Reports and Publications

• Air Combat Review
  • Contents
  • Summary
  • Introduction
  • The Setting for the Review
  • The Air Combat Force
  • Description of the Options
  • The Strategic and Foreign Policy Implications
  • Military Operational Implications
  • Financial Implications
  • Conclusions
  • Annex A – Defence Policy Objectives
  • Annex B – Costing Assumptions
  • Glossary

Within this section

• Strategic Setting
• Security Implications
• The Financial Setting

Review of the Options for an Air Combat Capability
(February 2001)

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The Setting for the Review

Strategic Setting

1. New Zealand’s view of the strategic setting over the next five years was set out in the Strategic Assessment 2000 undertaken by the External Assessment Bureau.
   • New Zealand is unlikely to be directly threatened by any other country or be involved in widespread armed conflict. The strategic environment in the Asia-Pacific region, however, contains a number of challenges:
     • Global competition for marine resources;
     • Problems arising from weak governments in the region; and
     • Challenges to, or shifts in, the balance of power in the region.
   • Australia plays a unique role in New Zealand’s security. As a prosperous and benign neighbour, it makes a major contribution to the stability of New Zealand’s immediate region.
   • In the wider world the multilateral system for managing international peace and security issues of crucial importance to New Zealand are in a reasonable state.
   • Inter-state conflict is increasingly rare but conflict resulting from communal tensions (linguistic, racial or religious) within states is all too common. The international community may be drawn into such conflicts because they are seen to pose a wider threat to international peace and security.

Security Implications

2. The implications of this strategic setting were addressed in the MFAT publication, New Zealand’s Foreign Policy and Security Challenges, released at the same time as the DPF. It stated that the key tests for defence resourcing and capability decisions should be:
   • the ability to perform core ‘sovereignty’ tasks around New Zealand;
   • capabilities that allow an effective response to a variety of emergencies in the South Pacific;
   • the capacity to play a constructive role in security relationships and processes in the Asia-Pacific region;
   • capabilities that allow New Zealand to make an effective military contribution to multilateral coalition responses in the region or further afield, noting that some, including peacekeeping, may involve a high level of risk; and
   • the ability to work effectively with others, in particular, the Australians.
3. The document went on to elaborate on some of the points of reference for developing future NZDF capabilities.
   • In the absence of a direct threat to New Zealand’s security, it is likely that contributions to collective security efforts, including peacekeeping, under UN auspices will remain a primary role for the NZDF – and a principal point of reference for force development.
   • Army capabilities and associated naval and air support, including maritime surveillance, would form the core of a New Zealand response in most plausible South Pacific scenarios.
   • Although it is possible that New Zealand would again face a decision to commit forces to a combat role in Asia, it is not easy to envisage a situation where a New Zealand government would do so. This limits the value of scenarios involving war in Asia as a point of reference for the development of the NZDF’s force structure.
   • The capabilities New Zealand can maintain at current funding levels will not be a major factor in regional military calculations, but they are useful in the context of the Five Power Defence Arrangements (FPDA) and the ASEAN Regional Forum.
   • New Zealand is more likely to participate where there is a peacekeeping role, rather than a requirement to impose peace. Capabilities would not be developed specifically for a role in the region; rather participation would be based on capabilities developed for the NZDF’s full spectrum of roles and tasks.

The Financial Setting

4. It is the DPMC/Treasury view that given competing priorities, it is unlikely the Government will be able to afford to commit significant amounts of additional expenditure on defence in the near future. While Defence is recognised as a capital-intensive area, often the operating costs are the main constraint on spending.
5. Current NZDF baseline funding is insufficient to retain the current set of outputs and capabilities in either the short or long term. The Government has recently allocated an additional $25 million to cover anticipated shortfalls this financial year, and the air combat force has already been reduced to a basic level of capability [reduced readiness, training and maintenance] as a cost cutting measure. Next year a shortfall of $95 million in baseline funding is predicted, excluding the cost of the East Timor deployment and pay increases.
6. The short and long term budget constraints mean that current and future investment in Defence needs to be prioritised. Future investment in defence will need to be targeted at those capabilities that are of highest utility to deliver the best value for money at an acceptable level of risk.

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