it's important that we invest further in our most important capability and that's our people. At a time where we see critical skill shortages around the country and record low levels of unemployment, these people that we've invested so much in and that make such great employees are in high demand around the country, but they're in even higher demand in our Defence Force and we need to keep them. And that's why we're investing in them with a $50,000 Continuation Bonus, once they've committed, finalised their initial period of service, and that can be a period of service that ranges from three, four years even longer, depending on their specialty type of service in our Defence Force. But once they've finished that, they sign on for another three years, they'll get an additional $50,000 upfront Continuation Bonus to stay in our Defence Force, to continue doing that which they signed up to do which was to look after our nation, to serve in our national interest. We know that people sign up to our Defence Force because they're looking for that sense of purpose, that opportunity to serve our nation. And we want them to continue to do that. And having invested in making them such great people to serve our nation, we want to continue to invest in them and their future, not only by making sure they get access to great training through the Defence Force and that we support them and their families through great health care, but by giving them this this $50,000 Continuation Bonus to stay serving in our Defence Force. Because at the end of the day it's our defence people that are our most important capability. We recognise that we need to grow that. We need to recruit more people to join our Defence Force. But critically we need to keep those people that we have invested so much in training, that have developed that great core skill in our Defence Force to continue to contribute to our capability, to make sure that we keep them. And that's why this continuation bonus is such an important part of doing that, to make sure that they get the benefit for what they have done for us and we continue to invest in them, in their future in our Defence Force. And of course this is only one part, because there's also how we will continue to assist them in their housing as well and I'll hand over to Matt Thistlethwaite to say a bit more about that.

MATT THISTLETHWAITE, ASSISTANT MINISTER FOR DEFENCE: Thanks, Matt. Firstly, thanks to the ADFA cadets that shared their experiences with us this morning as new recruits to the Australian Defence Force. I think it's fair to say having spoken to some of those cadets this morning that the future defence of our nation is in good hands. And those cadets were explaining to me that, like the rest of Australia, that they want access to good quality, affordable, safe accommodation. Particularly given that during their career in the Australian Defence Force, they're quite often required to move around for training and deployment purposes, and their families often move with them. So they want access to safe, affordable accommodation that is close to their place of work, and importantly, close to good quality education for their kids. And that's what the announcement that we're making today is all about. We’re proposing to review the adequacy of defence housing across the country, both the Defence Home Ownership Assistance Scheme and the rental scheme to make sure that we're meeting the needs of Defence Force personnel into the future, and we can attract and retain Defence Force personnel for a long rewarding career in our Defence Forces.

This announcement comes on the back of the legislative reforms that we made last year to the Defence Home Ownership Assistance Scheme where we improved the qualification periods, we reduced and halved the qualification periods, we removed the post service cap for veterans. So we made it easier for Defence Force personnel and veterans to access that important assistance scheme. And already, that is paying benefits. We know that there's been since the first of January this year, up until March, there were 1.500 applications for the Defence Home Ownership Assistance Scheme, or DHOAS as it's known. That's an increase of 681 applications on the same period last year. So the reforms that the Government has made to DHOAS already are making a difference, but we know that we need to do more. And that's what this announcement about the review into defence housing is today. The review will begin in July, and it will conclude in February. And we'll look at the recommendations that are made to try and ensure that we're meeting the needs of new recruits, and Defence Force personnel and veterans into the future.

REPORTER: What are some of those broader issues that we're seeing when it comes to retaining and attracting personnel?

MARLES: It's a good question. I think we are – firstly, Defence is not immune from the factors that we're seeing in the broader economy. And one of the issues that we faced over the last few years in the aftermath, or during and in the aftermath of the pandemic, is really a skills challenge across the entire country. And Defence feels that as well. And because of that, you know, there are opportunity. I mean, Defence does a lot of training and skills people up, so those in the Defence Force are highly sought after in the wider economy, and there are lots of opportunities for people who have had a career in defence to pursue their career in the wider economy. And that's obviously great, but It also creates a challenge for Defence in terms of retaining people in the Defence Force. With all of those challenges, though, we need to be growing our Defence Force. And we certainly need to be retaining it at the funded strength levels that are in place right now, which is why this measure is so important.

REPORTER: Is it tax free, and what's the rationale behind a one-off payment at the start of the three years as opposed to incremental (inaudible)?

KEOGH: It's not a tax free payment. But the rationale behind an upfront payment is that it provides real value to the service member and their family. So if they want to put that money towards a housing deposit, or a new car, or whatever it is that they need, it gives them a lump sum that they're able to access to do that. And that's fundamentally important, if we just tried to do this through some sort of adjustment to pay scales or pay rates, it doesn't have the incentivizing feature that we're after. There are other some other incentive payments that exist for very specialist roles within Defence and certain periods of service. And so in looking at how they have worked, we've identified that having a lump sum of this nature does create that incentive for someone to sign on for the additional three years so that we don't have a loss of people after that initial service period, where they've gone through that training, but importantly, have developed that key skills and capability we need in Defence, and we don't want to lose that at that critical juncture. And so having them sign on for the further three years is very important for maintaining capability, keeping those people, and having that lump sum is what we see is effective in being able to drive that.

REPORTER: Will they have to pay it back if they leave?

KEOGH: If they leave at some point over that three years, there would be a pro-rata clawback opportunity. So it's quite clear what they're signing up for when they do that, just as it is when someone joins Defence ordinarily.

JOURNALIST: Mr. Marles, we've seen reports this morning that PNG would be open to being embedded in our Defence Forces. Do you have any comments on that and opening- or embeds to the wider Pacific? Would that be something that you'd consider?

MARLES: Well, we are working very closely with Papua New Guinea around providing opportunities for people from PNG- well PNG Defence Force within the Australian Defence Force and vice versa. That already happens. And it already happens, for example, with other defence forces around the world, including defence forces in the Pacific. So there's nothing new about having exchanges and opportunities for those in the defensive forces of our friends and allies to pursue opportunities in the Australian Defence Force, as of course there is for members of the ADF pursuing those opportunities in other defence forces around the world. And this is something we want to build on. It gives people a really strong personal connection with colleagues in defence forces of likeminded countries- it makes us closer. It is an idea we see as having enormous merit and one which builds cooperation between our defence forces. And so, as I say, this is something which has been around for a long time. And we absolutely want to see what opportunities there are to build on it.

JOURNALIST: We've also seen reports this morning that under the classified Defence Strategic Review that war gaming scenarios means we're not ready to face China. What's your assessment on that? Are we stuffed?

MARLES: I applaud the eloquence with which you've asked the question. Look, obviously, I'm not going to go into those elements of the Defence Strategic Review, which are classified.

JOURNALIST: Did the Defence Strategic Review, map out what would happen if China had a foothold in the Pacific?

MARLES: Well, again, I'm not about to speculate what's in the classified version of the Defence Strategic Review. We made the public version public last week and the government's response to it. It represents a very significant re-tasking of the Australian Defence Force and reshaping the Defence Force that is there for people to see.

JOURNALIST: To flip it then; how has this report impacted the integrity of the Defence Force in the Defence Strategic Review now that it's out there in the public? So given that, you know, the reports are now public that we may or may not be able to handle a threat from China, has that impacted how we approach things?

MARLES: Well, we've not been shy in explaining to the Australian people, and the Defence Strategic Review is very clear in the public version about the complexity of the strategic landscape that we face. It also makes clear that our Defence Force has done a fantastic job and is highly capable, and the posture that we've had in relation to our Defence Force has served us well over many decades. But what the Defence Strategic Review does make clear is that that posture is no longer fit for purpose, by virtue of the complexity of the strategic circumstances that we face. And so, we're now working through with a sense of controlled urgency to reshape our Defence Force and to reshape the posture of our Defence Force to meet the strategic circumstances that we find. And we're confident that we can do that. But it is obviously a very significant challenge, and we're very cognisant of that.

JOURNALIST: Yesterday, the Singaporean Foreign Minister said Taiwan would be the reddest of red lines for China. Given that we just had the Defence Strategic Review and tensions are heightening, should push comes to shove in the next decade, are we going to be ready given that reviews have been pushed back for a year, acquisitions won't happen until 2027, in some cases?

MARLES: Well, I'm obviously not going to speculate about, you know, the prospects of future scenarios. But our Defence Force needs to be reshaped, but we are confident that we can do it. And we are confident that we can do it with the urgency that we are bringing to bear here with all that we have done in announcing Australia acquiring a nuclear-powered submarine capability and all that we've done in announcing the outcomes of that Strategic Review and the government's response to it, including the announcement that we're making today. Now, we're not wasting any time here. And we are taking all the steps necessary to reshape our Defence Force so that we can meet the circumstances. Now with that focused efforts, we are confident that we can do this and the Defence Force can meet the needs of our country going forward. But it's absolutely essential that we do reshape the Defence Force and that we articulate and provide a posture for our Defence Force, which meets the moment of the strategic complexities that we face.

JOURNALIST: Can I just ask; will increasing the rate of Jobseeker- which hasn't been confirmed- for people over the age of 55 be discriminatory or is there not young people that are going through the same thing that would benefit from an increase like that.

MARLES: Well look, obviously, on Tuesday, the Budget isn't week today. So I'm not about to speculate what about what may or may not be in the Budget and go into conversations about that. What you'll see in the Budget a week from now, is a Budget which is fiscally responsible, which is a Budget that focuses on the pressures in respect of the cost of living which is being faced by all Australians and a Budget which goes to those who are most vulnerable in our community.

ENDS