Defence Portfolio
Briefing to the Incoming Government 2005
Capability
A Modern, Sustainable Defence Force
On 8 May 2001 the Government announced a series of decisions that built on its Defence Policy Framework 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 national 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.
- A funding commitment to provide financial certainty.
The first stage of a joint approach was the establishment of Headquarters Joint Forces New Zealand in 2001 at Trentham. This operational-level Headquarters is now firmly established and fully functional. As a result of the Hunn review on the accountabilities and structural arrangements between the Ministry and the NZDF, which the Government endorsed in March 2003, this joint approach is also being applied to defence planning at the strategic level and to managing the NZDF and the Ministry of Defence at the organisational level. This "jointness" is being achieved through reinforcing and cementing existing initiatives designed to support cooperation and collaboration between the two defence organisations.
The modernisation of the Army is underway with the acquisition of 105 light armoured and 321 light operational vehicles almost complete. New weapons, new communications equipment, intelligence, surveillance and reconnaissance capability, and support vehicles and equipment round out the Army's capability. The Army Configuration Review is examining the structure of the Army to better deliver the required outputs of a sustained battalion group (of around a thousand personnel) including the lessons of the Timor Leste deployment, current military trends and the opportunities that technology will offer land forces.
Through the acquisition of a new multi-role vessel and deep water and inshore patrol vessels to augment the two ANZAC frigates, the development of an enhanced Navy is underway. 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.
The Air Force is being refocused and updated to ensure that it is fully equipped to meet policy objectives. Two Boeing 757 aircraft have been acquired and two additional King Air training aircraft have been added to the Royal New Zealand Air Force fleet. Projects to upgrade or replace the Air Force's P-3 Orions, C-130 Hercules, and Iroquois and Sioux helicopters, are underway.
Long-term Development Plan
The Defence Long-term Development Plan, or LTDP (released on 11 June 2002 and updated in June 2003 and November 2004), is a planning tool to enable decisions on defence acquisitions to be taken in the context of current policy, relative priority, and affordability. The Plan, which links defence policy objectives with capability requirements in the 2001 Defence Statement, contains a comprehensive list of major projects (projects over $7 million), with preliminary costings, timings, and priorities.
The Government directed in 2002 that the LTDP be managed within three financial parameters:
- up to one billion dollars, in nominal terms, in capital injections over 10 years, which, with retained depreciation, will provide at least three billion dollars for new acquisitions;
- any inflationary pressure to be managed within these constraints until 2005/06;
- 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 set out in the Plan. Each project (which is managed through The Capability Management Framework) is brought forward for individual approval and is judged in the context of the Government's defence policy, and its priority and affordability.
LTDP projects have been prioritised and categorised to reflect their relationship to current defence policy objectives. The list below, which reflects the current status of LTDP projects, does not indicate the order in which projects have been initiated, or will be completed, as some projects extend beyond the end of the decade.
Projects Approved and in Acquisition Phase
New Defence Headquarters Building (NZDF)
Multi-role Vessel (Navy)
Offshore and Inshore Patrol Vessels (Navy)
Medium Range Anti-armour Weapon (Army)
Very Low Level Air Defence Cueing System (Army)
Light Operational Vehicle (Army)
Special Operations Equipment (Army)
Improvised Explosive Device Disposal (NZDF)
Boeing 757 Modification (Air Force)
P-3 Mission Systems Upgrade (Air Force)
P-3 Communication and Navigation Systems Upgrade (Air Force)
C-130 Life Extension (Air Force)
C-130 Communication and Navigation Systems Upgrade (Air Force)
Projects Approved in Principle by Government
Joint Command and Control System (NZDF)
Direct Fire Support Weapon - Area (Army)
Army Engineering Equipment (Army)
NZDF Helicopter Capability (Air Force)
Ohakea Consolidation (Air Force)
Projects Necessary to Provide a Well-Equipped Land Force
Land Intelligence, Surveillance, and Reconnaissance Equipment (Army)
Combat Service Support Vehicles (Army)
Army Tactical Trunk Communications (Army)
Army In-service Weapon Replacement (Army)
General Service Vehicle Fleet Replacement (Army)
Projects Necessary to Avoid Significant Risks to Policy
Joint Communications Modernisation (NZDF)
ANZAC Self-Defence Upgrade (Navy)
NZDF Torpedo Replacement (Navy)
C-130 Self-Protection (Air Force)
P-3 Self-Protection (Air Force)
Anti-Ship Missiles (Air Force)
Projects That Have Benefit But Are Less Critical To Achieving Policy Objectives
Infrastructure Projects (NZDF)
Remote Mine Detection (Navy)
High Readiness Infantry Company (Army)
Army Manoeuvre Range (Army)
Indirect Fire Support Weapon (Army)
Short to Medium Range Aerial Surveillance (Air Force)
Funding constraints, cash flow management and defence industry considerations continue to affect priorities, timing and the overall affordability of the LTDP.
Trade-offs in and among projects are often necessary and are achieved by creating options through altering levels of cost, and in ensuring compliance with policy. These options, which are investigated for each project, have included 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.
The 2005 LTDP
Aside from updates in 2003 and 2004 there has been no major change to the LTDP in terms of projects, their priority, or the time span of the LTDP (currently 2012). Accordingly, Defence has undertaken a major review of the LTDP both in terms of projects currently on the LTDP, but not yet substantially advanced, and new projects proposed for inclusion in the new LTDP, which would go out to 2015. A report will be submitted to you soon.
The Defence Sustainability Initiative
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 LTDP. The assessment, the Defence Capability and Resourcing Review (DCARR), also examined the capability of the Ministry of Defence to support government policy processes.
The 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:
- 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.
- In some trades the number of personnel and their trained state is deficient.
Some major weapons platforms require upgrading or replacement, although the LTDP will address this. - Some military equipment (other than major weapons platforms) no longer meets the required standard.
- Contingency reserve stocks (ammunition, fuel, and spares) are depleted.
- There is a backlog of maintenance and capital expenditure in the Defence Estate, which cannot be addressed fully in the short term; and aspects of corporate management capability are depleted.
In response to the DCARR, Cabinet agreed in 2005 to a 10-year funding package under the Defence Sustainability Initiative (DSI) to develop military and organisational capability to a level that will ensure the Government's defence goals are met on a sustainable basis. The DSI will provide additional operating expenditure totaling $4.348 billion and a further capital injection of $209 million over the 10-year period from FY 2005/06.
The DSI is directed initially towards recovery of personnel levels, recruitment and retention, putting new and upgraded capabilities into service, and strengthening the organisational and corporate capability of the Ministry of Defence and HQ NZDF.
A DSI programme team was established in HQ NZDF in March 2005 to address the organisational issues. The programme is to achieve its objectives by 30 June 2006. The programme is governed by an interdepartmental steering group chaired by the Chief of Defence Force and comprises of senior representatives from the Treasury, State Services Commission, Department of Prime Minister and Cabinet, and the Ministry of Defence.
The DSI programme deliverables include:
- An initial scoping phase report submitted to Joint Ministers in June 2005 on the key planning and performance management requirements and how the necessary structures and systems will be implemented.
- An Interim Strategic Plan for the NZDF submitted to the Minister of Defence on 30 June 2005 for endorsement.
- A progress report to Ministers by November 2005 on the development of the planning and performance management systems to support the budget initiatives process for 2006/07.
- Systems changes implemented by June 2006 including:
- The NZDF Corporate Planning Framework and Corporate Performance Management System.
- The NZDF Corporate Planning Branch and Programme Management Office.
- Improved systems and processes fully integrated into the Defence organisations' mainstream processes.
The Capability Management Framework
The Capability Management Framework (CMF) is the mechanism which guides the NZDF and Ministry of Defence in capability matters. Projects in the LTDP are expected to be progressed using the CMF. It provides guidance on responsibility, accountability and processes for policy development, capability definition and the acquisition, and through life support, of major capability platforms. The CMF also covers the disposal of capability platforms. This is primarily a responsibility of the Chief of Defence Force, and one which is routinely delegated to the Service concerned. The NZDF currently has plans for the disposal of a number of major assets over the next five years. These include: HMNZS CANTERBURY, the M113 Armoured Personnel Carrier and Landrover fleets, and the Iroquois helicopter fleet.
In July 2005 a comprehensive review of the CMF commenced. This review, which received submissions internally and from central government agencies, has determined that although the concept of the CMF is sound there is re-engineering required to address the acquisition of all capability, not just equipment and systems, as is the current focus. Processes also need clarifying.
Military Capability
Military capability is the power to achieve a desired operational effect in a selected environment, and to sustain that effect for a designated period. It is the combined effect that systems of inputs have in helping to achieve a particular operational result. Military capability goes beyond just equipment. Rather, it includes all necessary components that, together, enable a military capability to achieve an operational effect. The major components of military capability are:
Force structure - the quantitative dimension of NZDF Outputs comprises personnel and equipment; and
Preparedness - the qualitative dimension of NZDF Outputs is the ability to undertake military tasks. Preparedness is specified in terms of readiness, combat viability, deployability and sustainability.
The relationship between force structure and preparedness is shown in the following diagram:
Relationship: Force Structure and Preparedness
View text equivalent of above image.
Under the NZDF Output Plan between the Minister and the Chief of Defence Force, all 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 Output Plan, Employment Contexts (ECs) identify security events that would pose a threat to New Zealand's defence 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 are 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.
Rebuilding the New Zealand Defence Force
Modernising the Army
Light Armoured Vehicles
The light armoured vehicle (LAV) project, which replaced the fleet of M113 Armoured Personnel Carriers, provided the Army with a family of wheeled armoured vehicles for use in support of infantry. Purchased from General Dynamics Land Systems, Canada, the vehicles are intended to provide protected mobility for infantry manoeuvre groups in combat or when undertaking peace support operations.
Of the 105 vehicles that have been purchased, 104 have been delivered. One vehicle remains in Canada for test fitting of add-on armour and as a reference model for technical modifications and fault identification. Contracted training has been completed, and 95% of ordered spare parts have been delivered.
A LAV Company Group (of around sixteen LAVs) was declared to be at "Directed Level of Capability" (DLOC) in December 2004 and a Battalion Group is on track to be at DLOC by December 2005.
Light Operational Vehicles
The light operational vehicle (LOV) project is providing the Army with modern vehicles to replace the obsolete fleet of Landrovers. This project involves the acquisition of 321 Pinzgauer vehicles from Automotive Technik Ltd, United Kingdom, in nine variants. The LOV provides an essential capability to enable the Army to participate in operations in the South Pacific, the Asia-Pacific region, and globally.
The Crown has accepted all of the 188 vehicles of the first tranche. There have been some difficulties with acceptance of the fleet but most of these vehicles have now been issued to the Army and are in use. Production of the second tranche of 133 vehicles is progressing well. All non-armoured variants have been produced and are either in New Zealand or in transit to New Zealand. The first of 60 armoured variants was handed over on 6 September 2005 and all vehicles will be delivered by the end of April 2006.
Very Low Level Air Defence
This project involves the purchase of an alerting and cueing system to bring the Army's Mistral air defence system up to operational standard. An air defence capability is necessary to protect critical land force elements from air threats such as low flying aircraft and armed helicopters. A contract has been signed with a Spanish company, Indra, for the supply of radar systems, and a separate contract has been entered into with Thales France for the supply of identification friend or foe equipment. Delivery is expected in mid 2006.
Medium Range Anti-Armour Weapon
The Javelin missile project will provide protection for New Zealand's land forces from armoured threats by procuring a medium-range anti-armour weapon (MRAAW) manufactured by Raytheon/Lockheed Martin Joint Venture. A contract was signed in December 2003 and deliveries should be completed by July 2006.
Direct Fire Support Weapon - Area
The direct fire support weapon - area (DFSW-A) project, which involves the purchase of 40mm grenade launchers, will provide land forces with the ability to engage opposing forces at a range of up to two kilometres. The DFSW-A forms an element of land force contribution to peace enforcement operations where land forces may face a threat on the ground.
Tactical Communications
This project, which is almost complete, covers the replacement of the complete range of tactical radios used by the Army and supporting Air Force units. It includes portable radios and various configurations of vehicle communications systems. The radios include integrated communications security, and are interoperable with our security partners.
Enhancing the Navy
A multi-role vessel (MRV), two offshore patrol vessels (OPVs) and four inshore patrol vessels (IPVs) are being acquired under Project Protector. The MRV will enable the Navy to transport the new Army LAVs and LOVs, and associated personnel and equipment, to support disaster relief and peace support operations. The MRV will also be able to conduct resource protection patrols, and provide diplomatic/military presence. The MRV will be used for training, a role previously undertaken by the frigate HMNZS CANTERBURY.
The OPVs and IPVs 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 service the needs of several government agencies including the Ministry of Fisheries, the New Zealand Customs Service, the Department of Conservation, the Police, and Maritime New Zealand.
Six companies, selected from a registration of interest process, received the Project Protector request for proposal in May 2003 and responses were required in October 2003. An evaluation of the proposals from the six short-listed companies was completed in March 2004, and the preferred tenderer was announced in April 2004. A contract was signed in July 2004 with the preferred tenderer, Tenix Defence Pty Limited. The MRV is expected to be delivered in late 2006, the first OPV in mid-2006, and the first IPV in late 2006.
Refocusing and Upgrading the Air Force
Maritime Surveillance Aircraft
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 South Pacific states. 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 Orions 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 as will the upgrade of the communication and navigation systems.
Following a tender process a contract was signed with L-3 Communications Integrated Systems in 2004 for the upgrade of the P-3 Orions' mission systems and communication and navigation systems. The project is now underway at L-3's site in Texas.
Fixed Wing Transport
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. In order to ensure the ongoing sustainability of the NZDF's air transport capability, an upgrade of the C-130H Hercules has commenced. Two Boeing 757 aircraft will be modified to enhance their capability.
C-130 Life Extension and Communications/Navigation Systems Upgrade: The declining availability of C-130 air transport presents a major capability gap that will increasingly impinge on the NZDF's ability to deploy and support personnel, particularly in the New Zealand, South Pacific and Asia-Pacific contexts. The ability to support deployments and perform other tasks would also be affected. The C-130 communications and navigation systems also need to be upgraded to address equipment obsolescence and comply with evolving international air traffic regulations.
Following a tender process a contract was signed with L-3 Spar Aerospace (the same parent company as L-3 Communications Integrated Systems) for the upgrade of the C-130 Hercules' mission systems and communication and navigation systems. The project is now well underway at L-3's site in Edmonton, Canada.
Boeing 757 Purchase and Modifications: The B757 aircraft began service in the Air Force in 2003. A modification programme, including freight capability, engine enhancements and upgraded communications and navigation equipment, is being undertaken to configure the aircraft to meet the strategic airlift capability required by the NZDF. The modification program is expected to start next year.
Helicopter Replacement Project
Helicopters provide essential support for land operations, particularly in the South Pacific and in peace support operations. Following a tender process, the Government agreed in April 2005 that NH Industries' helicopter, the NH90, was the preferred medium utility helicopter to replace the Iroquois. The Ministry of Defence is currently obtaining information about the cost, assembly location, timing, and logistic support in respect of the NH90 before reporting to Cabinet with firm proposals.
As well as proposals for the NH90, Cabinet will be advised concurrently of the results of an invitation to register process for the training/ light utility helicopter to replace the Sioux. Cabinet approval will be sought next year for a total helicopter package including numbers, timing, through-life support, operation, and acquisition strategy.
Ohakea: Upgrade and Consolidation
In November 2002, the Government agreed to the consolidation of the Air Force operational capability at Ohakea. The consolidated base will be a core enabler for all Air Force operations. In order to accommodate the personnel and functions transferring from Whenuapai, Ohakea will require extensive improvements to existing infrastructure as well as additional buildings. No. 3 Squadron (helicopters) transferred to Ohakea in 2003. Units still to transfer to Ohakea include No. 40 Squadron (fixed wing transport), No. 5 Squadron (maritime surveillance), 485 Wing (Force Element management), Operational Support Squadron, and a range of technical and administrative support units and elements. A report is required for Cabinet by June 2006 on the firm costs of, and timetable for, the consolidation.
A Joint Approach
Joint Command and Control System
The joint command and control system (JCCS) is an information technology system. The term "command and control" refers to a commander's ability to organise information to support robust and timely operational decisions, and then to rapidly disseminate those decisions to subordinates and superiors.
Recent experiences have shown that the current NZDF command and control capability is dated and inefficient and requires ad-hoc, short-term fixes in order to support operations. Effective command and control is a significant enabler for all NZDF activities and would maximise the Government's investment in other defence equipment and enhance the performance and efficiency of the NZDF on operations, including working with other agencies and nations. The JCCS will enable the right information to be provided to the right person, at the right time.
Initiatives for Jointness
There are also a number of NZDF initiatives that will contribute to the achievement of 'jointness'. These are:
- Improved communications interoperability between deployed forces and operational headquarters,
- Improved Information Technology applications to support operations and the effective management of the NZDF by:
- Joint Engineering Management System (JEMS) (1). Implement Phase One of the JEMS (Air Force Engineering) by second quarter 2006.
- Joint Engineering Management System (2). Plan and obtain resources for Navy Engineering implementation by second quarter 2006, subject to successful conclusion of JEMS (1).
- Personnel Systems. Upgrade existing personnel systems so as to extend the life of these systems by 5 to 7 years.
- Improved relationships with government departments/agencies through developing a strategy by the second quarter of 2006 to implement permanent networks with other agencies (e.g., MFAT, New Zealand Customs, New Zealand Police, Ministry of Fisheries) that enhance New Zealand government agency interoperability.
- Formation in 2006 of a Joint Logistics and Support Organisation to streamline non-operational accounting, procurement, facilities management, travel, household removals, payroll and personnel administration.
