The Defence Portfolio
Briefing to the Incoming Government 2002
Capability
A Modern, Sustainable Defence Force
On 8 May 2001 the Government announced a series of decisions that built on the DPF with the aim of developing a modern, sustainable Defence Force that will concentrate defence resources in a range of affordable and sustainable military capabilities to meet our requirements, strategic interests, and obligations.
The 8 May statement described the key components of the NZDF as being:
- A joint approach, structure and operational orientation;
- A modernised Army;
- A practical Navy fleet matched to New Zealand's wider security needs;
- A refocused and updated Air Force; and
- A funding commitment to provide financial certainty.
The first stage of a joint approach was the establishment of Headquarters Joint Forces New Zealand last year at Trentham. The Headquarters is now firmly established and fully operational. The next stage in the process is to reflect a joint approach to planning and to managing the NZDF and the Ministry at the strategic level. The Hunn review on the accountabilities and structural arrangements between the Ministry and the NZDF, which should be completed soon, may make recommendations to this effect.
The modernisation of the Army is being progressed with the acquisition of light armoured and light operational vehicles. New weapons, an intelligence, surveillance and reconnaissance capability, and support vehicles and equipment will round out the Army's capability. This is based on a structure of two infantry battalions within a brigade framework and provides a capacity to deploy and sustain a 600-900 personnel commitment for a year or 900-1200 personnel for six months.
A practical Navy is being developed through the proposed acquisition of a new multi-role vessel and patrol vessels. The Navy requires the capability to undertake an extensive array of military and non-military tasks in a variety of environmental conditions in order to meet the Government's policy objectives.
Following the disbandment of the air combat force in December 2001 the Air Force is being refocused and updated to ensure that it is fully equipped to meet current policy objectives. This will include projects to either upgrade or replace all of the aircraft in the Air Force: P-3 Orions, C-130 Hercules, Boeing 727s and Iroquois helicopters.
Long-Term Development Plan
The LTDP, released on 11 June 2002, is a planning tool to enable decisions on defence acquisitions to be taken in the context of current defence policy, the priority of projects, and affordability. The Plan links defence policy objectives with the capability requirements announced in the 8 May 2001 statement. The LTDP contains a comprehensive list of major projects (projects over $7m), with preliminary costing, timings, and priorities. It will be updated regularly. Defence is now developing planning and decision-making processes which will incorporate management of both operational and financial risks to ensure that investment in defence provides best value for money.
The LTDP will be managed within approved financial parameters. These are:
- Up to $1 billion, in nominal terms, in capital injections over the next 10 years, which with depreciation will exceed $2 billion in available funding;
- Current operating baselines set to 2005/06 with adjustments for unfunded depreciation thereafter;
- Any inflationary pressure to be managed within these constraints until 2005/06; and
- Leasing options may be considered where there is a neutral trade-off between capital and operating expenditure.
The LTDP does not give Defence authority to proceed with any of the projects. Every project will be brought forward for approval and will be judged in the context of the Government's defence policy, the priority of that project in terms of the LTDP and the affordability of that project within the overall context of the LTDP. The approved financial cap does not include those projects that are already funded: light armoured vehicles, Seasprite naval helicopters, and Army radios.
LTDP projects have been prioritised and categorised to reflect their relationship to meet current defence policy objectives. The list below does not indicate the order in which projects will be initiated or completed as some projects will not need to be completed until the end of the decade.
Projects Approved in Principle by Government
Light Operational Vehicles
Multi-role Vessel
Patrol Vessels
Ohakea Runway Reconstruction
Projects Necessary to Avoid the Failure of Policy
P-3 Mission Systems Upgrade
C-130 Replacement/Upgrade
C-130/P-3 Communications/Navigation Systems Upgrades
Boeing 727 Replacement
NZDF Helicopter Capability
Special Operations Capability
Joint Command and Control System
Projects Necessary to Provide a Well Equipped Land Force
Direct Fire Support Weapon Area
Medium Range Anti-armour Weapon
Land Intelligence/Surveillance/Reconnaissance
Army Tactical Trunk Communications
Combat Service Support Vehicles
Army Engineering Equipment
Army In-Service Weapon Replacement
Very Low Level Air Defence
Projects Necessary to Avoid Significant Risks to Policy
ANZAC Self-defence Upgrade
NZDF Torpedo Replacement
C-130/P-3 Self-protection
Anti-ship Missiles
Joint Communications Modernisation
Whenuapai Runway Reconstruction
Whenuapai Hardstanding Reconstruction
Ohakea Hardstanding Reconstruction
Projects that have Benefit but are Less Critical to Achieving Policy Objectives
High Readiness Infantry Company
Short Range Air Patrol
Modifications to enable MRV/OPV to operate in the Ross Sea
Remote Mine Detection
Army Manoeuvre Range
Indirect Fire Support Weapon
Infrastructure Projects
Funding constraints, cash flow management and defence industry considerations will affect priorities, timing and the overall affordability of the LTDP. Trade-offs within and between projects will be necessary.
By changing levels of capability, cost and policy compliance it is possible to identify options within projects. These options, which will be investigated for each project, could include phasing projects to spread the cash flow or reducing the size and/or scope of a project. Reducing the level of capability could affect the NZDF's ability to deliver outputs designed to achieve policy objectives.
In order to provide more robust decision-making information, the process by which costings for acquisition projects is developed is being reviewed.
High Priority Capability Projects
The light operational vehicle (LOV) project will provide the Army with modern vehicles to replace the obsolete fleet of landrovers. The LOV provides an essential capability to enable the Army to participate in operations in the South Pacific, Asia-Pacific and globally. Acquisition has been approved in principle and the tender process is underway. The programme is for the purchase of 321 vehicles. The Government will be asked later this year to make final decisions based on the tender process.
The purchase of a multi-role vessel (MRV) to provide tactical sealift for the NZDF will enable the Navy to support disaster relief and peace support operations, to conduct resource protection patrols, and to provide diplomatic/military presence. The vessel will replace HMNZS Canterbury and also be used for training. The acquisition of patrol vessels will enable the Navy to meet inshore and offshore requirements for maritime surface surveillance in New Zealand's EEZ and the South Pacific. Patrol vessels will meet many government agencies' needs, including those of the Ministry of Fisheries, the New Zealand Customs Service, the Department of Conservation, the Police, and the Maritime Safety Authority. The Ministry, in consultation with the NZDF and other appropriate agencies, is developing functional descriptions of the capabilities required for the MRV and patrol vessels for distribution to industry. This work includes the preparation of Registration-of-Interest and Requests-for-Proposals documentation. Final decisions on fleet composition will be taken by the Government after proposals from industry have been evaluated later this year.
The capability provided by the P-3 Orions is central to meeting a broad range of civilian roles and tasks and the Government's five defence policy objectives. The P-3 undertakes surveillance of New Zealand's EEZ and the Southern Ocean, meets our South Pacific search and rescue obligations, and provides surveillance assistance to Pacific Island countries. It is one of the primary force elements contributing to our defence relationships with Australia and FPDA partners. The obsolescent mission systems onboard the P-3 Orion are limiting the aircrafts' availability due to repeated equipment failures. An upgrade of the mission systems will enable the P-3 Orions to reliably conduct surface surveillance tasks. Options for upgrading the P-3 Orions' sensors and mission management systems are being developed. An extensive consultation process has been undertaken with the principal agencies responsible for New Zealand's maritime security.
Air transport is a critical capability for a number of roles and tasks, including: supporting counter-terrorist operations; peace support operations; evacuations of New Zealanders from trouble spots; disaster relief and humanitarian operations; supporting the civil power; and supporting New Zealand's Antarctic programme. A review will be completed on New Zealand's defence policy requirements for air transport by October 2002. This review will guide decisions on the upgrade or replacement of the C-130 Hercules (New Zealand must decide by the end of December 2002 if it wants to join Australia in purchasing new C-130Js) and suitable commercial jet aircraft to replace the Boeing 727s.
Helicopters provide essential support for land operations, particularly in the Pacific Islands and in peace support operations, are important for supporting counter-terrorist incidents in New Zealand, and are able to provide a range of support functions within New Zealand and the South Pacific such as search and rescue and disaster relief. A statement of requirement has been produced that identifies the capability needed to meet traditional NZDF requirements and those of other users. Defence will bring forward a paper by the end of the year seeking ministerial approval to canvass industry for proposals for replacement of the Iroquois and Sioux helicopters. Options may include purchase, lease or (in the case of training aircraft) contracted services.
The joint command and control system project is a programme to implement an automated command and control system for the NZDF. Joint command and control is an enabling capability for all of the policy roles and tasks required of the NZDF ensuring all three services can work together efficiently and effectively by enhancing decision-making processes. The Ministry is currently tendering for the delivery of a Project Definition Study. This study will involve a suitably qualified consultant reviewing current command and control systems within the NZDF, investigating the future direction of joint command and control with special reference to our friends and allies, and determining a way forward.
An upgrade of the Ohakea runway is essential for Ohakea to continue as an operational base and to support an increase in air traffic. Restrictions on large aircraft operations at Ohakea impact on the ability of the Army to deploy, and restrict other air capabilities from meeting their policy objectives. A tender process is underway to identify the most suitable contractor to undertake the reconstruction work on the runway. Tender responses are expected back by the end of August 2002. Reconstruction of the Ohakea runway is scheduled for early 2003.
Military Capability
Military Capability is the ability to achieve a specified military objective. The major components of military capability are force structure and preparedness. Force structure, which is the quantitative dimension of NZDF Outputs, comprises personnel and equipment. Preparedness, which is the qualitative dimension of NZDF Outputs, is the ability to undertake military tasks and is specified in terms of readiness, combat viability, deployability and sustainability. The relationship between force structure and preparedness is shown in the following diagram:
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Under the Purchase Agreement between the Minister and the CDF, all operational NZDF force elements (operational units or forces composed of elements of operational units) are required to maintain a Directed Level of Capability (DLOC). In the Purchase Agreement Employment Contexts (ECs) identify security events that would pose a threat to New Zealand's national security outcomes, and for which the Government may expect a military response. The ECs provide guidance to determine the Operational Level of Capability (OLOC) required to effectively conduct such military tasks. The Operational Preparedness Reporting System (OPRES) is the NZDF performance measurement system that routinely reports the preparedness level of force elements against their DLOC; the key measurement areas for OPRES being readiness, combat viability, deployability and sustainability. Because of the relatively high cost of maintaining OLOC, the NZDF is funded to routinely maintain DLOC, with an agreed time (known as Response Time) to build forces up to OLOC.
Defence Planning System
The shared military and civilian nature of the defence function means that many strategic-level results require contributions from both the NZDF and the Ministry. The Defence Planning System (DPS) is the documentation of Defence's strategic management and planning process, covering all strategic management actions and results. The Chief Executives launched a project in July 2001 to review the existing DPS processes and simplify and fully document them, where required. Progress on this project is currently on hold until an assessment of the implications of the Hunn Review can be made.
