P 030541Z MAR 09
FM AMEMBASSY CANBERRA
TO SECSTATE WASHDC PRIORITY 1137
INFO AMCONSUL MELBOURNE PRIORITY 
AMCONSUL PERTH PRIORITY 
AMCONSUL SYDNEY PRIORITY 
CIA WASHINGTON DC PRIORITY
CDR USPACOM HONOLULU HI PRIORITY
DIA WASHINGTON DC PRIORITY
SECDEF WASHINGTON DC PRIORITY
NSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L CANBERRA 000213 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 03/01/2019 
TAGS: PGOV PREL MARR AS
SUBJECT: FITZGIBBON AND DEFENCE UNDER FIRE OVER SAS PAY 
 
Classified By: Political Counselor James F. Cole, for reasons 1.4 (b) 
and (d). 
 
 
 ¶1. (C/NF) SUMMARY: Defence Minister Joel Fitzgibbon and 
senior Defence officials have come under intense pressure 
over bungled handling of salary payments to Special Air 
Service (SAS) troops, the elite special forces who are doing 
the bulk of Australia's fighting in Afghanistan.  In 
Parliament last week, Fitzgibbon was unable to give a 
coherent answer when asked why some SAS soldiers on the front 
lines had their pay reduced to zero, later acknowledging he 
had ordered the problem fixed four months earlier.  The Prime 
Minister is reportedly furious over this latest embarrassment 
to his government, with the Opposition and some in the media 
calling for Fitzgibbon's head.  Fitzgibbon's weak 
parliamentary performance and his inability to obtain 
information from ADOD have highlighted tensions between the 
Minister and the Defence bureaucracy.  Fitzgibbon, an early 
supporter of Prime Minister Kevin Rudd and close to Deputy 
Prime Minister Julia Gillard, will likely survive this 
incident, however, at least through the delivery of the 
Defense white paper and the AUSMIN consultations, both 
scheduled for April.  END SUMMARY 
 
SAS PAY PACKETS REDUCED TO ZERO 
 
¶2. (SBU) During Parliamentary Question Time on February 24, 
25, and 26, Fitzgibbon was questioned repeatedly about a 
salary mixup in which ADOD apparently deducted the entire net 
pay of SAS soldiers fighting in Afghanistan.  The situation 
began in 2007 when a Defence Tribunal found that some SAS 
personnel had received extra allowances to which they were 
not entitled.  ADOD began recouping the allowances through 
payroll deductions that the Opposition claimed reduced some 
salary payments to zero.  Responding in Parliament, 
Fitzgibbon looked uncomfortable and defensive, spending most 
of his time criticizing his own department for failing to 
respond to his requests.  Opposition Leader Malcolm Turnbull 
called for his sacking and initiated a censure motion 
(handily defeated by the governing majority.)  On February 
27, Fitzgibbon claimed the Opposition had misread the 
payslips central to its claims of zero payment.  When asked 
specifically how many SAS were affected by the allowance 
deduction and how much money had been deducted from their 
pay, Fitzgibbon replied: "I can't give that figure because 
Defence can't give it to me." 
 
¶3. (U) Outside of Parliament, Fitzgibbon told the media he 
had learned of the situation in October 2008, and had ordered 
ADOD to cease all debt recovery action.  Last week, however, 
when some SAS families came forward to complain that the 
allowances were still being deducted from their pay packets, 
Fitzgibbon admitted that he could not give absolute assurance 
that all debt recovery action had ceased.  On Sunday, March 
1, the Minister announced that he had directed ADOD to hire 
an independent auditing firm to examine salary payment to all 
special forces so that he could "finally determine once and 
for all what's going on." 
 
WHO RUNS DEFENCE? 
 
¶4. (U) Fitzgibbon's lament that he could not get any action 
or answers from ADOD is not the first complaint from a 
defense minister about the bureaucracy his is charged with 
overseeing.  Former Howard Defence Minister Brendan Nelson 
Qoverseeing.  Former Howard Defence Minister Brendan Nelson 
was reported only last month as saying that "I think its fair 
to say that at times the uniformed side of Defence finds it 
difficult to respond to directives that come from civilians 
in the form of the government and minister of the day." 
Since becoming Defence Minister in December 2007, Fitzgibbon 
has clashed with Defence over the timetable for release of 
the White Paper and the embedding of journalists with 
Australian troops in Afghanistan.  Apparently, Defence has 
refused to give the Minister's office the raw responses of 
journalists who responded to a survey of ADOD's media policy. 
 Last September, Fitzgibbon defended Australian troops over 
allegations that Taliban prisoners had been kept in "dog 
pens."  Days later it emerged that a "dog pen" was the 
soldiers' nickname for makeshift enclosures. 
 
WHERE IS THE CIVILIAN DEFENCE SECRETARY? 
 
¶5. (U) Like the U.S. Department of Defense, ADOD has a 
civilian bureaucracy, headed by Secretary Nick Warner, an 
appointee of former Prime Minister John Howard.  Warner, a 
former diplomat with limited defense experience, is viewed as 
a weak actor in ADOD and was nowhere to be seen during the 
payroll controversy.  Ideally, ADOD is run by two CEOs: the 
Secretary and the Chief of the Defence Force (CDF).  In 
recent years, according to the media, the CDF has become the 
stronger voice within Defence and the civilian side has 
withered.  This has remained true under current CDF Air Chief 
Marshal Angus Houston, a Howard appointee who was extended 
for another three-year term after Rudd came into office. 
Former Defence Minister and former Australian Labor Party 
(ALP) Leader Kim Beazley recently noted "the downgrade of the 
policy-making capacity of civilians in Defence is crippling." 
 
COMMENT 
 
¶6. (C/NF) One media report described Fitzgibbon as being 
"helpless" in dealing with the situation, and many thought 
his performance in Parliament was inadequate, including some 
of his fellow ALP MPs.  It is widely assumed that Fitzgibbon, 
a former auto repair shop owner with only a brief stint as 
Shadow Defence Minister before assuming his present role, got 
his job because he was one of Rudd's early supporters in the 
ALP leadership contest with Kim Beazley.  While he has proven 
himself able to master the external elements of his job, he 
appears to have little appetite for detail, and he may be 
somewhat out of his depth in this job.  Fitzgibbon's 
combative, partisan political style and frequent criticism of 
the previous administration's conduct of defense matters have 
rankled the ADOD establishment, and doubtless have 
contributed to his communications problem within the Defence 
establishment.  Another problem for Fitzgibbon may be the 
inexperience of his ministerial staff.  After the departure 
of his respected first chief of staff, Dan Cotterill, late 
last year, Fitzgibbon elevated 30-year-old Deputy COS Davina 
Langton to replace Cotterill.  Langton came to the job with 
no prior experience working in Parliament or on defense 
issues. 
 
¶7. (C/NF)  Fitzgibbon's job is likely safe for now.  He still 
appears to have the backing of the Prime Minister and the 
support of Deputy Prime Minister Julia Gillard.  Rudd would 
be unlikely to sack Fitzgibbon before the upcoming release of 
the Defence White Paper and the AUSMIN consultations in 
Washington.  Importantly for Rudd, no doubt, Fitzgibbon has 
been able to engage with his U.S. counterpart, Secretary 
Gates, in support of his administration's number one 
priority: the U.S. Alliance.  Rudd is said to be "livid" with 
the military chiefs over this issue, however, and if any 
heads roll, it will likely be from within ADOD. 
Nevertheless, Fitzgibbon is not out of the woods yet; Rudd's 
decision last week to add to Fitzgibbon's responsibility the 
complex defense acquisition portfolio previously managed by 
Parliamentary Secretary Greg Combet opens up new 
opportunities for Fitzgibbon to make a costly, high-profile 
mistake that may again call into question his fitness for the 
job. 
 
CLUNE