The Shape of New Zealand's Defence - A White Paper (November 97)
Chapter I (One): A Defence Plan for the Future
Introduction
This White Paper sets out a blueprint for investing in defence. It is based on a recently completed Defence Assessment which examined New Zealand's strategic circumstances, the regional and international trends over the next decade, and the likely implications that these trends have for our country. It takes into account fiscal restraint as well as the need for the forces to maintain their professional standards and to be properly trained and equipped. The blueprint will signal to our allies and friends that New Zealand is pulling its weight. In short, it sets out an affordable way forward for ensuring our security now and in an uncertain future.
The Policy Framework
The defence policy set out in the 1991 White Paper continues to be the most appropriate policy framework to guide our defence effort in response to the future security environment. The three principal elements of this policy are:
- defending New Zealand against low-levels threats such as incursions into our Exclusive Economic Zone (EEZ) and terrorism
- contributing to regional security which includes maintaining our key defence relationships with Australia and our Five Power Defence Arrangements (FPDA) partners - Australia, United Kingdom, Malaysia and Singapore
- being a good international citizen by playing our part in global collective security efforts, particularly peacekeeping
Self-Reliance in Partnership is the strategy used for implementing this policy. "Self-reliance" is essential for the national tasks that any independent nation must carry out - resource protection, counter-terrorism, and surveillance of our approaches. "Partnership" involves the protection of our wider security interests, such as the maintenance of international law and order, and freedom of the seas. This can only be done in cooperation with countries who share similar interests.
The Blueprint for Investing in Defence
The Government's first priority will be to rectify the most critical deficiencies in those capabilities where there is more likely to be a need in the short term, that is: re-equipping the Army so that it can undertake the more demanding peace support operations; and improving the ability of the Air Force to undertake maritime surveillance tasks in our EEZ and the Southern Ocean. These investments will be complemented by a long-term programme of investment in all areas to ensure we will have the base to build on in order to meet any more serious security challenge that could emerge in the future.
At the same time, the New Zealand Defence Force (NZDF) will continue with a wide range of efficiency improvements, aimed at transferring resources from support functions to front-line operational areas, so that New Zealanders can be assured that they are getting the best value from their investment in defence.
Investing in people will be a key. This will involve lifting the operating tempo of the Defence Force so that professional standards can be achieved and maintained, and so that people can be recruited, trained and retained to serve New Zealand in a challenging and rewarding career. It also means addressing conditions of service issues.
The Investment Plan
The rebuilding of New Zealand's defence capabilities will take shape over the next five years. Funding increases will have to be limited in the immediate term while other Government priorities are addressed. The most significant investments in the Forces in the short and long term are outlined below. An outline of the long term plan for capital investment can be found at Annex A.
Royal New Zealand Navy
- The naval combat force will move from four frigates to three in 1998. The Government has decided that it will not take up the current option under the ANZAC Ship Treaty to purchase additional ANZAC frigates. A fifth Seasprite maritime helicopter will be purchased. Other major investments over the next ten years include upgrading the existing torpedoes, purchasing an upgraded Seasparrow air defence missile, and acquiring a towed array sonar that will improve protection from submarines.
- The major investments in the naval support force include the acquisition of a remote sea minehunting system.
- Total capital investment over the next five years is estimated at $355.5 million.
- With the change from a naval combat force of four Leander frigates to three ships, the average paid personnel strength of the Navy will decrease from 2,075 to 1,861.
- The annual operating budget of the Navy will increase from $283 million to an eventual steady state of about $292 million.
New Zealand Army
- The strength of the two regular force battalions located at Linton and Burnham will be increased with the addition to each of a fourth rifle company. The build-up will commence in 2001 and is expected to be completed by 2005.
- The current brigade framework will be retained, with the Territorial Force continuing to play an important role. To better focus the contribution of the territorial forces, they will be consolidated within the provincial areas. This will improve their effectiveness and retain the important linkages between the Defence Force and regional communities.
- Army capital equipment acquisitions will include the following:
- immediate priorities include the replacement or upgrading of the current fleet of M113 Armoured Personnel Carriers, new tactical communications equipment, direct fire support weapon systems, and a replacement for the current fleet of Landrover light vehicles
- investments in the mid term include a new reconnaissance vehicle, upgrading of night observation systems; and the purchase of a medium range anti-armour weapon system and communication equipment for the Special Air Services
- Total capital investment over the next five years is estimated at $311.3 million.
- The average paid strength of the Army will increase from 4,400 to 4,900 by 2005/6.
- The Army's annual operating budget will increase from $361 million to $413 million.
Royal New Zealand Air Force
- The current fleet of A4 Skyhawk fighters, while old, has been upgraded to provide an effective platform for their key roles of support for land forces and anti-ship missions well into the next decade. To capitalise on this investment, the fleet's weapon delivery capabilities will be upgraded. A new anti-ship missile will also be acquired to permit the aircraft to release its weapons from a safer distance. Most of these upgrades can be transferred when a decision is eventually taken on a replacement for the A4s.
- The most pressing Air Force requirement is to upgrade the capabilities of the P3 Orion fleet. The airframe is undergoing a life extension that will permit it to remain in service for a further twenty years, and the sensor equipment, some of which dates back to 1966, needs to be updated as well. The Orion's surface-surveillance capabilities are seriously degraded, and its sub-surface capabilities are almost gone. These deficiencies will be addressed as a priority over the next four years through an investment programme known as Project Sirius.
- The current fleet of five C130 Hercules aircraft can keep going for some years yet and a replacement is planned towards the middle of the next decade. The logical replacement is the new J model of the C130 Hercules now entering service in the United States and the United Kingdom, and being purchased by Australia. New Zealand has an option to purchase as part of the Australian buy, and this option is open until the end of 2002.
- The two B727 fast-jet air transport aircraft can also be kept in service for some time yet, although new noise-abatement regulations will gradually reduce their utility. Studies have shown that replacing or "hush-kitting" the current engines will not be a cost-effective solution. The Government will consider replacing these aircraft in due course with suitable aircraft such as the newer versions of the B737 (which are designed for long-range passenger and military light-cargo service).
- The current fleet of 14 Iroquois utility helicopters will be kept in service and will receive a life-extension upgrade over the next three years.
- The tactical communications and navigation systems of all aircraft fleets will be upgraded.
- Total capital investment over the next five years is estimated at $435 million.
- The personnel strength of the Air Force will remain at roughly its current level of 3,065.
- The Air Force's annual operating budget will increase from $352 million to $417 million.
Other Major Initiatives
- A Defence Force personnel project, "Service 21", has a number of initiatives that will address workloads, pay and benefits, periods of engagement, superannuation, accommodation, and non-financial conditions of service such as family support and honours and awards.
- The Defence Force is undertaking a Defence Management Review which is expected to achieve operating savings that could build up to as much as $45 million annually by 2004, and reduce the amount of capital spending over the next eighteen years by roughly $215 million.
- The joint command systems of the NZDF will be upgraded to improve its ability to conduct joint operations when the three services work closely together as an integrated team.
Funding Implications
This rebuilding will require additional operating spending over the next five years averaging $72 million a year, plus additional capital investment of approximately $300 million over the same period. The estimated costs, both operating and capital, for that period are as follows.
Estimated Change From Current Funding (In 1997 $Millions)
| 1998/99 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | Total | |
|---|---|---|---|---|---|---|
| Total Funding Change | 25 | 96 | 183 | 164 | 195 | 663 |
| Actual Expenditure | 25 | 45 | 78 | 91 | 122 | 361 |
| Capital Injection1 | 0 | 51 | 105 | 73 | 73 | 302 |
A projection over the next 18 years indicates an average annual funding increase above current funding levels in the region of $140 million. This increase in defence spending would not raise the proportion of the nation's GDP devoted to defence, but would hold it steady at 1.3%, or about 1.1% if GST and capital charge are excluded.
- The estimate of capital injections is indicative as they will be allocated on a case-by-case basis when individual projects are submitted for Government approval.
