Introduction

The Defence White Paper 2000 reflected a fundamental shift in thinking in relation to the Army Reserve. It outlined the intention to change the role of the Army Reserve, from providing a trained resource base for the expansion of the Army, to providing fully trained personnel to support frontline forces deployed on operations.

Previous audit reports covered aspects of the Army Reserve and provide a context for the starting point of this audit. ANAO Audit Report No.33 2000–01, Australian Defence Force Reserves, was too early to report on the Army's progress in implementing the major shift in focus for the Army Reserve. However, at that time the report did conclude that the collective military capability of the Army Reserve was very limited. ANAO Audit Report No.25 2004–05, Army Capability Assurance Process, noted that in responding to the strategic guidance contained in the 2000 White Paper, the Army developed the Hardened and Networked Army (HNA) initiative, designed to increase the size and firepower of the land force and improve protection and communication networks for soldiers in the battle field. The HNA model incorporates reliance on the Army Reserve to provide supplementation to the full-time Army in deployment scenarios.

Since the previous audits, the Army has worked on the implementation of the HNA initiative and, in 2008, the Chief of Army announced a further initiative called the Adaptive Army. Under the Adaptive Army initiative the Army will restructure its higher command and control arrangements. The changes that have been made to the Army Reserve since the previous audits have been designed to increase the level of capability of part-time personnel, including through ensuring that the training they receive covers core competencies covered in training provided to full-time personnel.

On 22 February 2008, the Minister for Defence announced the commissioning of a new Defence White Paper (currently expected to be completed in April 2009). In 2008, the Minister for Defence also commissioned a report by an external consultant, Mr George Pappas, regarding the efficiency and management of the Defence budget. In April 2009, Defence advised that the Pappas Report had been considered and accepted by Defence and that subsequent recommendations are expected to be incorporated into the upcoming Strategic Reform Program (SRP). The outcome of both the 2009 White Paper and the SRP could be expected to have an impact on the future use of the Army Reserve and the resources available to the Army for part-time personnel.

Audit scope and objective

The objective of this audit was to:

• assess Army's progress in addressing the issues previously identified in Defence reviews and ANAO audits as affecting the Army Reserve's capability; and
• identify the extent that the Army Reserve is capable of contributing to contemporary Australian Defence Force capability requirements through fulfilling its assigned roles and tasks.

Conclusion

The implementation over recent years of the change in the purpose of the Army Reserve, reflected in the 2000 White Paper, from providing a trained resource base for the expansion of the Australian Army to providing fully trained personnel to support frontline forces deployed on operations has made the Army Reserve much more relevant to the day-to-day operations of the Army. In recent years there has been a high operating tempo for the Army and the Army Reserve has been providing useful capability to the Army both in relation to domestic and overseas operations.

The current capability the Army Reserve is providing to support the Army includes:

• forming the primary component of the ADF deployment to the Solomon Islands;
• Reserve members of Special Operations Forces serving as part of a number of Australia's overseas deployments, including peace enforcement, training and warfighting;
• Regional Force Surveillance Units which play an important role in Australia's surveillance operations and outreach programs to Indigenous communities in remote northern Australia, and provide an opportunity to integrate the specialist skills of local Indigenous and regional Army Reserve soldiers into the surveillance team; and
• Regional Response Forces contributing to domestic security arrangements such as when Australia hosted the Asia-Pacific Economic Co-operation Forum in September 2007 and for World Youth Day in July 2008 and for natural disasters relief, such as after Cyclone Larry in Queensland in 2007 and the recent 2009 Victorian bushfire crisis.

Defence has introduced strategies to allow the Army Reserve's identified role, to sustain and reinforce the Army's operational forces, to be translated to Reserve capability. Defence has developed specific categories of Reserve personnel (such as the High Readiness Reserve¹ and the Reserve Response Forces²) and introduced training and recruitment practices specifically designed to support the Army Reserve in its role.

There are around 27 000 permanent fulltime members of the Australian Regular Army (ARA).³ By contrast, the total posted strength of the Army Reserve at 30 June 2008 was some 15 400 personnel, of which nearly 4200 were yet to be trained (see Table 3.1). In addition to the around 11 200 personnel in the posted trained force, at 30 June 2008 there were nearly 1100 Army Reserve and Standby Reserve members who were undertaking continuous full-time service with the Army and so were not counted within the Army Reserve posted strength.

The total posted strength of the Army Reserve of 15 400 personnel at 30 June 2008 represented only 71 per cent of the maximum authorised strength of 21 721 and a reduction compared to the actual personnel numbers of the Army Reserve of 21 671 at 30 June 1998. Other factors affecting the capability able to be delivered by the Army Reserve today is the level of individual readiness of members and members' level of attendance at parades.⁴ At 30 June 2008, individual readiness requirements were met by only 51.7 per cent of Army Reserve members.⁵ The effect of this lower level of individual readiness is to reduce the level of preparedness of the Army Reserve's trained force. In April 2009, Defence advised that at 27 March 2009 45 per cent of the trained Army Reserve Forces and 59.9 per cent of the ARA met individual readiness requirements.
Defence has made progress in addressing issues identified in previous reviews of the Army Reserve. Despite Defence's progression over recent years of measures to allow the Army Reserve to sustain and reinforce the Army's operational forces, the Army Reserve's effectiveness is constrained by a number of factors. These include delays in developing an appropriate force structure for the Army Reserve; barriers to ease of movement of personnel between the Australian Regular Army (ARA) and the Army Reserve⁶; a lack of cost information to inform longer term decisions regarding the Army Reserve, including which capabilities the Army Reserve should provide; and some Army Reserve depots having either no or limited access to basic Defence electronic communication methods.

Key findings by chapter

Role definition and high level planning (Chapter 2)

The Army has set down a broad statement of the role of the Army Reserve as being:

‘To provide specified individual and collective capability to support, sustain and reinforce Army's operational forces.⁷'

The movement towards this role formally commenced with the White Paper in 2000 and there has been considerable progress in terms of the Army Reserve being properly considered in the development of the Hardened and Networked Army, the Army Objective Force 2016⁸ and the Army After Next.⁹ Implementation of key elements of the overall strategy, such as an appropriate force structure for the Army Reserve, is still to occur, and is currently expected to be completed by early 2010. The Defence White Paper 2009 could be expected to have an impact on how Defence uses the Army Reserve in the future.

Defence had planned to revise the force structure of the Army Reserve in 2008. However, there have been delays in developing a new force structure that best meets the expected role of the Army Reserve today. The current White Paper development process has added to the uncertainty surrounding future Army Reserve capability requirements.

In addition to the issue of the force structure, there is a need to address the policies required to support the change from the Reserve being a mobilisation force to it effectively supporting ongoing Army operations, with various elements of the Army Reserve providing fully effective part-time and full-time support as part of the Army's overall capability. For example, there are currently barriers to both ease of movement of personnel¹⁰ between the ARA and the Army Reserve and interchangability¹¹ of ARA and Reserve personnel. Given the changing demographics of Reserve members, there are also issues that need to be addressed in respect of the location of Reserve units.

Appropriate cost information related to the Army Reserve would assist in addressing the issues outlined in paragraph 15. Given that the Army Reserve routinely operates in an integrated manner with the ARA, it is primarily in making longer term decisions regarding Army Reserve policies or Army capabilities that such cost information is required. This information could be obtained by using a periodic assessment of costs.

Existing capability (Chapter 3)

When the Approved Future Force for the Army Reserve is developed (currently planned to occur over the period April 2009 to November 2011), the Army will have a suitable benchmark against which current Army Reserve personnel numbers and capability could be assessed. As noted earlier, the total posted strength of the Army Reserve of some 15 400 personnel at 30 June 2008 was 71 per cent of its current maximum authorised positions (21 721) and nearly 4200 of these personnel were yet to be trained (see Table 3.1).

Defence data indicates that approximately 20 per cent of the Army Reserve is not attending parades.¹² Such an attendance pattern is likely to reduce the overall effectiveness of the Reserve, and can affect the overall readiness¹³ of the Army Reserve. As at 30 June 2008, individual readiness requirements were met by only 51.7 per cent of Army Reserve members.¹⁴ The capacity of some members of the Army Reserve in remote locations to meet readiness requirements is affected by the difficulty and cost associated with their meeting weapons, medical and dental requirements. The effect of this lower level of AIRN readiness is to reduce the level of preparedness of the Army Reserve's trained force.¹⁵

Defence's Annual Report and advice provided to the ANAO indicates that the Army Reserve is providing effective capability to support the Army across a number of different areas. Since the ANAO's previous reports,¹⁶ the Army has made progress towards changing the Army Reserve to an effective part-time force and the Army Reserve is providing increased capability to the Army. The Army Reserve overseas deployment numbers exceeded 15 per cent of total Army overseas deployments. The capability that the Army Reserve is now providing to the Army covers a range of circumstances, including:

• the contribution of Army Reserve units and individuals to Australia's overseas operations (including Special Operations). In particular, the Army Reserve is playing a major role in helping fulfil Australia's responsibilities to assist the Solomon Islands;
• support provided by the Reserve Response Forces contribution to domestic security operations within Australia;
• the ongoing contribution of the Regional Force Surveillance Units to Australia's border security arrangements;
• Army Reserve personnel, including highly specialised medical practitioners, undertaking continuous full time service to address shortages in the ARA; and
• the specialist support that Active and Standby Reserve personnel provide for project based assignments.¹⁷

Previous ANAO audits had identified issues in relation to equipment availability for the Reserve. During fieldwork for this audit, the ANAO was informed by units that equipment shortages were not affecting their ability to carry out their roles. Much of the equipment required by the Army Reserve is met through the loan pool arrangements operated by the Army. There was a broad understanding that any deficiencies that existed in a unit's equipment holdings were remedied prior to deployment of an individual or the unit on operational duties.

Recruitment, retention and training (Chapter 4)

Recruitment and retention are important issues for the Army Reserve. Reserve recruitment numbers have been declining over the last ten years but it has plateaued in the past few years.¹⁸ There are a number of issues affecting the retention of Reservists including: the length of time required to undertake the requisite training; the difficulty Reservists face in gaining recognition of prior learning; the difficulty in getting places on training courses or courses being changed at short notice; and competition with civilian employment and family life. Defence has previously identified that '50 per cent of Army Reserve soldiers never progress beyond the training force'.¹⁹

Particular initiatives that have been used to aid recruitment and retention include:

• measures aimed at promoting recruitment and retention for Army Reserve specialist medical and health personnel (implementing a specialist reinforcement platoon and establishing contact with selected medical undergraduates);
• the Employer Support Payment (ESP) Scheme,²⁰ Reserve Health Support Allowance, and the Defence Home Ownership Assistance Scheme (DHOAS);²¹ and
• employer engagement activities to promote Army Reserve activities to employers and the community.²³

Training programs such as the Army Reserve Traineeship and Apprenticeship Program (ARTAP)²⁴ are new initiatives aiming to increase the number of personnel in critical trades in the Reserve. Defence considers that it is likely that the Army will continue to suffer deficiencies across some ranks and in many trade skill areas. Retention, accelerated promotion and re-training existing staff into new trade areas are expected to assist in remediating deficiencies in the ARA, but will be difficult in the Army Reserve where training in a particular trade can take upwards of four years, even if the Reservist enters the Army Reserve with a level of existing skill. Army Reservists who enlist with limited skills may take longer to become proficient in a particular trade.

Defence advised that there are separate processes for collective and individual engagement of Reservists on operational and overseas deployments. For collective deployments, a brigade or unit is tasked with providing the required number of personnel. Individual operational and overseas deployments are filled differently for officers and soldiers. A website, “Hot Ops Jobs”, lists available deployment positions for officers.²⁵ Soldiers, on the other hand, are nominated by the Soldier Career Management Agency (SCMA) for deployment opportunities. There was a general lack of understanding and awareness in the Reserve units visited during fieldwork for this audit of how individuals were selected for deployments.

Changes have been made to Reserve training under the HNA to provide Reservists with the individual and collective training required to complete their specified tasks in their unit. The Hardened and Networked Army Training Model (HTM)²⁶ aims to meet the needs of the HNA and to prepare Reservists to a job-ready standard for their Army Reserve employment category. The principle behind the HTM is that a Reservist is on a training continuum from the date of enlistment in the Reserves. The model also allows Reservists to move through the training continuum at their own pace, based on their availability for training and Reserve career aspirations. In addition, collective training and pre-deployment preparation are undertaken to produce individuals and units that are able to successfully conduct operations. The Army has devoted considerable resources to putting in place training that is appropriate to the current role of the Army Reserves and this investment is delivering capability to the Army.

Support for management and administration (Chapter 5)

The Army Reserve has a range of mechanisms available to capture personnel and readiness data and provide information to senior officers. These mechanisms could be better utilised to enable Defence senior management to make more informed decisions about the level and nature of the capability within the Army Reserve.

Reporting on Army Reserve preparedness and capability is largely dependant on the chain of command identifying and progressing issues to more senior officers. This takes place within the overall reporting arrangements for the Army. Each month Army Preparedness Reports flow up the chain of command, identifying individual unit's abilities to meet the requirements of the Chief of Army's Capability Directive. Army Reserve matters were also included in the Army Balanced Scorecard. As at May 2008 the Scorecard indicated there is an asset liability gap, whereby the Army Reserve has less personnel than had been planned. In the case of 2nd Division (which contains the majority of Reserves), twice yearly conferences are held to explore capability and personnel issues.

Defence advised that the civilian skills and qualifications of Reservists are not generally recorded on the Personnel Management Key Solution (PMKeyS) system.²⁷ The reasons included the time required to obtain recognition for prior learning (including for qualifications issued by an Australian University) and because Reservists are not routinely asked to disclose their civilian skills.²⁸ PMKeyS currently has the capacity for the civilian skills and qualifications of Reservists to be recorded. This information could be used to select Reservists with specific skills for civil/military roles on deployment (for example civil engineers, town planners or financial professionals) and for long term planning purposes. The ANAO considers that there would be benefit in Defence requesting this information from Reserve personnel and, where provided, updating the PMKeyS system.

The primary method used by the Army for communication to Army Reserve personnel is electronic, either through email or via online instruction libraries. There are currently Army Reserve depots with either no or limited access to basic Defence electronic communication methods. Given the reliance on technology to communicate with Army Reserve units and individual Reservists, it is important that all Army Reserve units have access to Defence networks.

Defence increasingly expects that Reservists will take joint responsibility for keeping their personnel records up to date and accurate. Given the limited time available to Reservists during training, Defence could consider developing modern, secure technological options to allow Reservists to access their information off-site.

Agency response

Defence welcomes the Australian National Audit Office (ANAO) audit on Army Reserve Forces. The report acknowledges that Defence has made progress in enhancing the capability provided by the Army Reserves to Army since the previous ANAO audit in 2004–05 on the Army Capability Assurance Process.

The ANAO report comments favourably on enhancements to Army Reserve capability resulting from the Hardened and Networked Army (HNA) initiative. This initiative re-focused the Army Reserve to provide smaller teams at higher readiness rather than large units at low readiness through the introduction of the Reserve Response Forces and the High Readiness Reserve. It also led to the development of the Hardened and Networked Army Training Model, which provided the path for Reservists to acquire operational skill sets.

The report acknowledges that in 2008, Army moved from the HNA to the Adaptive Army initiative, which will lead to the restructure of the higher command and control arrangements within Army. Further improvements to the structure of the Army Reserve will be embedded through the implementation of The Army Plan Part One, the conduct of an Approved Future Force review and through the individual Force Structure reviews that will be on-going until 2014.

Defence agrees with all four recommendations in the ANAO report and has already commenced action to implement some of the recommendations which will remediate deficiencies and improve capability.

Footnotes

¹ The High Readiness Reserve (HRR) is a group of Army Reserve personnel who sign a two year contract to be available for voluntary deployment at short notice, and who possess the agreed Hardened and Networked Army Training Model (HTM) competencies relevant to their employment category, which are in line with those of their Australian Regular Army (ARA) counterparts. HRR personnel have an increased annual training commitment of between 32 and 50 days per year compared to the Active Reserve which has an annual training commitment of 20 days.

² The Army has also established Reserve Response Forces (RRF) which are regionally based sub-units capable of providing Defence Assistance to the Civil Authority and Defence Force Aid to the Civilian Authority. The RRF is designed to augment other domestic security capacities and undertake additional roles and tasks involving either niche skills or specific tasks for trained and disciplined small teams and sub-units.

³ This figure is correct at 21 March 2009 and includes ADF Gap Year members.

⁴ Parading is the Army term for attending training. Defence data indicates that approximately 20 per cent of the Army Reserve is not attending parades.

⁵ This includes Army Reserve members serving on Continuous Full Time Service.

⁶ For example, the lack of consistent employment conditions between full-time and part-time personnel.

⁷ Submission to the Chief of Army Senior Advisory Committee No 08/04, Army Reserve roles, tasks and responsibilities as part of the Hardened and Networked Army p. 6, 30.

⁸ The Army Objective Force 2016 is the implementation of the various force structure reviews that are being or will be undertaken.

⁹ The work being undertaken by the Army in planning for the longer term (2020 to 2040) is termed the Army After Next (AAN). AAN was endorsed and agreed to within Defence in the second half of 2008. Defence advised ANAO that, from an Army Reserve perspective, the AAN may involve the full spectrum of Army Reserve capabilities, subject to planning requirements.

¹⁰ Ease of movement relates to issues associated with differing pay structures and terms and conditions.

¹¹ Interchangability relates to issues associated with levels of training and preparation for operational deployment.

¹² Defence advises that this analysis may include personnel who have left the Army Reserve in the year, those who may have moved to or from Continuous Full Time Service (and been paid under the Australian Regular Army pay system), new members and Standby Reserve members who have paraded. These matters would generally serve to increase the percentage of personnel showing as not attending parades.

¹³ Individual members of the Army are required to meet readiness requirements set out in the Army Individual Readiness Notice. The Army Individual Readiness Notice (AIRN) policy's purpose is to ensure that all Army personnel are capable of being deployed on operations at short notice. AIRN includes measures related to availability, employment, medical, dental, physical and weapons.

¹⁴ This includes Army Reserve members serving on Continuous Full Time Service.

¹⁵ As noted in paragraph 17, the total posted strength of the Army Reserve as at 30 June 2008 was some 15 400. As around 4200 of these personnel were posted to the training force (that is, were yet to complete their initial training), the total trained force of the Army Reserve was some 11 200.

¹⁶ ANAO Audit Report No.33 2000–01, Australian Defence Force Reserves, and ANAO Audit Report No.25 2004–05, Army Capability Assurance Process.

¹⁷ These project tasks are varied in content and duration, and can include support for operations, training, software development or administrative support.

¹⁸ Defence has previously predicted that it would continue to decline. However the current economic climate means that numbers may not fall to predicted levels.

¹⁹ Department of Defence, Preliminary capability and cost proposal for the HNA Army Reserve model, March 2005, p. 11.

²⁰ The ESP scheme provides eligible employers with financial assistance to help offset the costs associated with releasing employees for Reserve service. ESP is paid at a set weekly rate, regardless of the employee's salary, and is equivalent to average weekly earnings as at 1 July of that year.

²¹ On 9 May 2006, the Government announced key Reserve remuneration incentives including a $600 health support allowance for all Active Reservists. The health support allowance is to assist the Reservist in meeting the costs associated with maintaining their required medical and dental readiness.

²² In April 2008, the Government announced that Defence Reservists with more than eight years of service and with a minimum of an additional year's service credit, as at 1 July 2008 are eligible to participate in the Defence Home Ownership Assistance Scheme (DHOAS) which provides home loan subsides to assist members in buying their own home.

²³ Exercise Executive Stretch (EES) and Boss Lift are both employer engagement activities run by Defence. These exercises aim to give employers first hand experience and insight into the activities and training Reservists undertake.

²⁴ The Army Reserve Traineeship and Apprenticeship Program (ARTAP) is a joint partnership between the Army Reserve and civilian employers. Army's intent for the program is to expand the technical capability of the Reserve (specifically to fill critical trade shortages) and provide qualified members ongoing employment within the Army Reserve. ARTAP provides an opportunity for suitable applicants to enlist in the Army Reserve and attain military skills, while also undertaking a civilian apprenticeship or traineeship with an employer or Group Training Organisation (GTO).

²⁵ Although this is primarily for ARA officers, Army Reserve officers with access to the Defence Restricted Network would be able to access this website.

²⁶ In April 2009 Defence advised that this is now called the Army Training Model (ATM).

²⁷ The Personnel Management Key Solution (PMKeyS) system retains personnel records for all Defence staff, including the Army Reserve. This information includes personal information, rank level, training achievements or assessed prior learning, qualifications, training and development plans, and individual readiness.

²⁸ The ANAO was also informed that some Reservists did not wish to disclose their civilian skills or qualifications as they had joined the Army Reserve to do something different from their normal role.