How Defence accounting really works.
Barney (my boss, Air Marshal Barney Stoush, the VCDF) was in a twitting mood when I finally reported on my overseas deployment.
'Have you absorbed some of the wisdom of Solomon?' he asked with what I took to be a jovial smirk. 'If you haven’t gained something, you’ve certainly lost some of that waistline.'
He was right. Three weeks spent checking out our latest overseas deployment had featured some hard slogging through the jungle, some pretty ordinary food (and not much of it) and all without the benefit of some relaxation to pick up a tan. Still, I felt as fit as I have ever done.
Barney had sent me off as his personal envoy to see how the boys and girls were managing in a pretty difficult part of the world. Now, of course, it was back to reality; he wanted my report straight after lunch. At least, I’d got out of the habit of lunch in the past three weeks but I’d also got out of the habit of writing reports for our bureaucratic and political masters.
You see, I’d been living with people whose language was forthright to the point of rudeness and who reported what was happening rather than what they wanted to happen.
Barney told me he wanted a classified version and an unclassified version of my report. This is pretty difficult to achieve these days. Once upon a time, it was enough to do the full classified job and then trim out the classified bits for the unclassified version that could go to the media and the politicians — same thing, really.
One difficulty with this process these days is that the unclassified version has to demonstrate that everything is going to plan so that no awkward questions will be asked, least of all by the politicians who might even realise that real wars are not fought by media releases.
The other difficulty is that someone is likely to leak the classified version to the media so that politicians will be asked awkward questions. That’s another reason why the classified version has to be kept from the politicians because they are the most likely leakers.
In a deployment like the current one, the politicians need to be told that the populace loves us unreservedly when actually they couldn’t care less, at least out in the villages where they have not seen any form of government for 20 years.
It’s a bit different back in the capital where the local spivs are enjoying making money out of us and while those who can speak English line up for the flood of journalists looking for some quotes, useful or otherwise, before the afternoon plane leaves for Australia.
But back to the report. Barney wants a cost estimate to be included so I went over to see the Supervising Finance Officer in charge of overseas deployments. He was blunt.
'Do you want the real figure, the leakable figure or the PR figure?', he asked.
I said I thought he ought to give me all three with the explanation for each and I’d leave it to Barney to decide.
He explained. 'The real figure is what the deployment costs over and above the standing costs we would have to pay for the troops in barracks here in Australia. We subtract the costs of the training exercises they would be doing back here but add the food, fuel and so on consumed for the deployment. We even add the travelling expenses for your inspection trip. Of course, we also add in the pay supplement which adds quite a bit.'
'The leakable figure is the real figure to which we add the ordinary running costs of having the troops back here while the PR figure adds the standard departmental overhead charge which is a fixed 500 per cent. This means that the real cost does not look too stingy and adds credibility to the politicians’ claims to be saving civilisation in the region.'
I objected that, if this were taken to its logical conclusion covering all projects, we would spend the defence budget three or four times over each year.
He demurred. 'We can’t do that because the money isn’t in the bank. Of course, it’s mostly a case of paper shuffling and no one stops to add it all up together. Anyway, it’s an accounting convention and you have to have an MBA to understand that.'
I wondered aloud if we were not heading in the same direction as the old Soviet Union which fudged its figures to such a degree that no one knew what was going on. He tried to reassure me.
'My dear chap, we always know what the real figure is. We may have to delude the public but to delude ourselves would be corrupt. We can’t have that, can we?'.