Reports and Publications

• Defence Capability and Resourcing Review (DCARR)
  • Contents
  • Executive Summary
  • PART 1 - Background
  • PART 2 - The Operating Environment
  • PART 3 - The Condition of the NZDF and Ministry of Defence
  • PART 4 - Capability Gaps, Funding Options and Implementation
  • PART 5 - Conclusions and Recommendations
  • Appendix 2: Distribution of Increased Appropriation in First Five Years

Final Report
Defence Capability and Resourcing Review (DCARR)

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Executive Summary

1. In December 2003, the Ministers of Defence, Finance and State Services commissioned an assessment of the optimum capability configuration and resource requirements of the NZDF to undertake the roles and tasks set out in the government's statements of defence policy, and in the Defence Long-Term Development Plan (LTDP). The assessment was also to examine the capability of the Ministry of Defence to support government policy processes.
2. This report presents the findings of the Defence Capability and Resourcing Review (DCARR), which was undertaken by a multi-agency team during 2004. It identifies the key issues that the NZDF and Ministry of Defence face in delivering the capability outcomes that are required by the government. It further identifies options by which the NZDF's operations may be configured to deliver on the required capability, and addresses in broad terms the additional resources that may be required to achieve the desired outcomes.
3. DCARR concluded that as a result of many years of under-investment, and notwithstanding the implementation of the LTDP, capacity and capability in some areas is below the requirements of government policy:
   1. personnel numbers in the three services, Headquarters NZDF, and Headquarters Joint Forces New Zealand are below the levels required, and cannot be rapidly increased to the required levels;
   2. in some trades the number of personnel and their trained state is deficient;
   3. some major weapons platforms require upgrading or replacement, although the LTDP will address this;
   4. some military equipment (other than major weapons platforms) no longer meets the required standard;
   5. contingency reserve stocks (ammunition, fuel, and spares) are depleted;
   6. there is a backlog of maintenance and capital expenditure in the Defence Estate, which cannot be addressed fully in the short term; and
   7. aspects of corporate management capability are depleted.

4. There are a number of reasons for the capability gaps. The most significant were:

   1. a prolonged period of fiscal constraint throughout the 1990s;

   2. a higher operational tempo since 1998;

   3. equipment continuing in service beyond its economic life;

   4. a strong labour market affecting the ability to recruit and retain key personnel; and

   5. a reduction in NZDF Headquarters and support capabilities due to the high and prolonged operational tempo.
5. DCARR nevertheless determined that it is possible to maintain the present operational tempo (the combination of what capability is delivered, and how much) while the NZDF builds it's capability to the levels required by government within the constraints of the pace at which capability can practically be regenerated, future planned upgrades and the likely available future funding. Doing so will require a recovery programme spread over several years.
6. In line with Ministerial guidance, senior NZDF, Ministry of Defence and Treasury officials worked with the DCARR to develop a ten year Defence Funding Package (DFP) that DCARR considers will enable the NZDF and Ministry of Defence to build capability to the level required.
7. The detail of the DFP, together with the NZDF's proposals for the implementation and monitoring of the recovery plan, should be addressed as part of the FY 2005/06 Budget Round. A proposal in respect of the DFP will be placed before Cabinet in February 2005.

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