AUSTRALIAN DEFENCE BUSINESS REVIEW MAGAZINE

Australian Defence Business Review November-December 2008 1

The Defence & National Security Capability Reporter Vol 27 No 08: Nov-December 2008

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New ZealandTurn of Politics Nationals return to powerLead Issues & Analysis

New White Paper Promise November 2009

Air Combat Debate Dead & buried

Barack Obama Headed for the White House

Kevin Rudd - Focus on China in security plan

NZs National Party, headed by John Key, has brought an end to Helen Clarks eight years as Prime Minister. Key, however, is left with a poisoned chalice in having to im-mediately deal with the impact of the GFC pushing the NZ Budget into deficit. p4

Key and his new Defence Minister, Dr Wayne Mapp, have promised a new Defence White Paper for New Zealand by end-2009, along with an overhaul of Helen Clarks series of Defence Long Term Development Plansp7

Early comments by John Key and Dr Mapp have scotched any hopes the new National Government will overturn key elements of Helen Clarks Defence Policy Framework, including a re-establishment of the NZ Air Forces air combat capabilityp10

A year into his first term, Australian Prime Minister, Kevin Rudd, has tabled his first National Security Statement. The document exhibits little change from the policies of the Howard Government, and even embraces its homeland security approachp14

Barack Obama is to be historically inaugu-rated US President on 20 January 2009. He carries to the White House the hopes and aspirations of an unprecedented number of newly-political Americans, all seeking economic and social changep11

Australian Defence Business Review (ADBR) magazine is published up to 12 times annually, with additional printed and e-Newsletter supplements by: Business Communications Group [a Division of Co-operative Ventures (Australia) Pty Ltd, ABN 23 008 648 244] PO Box 250, Mawson ACT 2607, Australia - Telephone: +61 (0)2 6280 5876 - Facsimile: +61 (0)2 6280 7507 - Email: [email protected] - Internet: www.adbr.com.au - All material ap-pearing in ADBR is subject to Copyright 2008. Reproduction in whole or part is not permitted without expressed written permission or licence agreement.

Defence 2009 Back to the drawing board to

Canberra Bureau Report

With the US$130 billion New Zealand national economy now in its worst recession in 18 years and Secretary of the Treasury, John Whitehead, forecasting late-December a shallow recovery in 2009, the 8 November 2008-elected Prime Minister John Key and his Minister for Defence, Dr Wayne Mapp, have wisely flick-passed any substantive consideration of national se-curity and defence policy to a new White Paper, to be prepared over the course of 2009.

In a faltering economy that Whitehead sees generating not much more than low, rather than negative growth over the next two years, the Treasury Secretary anticipates an early budgetary down-shift into significant fiscal deficit is projected to last for some time, and result-ing in an increase in public debt beyond the 18.8% (in sovereign debt terms) of gross domestic debt inherited from the former Clark La-bour government.

With Prime Minister Keys eyes focused on quickly implement-ing a series of economic stimulus programs to address the parlous economy extending from income tax cuts, reductions in official interest rates, and a two-year assistance package for workers losing their jobs (as promised in the election campaign) a reading of the NZ Defence Force 2007/08 Annual Report clearly establishes why a new defence assessment is needed.

According to the NZDF annual report, the countrys armed forc-es are already under significant stress due to accumulating pressures on funding as a result of multiple concurrent deployments, whilst at the same time seeking to progress major force recapitalisation out-lined in the former Clark governments series of Long Term Devel-opment Plans (LTDP) the fourth update of which was published in September.

define defence in recessionThe new Key-led National government in New Zealand is now facing up to the same conundrum as currently being addressed by the Australian Government, which in recent months has opted to push through a hastily-developed efficiency program and forced savings in national defence expenditures, whilst a new Defence White Paper seeks to accommodate a rapidly changing threat outlook against the onset in 2009 of global economic recession.

AustralianDefence Business Review

2 Australian Defence Business Review November-December 2008

New Zealand Defence Review

The return to power of the National Party after eight years, finds the NZ defence landscape much changed by Helen Clarks govern-ment, but still not well equipped to deal with the broad range of threat contingencies expected to be thrown up by new strategic guid-ance, especially in regard to increasingly hazardous Afghanistan.

NZ DEFENCE & THE NOW RECESSION: Although defence issues did not assume a high profile in the most recent NZ elec-tion campaign, the 7 October release of both the LTDP-IV and the NZDFs 2007/08 Annual Report was found to be extremely useful in helping to inform National Party defence policy, and the decision to defer addressing accumulating funding stresses within the NZDF by promising to develop and publish a new Defence White Paper within one year of its winning office (ie: November 2009).

Unlike the Rudd Government in Australia which is pressing on with the tabling of a new Defence White Paper in March-April 2009 with the intent of informing a new 2009-2019 Defence Capability Plan set for release at the Defence+Industry Conference in Adelaide on 30 June the timetable adopted by Prime Minister Key allows plenty of time for an appreciation to be had of prospective changes in United States foreign & national security policy under the new Obama administration.

At the same time, the delay will provide time for a more informed assessment to be made of the status of any pending economic recov-ery, and hence, the state of the NZ Government budget as it moves into an initial NZ$6.63 billion deficit in 2008/09 (rising to $11.38 billion by fiscal 2013), and accordingly the Nationals ability to sup-port any major new defence investment program coming out of the November 2009 White Paper.

Keys campaign through to 8 November naturally focused on re-cent substantial budgetary blow-outs on major NZDF capital pur-chases, and hence, the need for more to be done to properly analyse the quality of defence procurement and budgetary procedures within the Ministry of Defence and the NZ Defence Force.

As highlighted by LTDP-IV, the new White Paper is to examine NZDF capability requirements at a time when a series of major De-fence assets will have reached the end of their economic lives (ie: the C-130H Hercules transport fleet), and when the horizon (ie: out to 2015) of the LTDP will have effectively expired in terms of its cur-rency against evolving threat scenarios.

While National defence policy stressed the new White Paper should reflect NZs traditional penchant to take an independent as-sessment of its security environment an approach firmly cemented by the former Clark government when it first came to power in 1999 its election policy also placed primacy on the need to have inter-operability with the Australian Defence Force (ADF) in terms of equipment, training, and doctrine.

NATIONAL DEFENCE POLICY: In this regard, the 7 October policy document conceded both countries are being drawn reluc-tantly to play a bigger stabilisation role in the South Pacific, and it is essential that NZ has a reasonable level of military capabilities to achieve the full range of defence & civil tasks within our region. Further, it acknowledged that NZs development assistance similarly needed to be more focused on its immediate neighbourhood, rather than scattered around parts of the globe where New Zealand has lit-tle standing, and can make only a token contribution.

In a number of respects, therefore, the National Partys proposed defence policy (as taken to the election campaign) has many simi-larities with Kevin Rudds declarations during the Australian election campaign. John Key, however, made no firm commitments to sus-taining real defence funding, as Rudd did in the campaign leading up to the Australian federal election in October 2007.

A year after coming to power, Rudds first National Security State-ment (NSS) to the Australian Parliament on 4 December trumpeted the dawn of the Asia-Pacific century, and pointed to a need for the nation to assume the mantle of creative middle power diplomacy in seeking to influence the many interactions that will ultimately deter-mine the future strategic stability of the Asia-Pacific region.

As part of this construct, Rudd nominated as a priority continued ongoing close cooperation with New Zealand, in the continuing se-curity challenges faced by the island states of the South-west Pacific (and looking) to both help shape our region through constructive engagement, as well as be prepared for any unforeseen deterioration in the strategic environment.

During an 18 August visit to New Zealand for talks with former Prime Minister Helen Clark, Prime Minister Rudd had similarly spo-ken in terms of constructive engagement of the two nations commitment to a new era of cooperation with the Pacific Island countries. This was subsequently confirmed as being undertaken through the roll-out of a Pacific Partnerships for Development pro-gram, specifically focussed on addressing shortcomings amongst Is-land neighbours in infrastructure, basic health & education, improved public sector management and community-based development.

Recognising such influences, National defence policy also stated the NZDF of the future must have a sufficient range of capabili-ties to deal with any reasonable foreseeable contingency within our region, and to build security within the South Pacific. There is a need for forces that are agile and can operate over long distances at very short notice. Prospectively flagging a cap on the extent of respon-sibilities to be undertaken by its forces when deployed outside their immediate region, National defence policy also stated such forces would be focused only on specific and specialist capabilities that reflect New Zealands defence expertise.

CLEARING THE F-16 & ANZAC DECKS: However Prime Minister Key wishes to pursue the policy framework underpinning the next NZ Defence White Paper, few commentators would doubt his work will benefit from the discipline applied by former Prime Minister Clark, which began in 2001 with the controversial scrap-ping of the former Shipley-led Nationals deal to reinvigorate the RNZAFs fixed-wing combat arm by leasing 28 F-16A/B fighters from the US, to replace the existing upgraded Skyhawk fleet. Less controversial (albeit not in Australia), was confirmation of the deci-sion (announced in December 1998 by former Defence Minister, Max Bradford), not to buy the third Anzac-class frigate.

Having cleared the decks with firm decisions on the F-16 and third frigate acquisition, Helen Clark then moved to turn traditional defence thinking on its head by formally expanding the role of the NZDF across a much wider range of non-military threats some-thing only just addressed by Prime Minister Rudd in his first National Security Statement with sufficient funding to maintain a highly professional, small army whose contribution would be welcomed in multinational operations, particularly in the Pacific.

Overviewing the formal statements to date, there is nothing in Prime Minister Keys policies which indicate he will greatly change current New Zealand defence posture, including the ban on the en-try of nuclear-powered vessels into local harbours that resulted in the United States moving in the 1980s to freeze New Zealand out of the ANZUS circle. Still with serious budgetary difficulties now impacting across the NZ economy, it is likely a number of programs currently regarded as being critical to avoid the failure of policy might slip to the right in terms of their acquisition priority, as the policy itself is inevitably redefined in the context of the new White Paper and changed global economic environment.

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Australian Defence Business Review November-December 20084

KEYS INHERITANCE FROM HELEN CLARK: One of the first tasks undertaken by the Labour/Alliance coalition Government when it came to power on 27 November 1999, was to advance early planning to raise a new Defence Assessment, heralded at the time as the first comprehensive review of overall defence policy since the substantive 1991 Defence White Paper. This was undertaken in a manner which in parallel sought to cast a more recent National 1997 White Paper The Shape of New Zealands Defence as being of limited value moving forward, given it had only considered force structure, equipment and funding.

The 1997 document nevertheless provided key long-term value-added in setting out three ultimately enduring elements of evolving NZ defence policy: the need to defend against low-level threats, such as incursions into the countrys Exclusive Economic Zone (EEZ), and to counter terrorism; funding a substantive NZ contribution to regional security (including maintenance of key defence relationships with Australia, and the Five Power Defence Arrangement partners); and being a good international citizen by playing a part in global col-lective security efforts, particularly peacekeeping.

By 2000, however, there had emerged a clear mismatch between extant defence policy goals, the level of operational activity of the NZDF, and available resources Prime Minister Clark was willing to afford defence when compared to other national priorities. The ul-timate conclusion was that NZDF resources were spread too thinly over a wide range range of capabilities, not all of which could be sustained into the future. A funding crunch was imminent, and thus required the adoption of an appropriate methodology that would en-able the re-prioritisation of New Zealands defence capability against the available funds, in short, so the NZDF can do what it needs to do, and do it well.

QUIGLEYS CULL OF AIR COMBAT FORCES: As a means to effecting immediate defence policy changes, the new Clark Govern-ment commissioned in late-December 1999 former ACT MP, Derek Quigley (chair of the NZ Parliaments Foreign Affairs, Defence & Trade Select Committee) to review the F-16A/B fighter lease contract. Quigley, a regular critic of National defence policy, was re-quired to present his conclusions by 6 March 2000. The fighter deal involved NZ$124.8 million being paid for two five-year fighter leases, along with $238.2m for a start-up package to train strike pilots, and bring the aircraft up to full operational capability.

The deal also provided the option of buying the aircraft outright after 10 years, which was estimated at the time to cost an additional $287m. An equipment upgrade costing $93m (for targeting pods, electronic countermeasure pods and precision- guided missiles) would have ultimately brought the all-up capital cost to NZ$743 million over 10 years, if both lease options were exercised. NZ La-bour was critical of the deal throughout the 1999 election campaign, preferring to pitch its Defence policy on support for the conclusions

of a Parliamentary Select Committee for Foreign Affairs, Defence & Trade inquiry report Defence Beyond 2000 whose deliberations were heavily guided by Quigley.

The Defence Beyond 2000 report published on 30 August 1999 advocated an urgent need for NZ to re-prioritise its defence expenditures around fundamental national interests, and in turn look-ing to sustain well-equipped forces to undertake less combat inten-sive regional peacekeeping roles, as against expending scarce treasure in far-flung theatres, such as Bosnia.

Labour pitched to voters that, in government, it would seek to dismantle the F-16 lease deal to free up funds for new sea transport capability, whilst similarly walking away from a third Anzac frigate purchase in preference for a new fleet of smaller multi-role naval patrol vessels. It was also said the equipment needs of the NZ Army (ie: for its new emphasis on peacekeeping) would be reviewed, along with associated pay and allowances.

Public perceptions of the Navy the most traditional of the three services were also fast changing in response to the nature of recent operations. At the time, NZs then two operational frigates HMNZS Te Kaha and the steam-driven Leander-class HMNZS Canterbury, had just returned home prior to Christmas after deploy-ments in the Gulf and East Timor.

The Canterbury had spent 76 days on INTERFET duties, dur-ing which she escorted 30 supply and merchant ships to East Timor, mounted an anti-submarine search-and-deter operation, and covered the NZ battalions amphibious landing at Suai. The Te Kaha had similarly spent almost six months away, including three weeks on East Timor duties, and six weeks in the Arabian Gulf enforcing UN sanctions against Iraq.

DEFENCE POLICY FRAMEWORK: Reflective of these influ-ences, Helen Clarks Labour-Alliance Party Government published 19 June 2000 a new paper The Governments Defence Policy Framework which heralded the dawn of a more firmly reasoned approach to determining military force structure, by first setting out key defence policy objectives, and distilling this down to eighteen required roles and tasks for the NZDF. The five stated policy objec-tives were:

(1) To defend New Zealand and to protect its people, land, territo-rial waters, EEZ, natural resources and critical infrastructure;(2) To meet alliance commitments to Australia, by maintaining a close defence partnership in pursuit of common security interests;(3) To assist in the maintenance of security in the South Pacific, and to provide assistance to Pacific neighbours;(4) To play an appropriate role in the maintenance of security in the Asia-Pacific region, including meeting obligations as a member of the Five Power Defence Arrangement (FPDA); and(5) To contribute to global security & peacekeeping through par-


NEW DEFENCE WHITE PAPER FOR NEW ZEALAND: The new National Government of Prime Minister, John Key, is to have another look at New Zealands national security & defence priorities. Upon coming to government in 1999, former Labour Prime Minister, Helen Clark, made sweeping changes to the front line capabilities of the NZ Defence Force by scotching a deal to replace the ageing Skyhawk fleet (far L) with leased F-16s (L) from the United States, and confirmed it would not reverse former PM, Jenny Shipleys decision to cancel the acquisition of a third Anzac frigate (R) from Australia. Also up for review were decisions about NZ ground force deployments overseas, and whether contributions to far away campaigns (ie: Bosnia) really did serve NZ national security objectives. ADBR, TENIX DEFENCE & NZ GOVERNMENT PHOTOS


ticipation in the full range of United Nations and other appropriate multilateral peace support and humanitarian relief operations.

Whilst acknowledging the wider Asia-Pacific strategic environ-ment (of which NZ is a part) remained relevant, the new policy framework controversially (at the time) declared New Zealand to be not directly threatened by any other country, and not likely to be involved in widespread armed conflict. This set the scene, moving forward, for a down-shift in NZDF combat capabilities in order to shape its forces so they could best contribute to regional stability and global peace, by promoting comprehensive security through a range of initiatives including diplomacy, the pursuit of arms control & disarmament, addressing global environmental concerns, providing development assistance, and building trade & cultural links.

The document went on to affirm a new direction would be taken in NZ defence and security policies, whereby future approaches were to be based on New Zealands own assessment of the security environment, in particular, on what action was considered to be in the countrys best interests and without regard to the preferences of major global powers, such as the United States.

Within a community of sceptical taxpayers, Clark promoted the primary reason for maintaining a defence force was to secure New Zealand against external threat, to protect our sovereign interests, in-cluding in the EEZ, and to be able to take action to meet likely con-tingencies in our strategic area of interest in short, not too much different from the Nationals 1997 approach.

With the US having effectively turned out the lights in terms of defence cooperation with New Zealand, The Defence Policy Framework went on to declare there is no strategic partnership closer than that with Australia. NZ will continue to meet its obligations as a member of the FPDA. Special obligations to Pacific neighbours to assist in maintaining peace, preserving the environment, promoting good governance and achieving economic wellbeing were also recognised, within the new Framework.

In short, the new policy sought a secure neighbourhood, and we must work towards that. East Timor & Bougainville have dem-onstrated that NZ has a role to play in helping keep the peace in our region. The Government believes that this role extends beyond the provision of military support. It also includes assisting peace proc-esses through diplomacy and mediation.

Declaration of the Defence Policy Framework next addressed the future structure of the NZDF, saying its progressive implementa-tion will mean a shift towards a range of military capabilities which are sustainable, safe and effective in combat and in peacekeeping, and structured for maximum operational and political impact. Future capital investments flagged included: upgrading the Armys mobility, communications, surveillance, and fire-support capabilities; providing effective air and naval transport capabilities; and maintaining effective maritime surveillance capabilities of the Air Force and Navy within New Zealands EEZ, and the EEZs of Pacific Island States.

Such statements went on to inform a longer-term NZDF re-structure (for completion by November 2000), with core require-ments being to: ensure land forces were well equipped to meet NZs most immediate needs; that effective air transport & military sealift for deployment/support would be provided; and for surveillance of the maritime environment that met international obligations for search & rescue. Urgent capital acquisitions viewed as fully consistent with the new defence policy goals & priorities (ie: modernising the Army and addressing P-3K Orion capabilities) were considered for funding before other reviews concluded.

The 2000/01 Defence Budget allocated $61.6m for continuing the Anzac ship project; $5.3m for the Orion aircraft life exten-sion project; $61.3m for maritime helicopters; $1.9m for the Orion

auto pilot; $3.2m for very low-level defence; and $11.6m for other projects (including a joint C2 system). Projects scheduled for com-pletion over that financial year included: direct fire support weapons (heavy machine guns) for the Army; a bridge simulator for the Navy; the Orion autopilot, replacement of P-3K wings and horizontal stabilisers; and surveillance, target acquisition and night observation equipment for the Army.

THE LONG TERM DEVELOPMENT PLAN: Leveraging off the guidance provided by the Defence Policy Framework, the Clark Government next published 11 June 2002 its first NZDF Long Term Development Plan (LTDP) , which contained a series of new projects and funding set to ultimately reconfigure the nations military forces into the armed combat/peace-keeping force mould that is prevalent today (see major projects review below). Similar to the Austral-ian Governments initial 2001-2010 Defence Capability Plan (DCP), the LTDP drew off both the June 2000 Defence Policy Framework, as well as capability requirements outlined 8 May 2001 in the Defence Statement A Modern Sustainable Defence Force Matched to New Zealands Needs.

Key decisions in the Defence Statement were based around a joint approach to structure and operational orientation. There would be a modernised Army with new light armoured and light operational vehicles, improved communications, and new weapons. There would be a practical Navy fleet matched to New Zealands wider security needs: two Anzac-class frigates, a new multi-role vessel and new offshore and inshore patrol vessels (ie: as ultimately reflected in project Protector).

Thirdly, there would be a refocussed and updated Air Force not in the mould of traditional western militaries but one with up-graded/replacement transport aircraft, new helicopters, and upgraded patrol aircraft. All of these investments were to be underpinned by a funding commitment to provide financial certainty and reflecting the need to provide depth rather than breadth, and the need to focus resources on capabilities that contribute the most to NZ objectives. The line of argument ultimately supported the decision to disband the Air Combat Force, and follow-on decisions to eventually close the Whenuapai airbase, and consolidate the Air Forces operational capacity at Ohakea.

The first stage of implementing the new joint approach saw es-tablishment of Headquarters Joint Forces New Zealand (HQJFNZ) in 2001, at Trentham. The Clark Government also sought greater cooperation and collaboration within the NZDF, and between the NZDF and the Ministry of Defence, drawing on the recommenda-tions of a 2003 Review of Accountabilities & Structural Arrange-ments (RASA).

The LTDP also reflected a new governance construct whereby elected officials began to assume much more control over the direc-tion of military spending. Pitched by then-NZ Defence Minister, Mark Burton, as a planning tool to enable decisions on defence acquisitions to be taken in the context of the Clark Governments approach to national defence policy the new LTDP sought to bet-ter communicate the priority and estimated affordability of future NZDF acquisitions.

The prioritisation of LTDP projects was achieved through a gap analysis that compared the current NZDF force structure against an assessment of its ability to meet the reoriented roles tasked to it by the new Defence Policy Framework. Tasking was not solely related to operational deployments, but related also to the development and maintenance of a force in being, and capable of undertaking a range of operations if required. Projects were also prioritised against the five policy objectives earlier laid down by the Clark Government.

The most pressing capability gaps fell into three broad categories:




Type 1 Projects considered critical to avoiding outright failure to achieve policy objectives capabilities necessary to facilitate the essential functioning of the NZDF, and its ability to undertake op-erational missions (eg: systems for joint command & control, airfield infrastructure maintenance, etc), as well as fundamental operational capabilities. Predictably, the gap analysis highlighted major shortcom-ings caused by the decision to disband RNZAFs combat wing;

Type 2 Projects considered necessary to avoid significant policy risks (eg: particularly for Land forces); and

Type 3 Projects considered as carrying a lower level of risk in terms of policy failure, but affecting the degree to which policy objectives were met and the manner in which they were fulfilled, but still requiring upgrades to current leading defence assets.

Given a view that the five defence policy objectives were of equal importance, there was a supplementary need to undertake a sensitiv-ity analysis to assign a measure of the relative importance of each objective. This approach was said to demonstrate that the projects within the top category (Type 1) remained constant, and confirmed their importance to avoid policy failure.

As a further check, the list of highest priority projects was then compared against the priorities set out in the Defence Policy Frame-work, which elucidated Clarks core requirement to raise and sustain well-equipped, combat-trained land forces which are also able to act as effective peacekeepers. The LTDP ultimately took this directive to heart, resulting in the nomination of a series of Type 1 projects addressing total force mobility, including the need for NZ to pos-

sess an independent means of transporting military capabilities to theatres of operations.

Highest priority projects were then supported with a raft of Type 2 initiatives seeking to complement earlier decisions to acquire 105 Light Armoured Vehicles (LAV-IIIs) from GM of Canada, as well as 308 Light Operational Vehicles, for which an RFT had just been released. Heading this list was the acquisition by 2003/04 of both a Direct Fire Support Weapon, and a medium-range Anti-Armour Weapon. Basic NZ Army operational capabilities were also proposed to be upgraded through the acquisition of new engineer-ing equipment and supporting communications systems. Nominated Type 1 and 2 projects were afforded the highest probability (ie: for progression over the next five years), after which the LTDP would be adjusted reflective of changing policy circumstances and/or because elected Government might not be able to maintain real (ie: adjusted for inflation) funding levels.

The first LTDP allocated up to NZ$1 billion (nominal terms) over the next 10 years with current operating baselines set to 2005/06, with adjustments for unfunded depreciation thereafter. Leasing options were to be considered where there was a neutral trade-off between capital and operating expenditure. All in all, in-cluding projects already approved, some $3 billion was proposed to be spent on upgrading NZDF capabilities over the next ten years.

To firm-up the costing base for the full LTDP, NZ authorities also had to improve the individual project costing data encompassing all elements of defence capital expenditure, in-cluding acquisition costs, through-life costs and cost/risk mitigation. Deflators also had to be developed to reflect how military-related

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inflation impacted on defence capital expenditure and planning. Ac-cording to LTDP-I, 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.

The Long Term Development Plan also made provision for a fourth type of project deemed necessary to deliver the capabil-ity required by Government which in a budgetary squeeze would fall below the line in terms of achieving overall priorities. Type 4 projects included: the creation of a High Readiness Infantry Com-pany; resourcing a short-medium range air patrol capability; and modifying the new Multi-Role Vessel/Offshore Patrol Vessels to operate in the Ross Sea.

They also included upgrading mine detection capability; resourc-ing an Army manoeuvre range; replacing indirect fire support weap-ons after 2012; as well as upgrading a raft of military infrastructure projects. LTDP-I also directed that, given Type 4 projects are unlike-ly to be funded, this underlines the importance of reviewing projects that are above the line in order to realise potential savings. These projects will still require work to clarify their scope, utility across the policy objectives and cost, and will be included in future reviews of the Long Term Development Plan. Changing strategic circumstances (however), could result in a reprioritisation of projects.

Headquarters NZDF Development Branch was tasked to provide a work plan to manage the LTDP, that would allow the single Serv-ices, NZDF and MoD to plan for, and allocate appropriate resources to those projects that have a higher priority on the LTDP. Early goals for LTDP-I implementation included: beginning construction of the project Protector fleet; delivery of the Armys light opera-tional vehicles; delivery of the two Boeing 757s; selecting new heli-copters; procuring special operations equipment; and securing timely delivery of the earlier approved NZLAVs and Army radios.

DEFENCE SUSTAINABILITY INITIATIVE: Three years into LTDP-1 (2 May 2005), the Clark Government published a Defence Sustainability Initiative (DSI), represented at the time as the fourth stage of a systemic approach to reshape New Zealands military forces around a more realistic appreciation of the countrys place in global politics, reflective of the available resources and cognisant of NZs domestic national security requirements.

At the time of its presentation, Defence Minister Burton prom-ised that by the end of the 10-year DSI funding package, the Clark Government would have increased the NZDFs operational base-line funding by 51% since it took office in 1999. There was little acknowledgement, however, such funding was buying a much less capable defence force, compared with earlier times. Still, Burton went on to pitch his efforts as addressing an under investment begun in 1991/92 when the former National government was said to have cut defence baseline spending by $112.75m, which was followed by cuts totalling $150m well into the late-1990s.

Less well acknowledged in all of the above was the genesis of the DSI, which emerged via a December 2003 NZ Ministers for Defence, Finance & State Services commissioned multi-agency review that yielded the Defence Capability and Resourcing Review (DCARR). In an atmosphere of scarce resources, the Terms of Reference required this Review to assess the optimum capability configuration and resource requirements of the NZDF to undertake the roles and tasks set out in the governments statements of defence policy, and in the Defence LTDP-I. DCARR was not empowered to review stated Defence policy, however.

Presented in February 2005, the final DCARR report identified several areas where, due to a lack of funding, clear deficiencies had emerged in both NZDF and Ministry of Defence (MoD) activities.

Heading this list were: shortfalls in personnel numbers across the three services; interactions between Headquarters NZDF & Head-quarters Joint Forces New Zealand (HQJFNZ); and deficiencies in personnel numbers and the trained state of individuals in some trades. Latter NZDF annual reports showed that at this time, the total number of military personnel had fallen from 20,785 in June 1991, to 15,512 in June 1998, and 12,889 in June 2004. In short, the DCARRs message was that if corrective action was not taken, the NZDF was in danger of becoming ineffective.

Continuing funding constraints were further said to have led to under-expenditure on replenishing both equipment and reserves, with stocks having fallen well below appropriate levels. Certain priority weapon platforms were nominated as requiring upgrades or replacement (these were omitted in the public DCARR), while other military equipment was acknowledged as no longer meeting the required standard. Depleted contingency reserve stocks of ammuni-tion (the NZ Army estimated it would need to spend $170m on such stocks over the next ten years), fuel and spares were also evident. Development of infrastructure at camps and bases and improved corporate management capability was also called for. The DCARR estimated that a total of $690m would be required to fully fund mi-nor equipment upgrades and replacements over the next ten years. It also estimated $210m would need to be spent over the next decade modernising the NZDFs existing command, control, communica-tions and intelligence (C3I) system.

In terms of The Defence Estate, an independent study found the existing management structures might lead to sub-optimal resource allocations and Defence would need to invest $450m to upgrade some facilities over the next ten years. The document further noted the ongoing role of the new Capability Management Framework (CMF) in making such assessments, which was introduced in 2004 to replace in part the cumbersome Defence Planning System.

NEED FOR STRATEGIC PLAN: To evaluate the NZDFs man-agement systems and processes, the DCARR commissioned char-tered accounting firm Deloittes to undertake an assessment. Their key critical observation was that the NZDF lacked an overarching Strategic Plan, and that extant planning systems tended to be op-erationally biased, focussed on output delivery rather than organisa-tional capacity. The DCARR recommended that certain management projects currently under way should be given priority.

These included the creation of a Planning Branch to coordinate the strategic planning and program management capabilities of the HQ NZDF, and to monitor progress of the organisational activ-ity arising from the DCARR and RASA. It also included continuing development of the Capability Management Framework processes and the rollout of enhanced frameworks for corporate planning, risk management, performance management and knowledge manage-ment across the NZDF.

Subsequent analysis indicated that from the early 1990s to 1999, the level of commitment of personnel to operational deployments ranged between 2% and 6% of the regular force, including deploy-ments to Bougainville and frigate-based deployments to the Multina-tional Interception Force in the Arabian/Persian Gulf. This low level of commitment accordingly helped to conceal the extent to which NZDF capability was declining.

Since 1999, the continuing strain on capability became more evi-dent as the level of deployment to peace support operations ranged between 14-25% of the regular force, with the Army often deploying 35% of its regular force. DCARR found shortages were particularly significant in the Army and in HQ NZDF. For example, the Army was unable to sustain a motorised battalion in the near-term, and faced critical shortages in a number of trades. The Headquarters NZDF was affected by shortages of middle and senior ranking offic-

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ers, due to the need for such ranks to deploy operationally. The Air Force identified a need for significant increases in logistics support personnel, including flight safety, to support planned future introduc-tions of aircraft. The Navy was looking to recruit appropriate per-sonnel to ensure the full crewing of the project Protector fleet from 2007 [It is noted that at the end of 2008, with only some of these new platforms having been introduced into service, the NZDF has still not recruited enough personnel].

URGENT DSI RECOVERY PACKAGE: The Clark Govern-ments DSI response comprised a NZ$4.4 billion (excluding GST) 10-year package (starting in FY2005/06), in addition to $1 billion al-ready allocated to LTDP-I in supplemental capital funding to sustain initiatives [Note, figures for NZ defence spending in previous years were inclusive of GST]. An additional permanent baseline increase of $0.844m for the Ministry of Defence commenced from 2005/06. Additional capability requirements relevant to the post-9/11 inter-national security environment also featured in the DSI response. An additional $209m was provided for anticipated use over 2007/08 to 2009/10, and later, if the initial $1 billion allocated for the LTDP had not been exhausted by then.

Further, 11 September 2001 terrorist attack response influences were evident in the DSA as it included the need for an holistic whole-of-government view of security; the need to be ready for unexpected changes in the security environment; and the need for a defence force with multi-role capabilities ... that is interoperable with our likely partners. The DCARR also commented on operational and organisational capabilities in several areas of the NZDF and Ministry of Defence, saying it did not match what was required by government policy.

Gaps were also attributed to equipment continuing to be used in service despite such equipment having exceeded its economic life, a strong labour market affecting recruitment and retention of key NZDF personnel, which had had fallen to 12,889 (10,684 RF and 2,205 TF). Reasons cited for personnel decline included disband-ment of the Air Combat Force, reductions of the frigate fleet, the contracting out of support services (such as the Devonport naval dockyard, catering and base maintenance), and the implementation of efficiency and effectiveness initiatives.

Early priorities identified for the DSI included an In- terim Strategic Plan to be developed by mid-2005 (to clearly set out spending priorities), and a Defence Corporate Plan-ning Framework to guide the strategic management of the NZDF and the Ministry of Defence and a set of subordinate plans to integrate the management of people, infrastructure, equipment and resources were also developed.

The DSI was directed initially towards recovery of personnel levels, recruitment and retention, putting new and upgraded capabili-ties into service, and strengthening the organisational and corporate capability of HQNZDF. Other early priorities were reviewing the optimal configuration of the Army as it rebuilt its capability (ie: who would operate the NH90s?), and developing a program to address the backlog in minor capital projects, for example, in infrastructure, equipment and IT.

The implementation of the new processes and management sys-tems in the NZDF would be substantially complete by mid-2006. A mid-term review would be commissioned after five years to assess the appropriateness of the level of funding for the remainder of the funding period.

On 17 October 2006, Phil Goff who succeeded Mark Burton as NZ Minister for Defence on 19 October 2005 outlined the third update of the LTDP at the NZ Defence Industry Associations (NZDIA) annual forum. LTDP-III (earlier updates were in June 2003

and November 2004) entailed more than NZ$1b in NZDF spending. Goff noted that since the documents first release in 2002, the NZ Government had approved 13 projects for progression to acquisi-tion; five projects had been approved in principle by the Govern-ment; and 12 projects were currently in their capability development phase.

The new Minister told the NZDIA the eight NH90 helicopters being acquired to replace the Iroquois the single biggest NZ de-fence purchase since the Anzac frigates in the 1980s represented the last of the core capability projects of LTDP-I. The NH90 contract had been signed four months earlier in July for a cost of NZ$771m.

Seven new major projects were included in the LTDP-III Update, including: a new fuel storage facility, power generation and reticula-tion system at the Devonport Naval Base; the upgrading of taxiways at Ohakea air base; and replacement of leased Beechcraft 200 King Air trainers after 2008. It also included the purchase of close-in pro-tection weapons mounts for the two Anzac-class frigates; and possi-bly sharing a satellite to enhance NZDF communications after 2010.

ACCOUNTING FOR CLARKS DECADE: Publication of the NZ Defence Forces 2007/08 Annual Report marks a useful point in independently accounting for Helen Clarks administration of NZ national security and defence affairs. According to that document, since 1999, some NZ$7.6 billion was committed under the 2002 and 2006 updated Defence LTDPs, and the subsequent $4.4b DSI, in order to rebuild the capacity and capability of the countrys defence force.

DSI priorities were confirmed as being the restoration of person-nel numbers, the delivery of initial LTDP projects and improvements in Defences organisational abilities. Significant progress is said in the annual report to have been made in replacing and upgrading major equipment, improving service personnel pay and allowances and meeting the countrys local, regional and global commitments.

The Annual Report nevertheless also reveals a national defence force struggling to satisfy declared national security priorities (as well as the DSI goals) under the combined weight of a widespread lack of personnel and consistently poorly performing equipment. Multi-ple, concurrent deployments (and attendant training programs and/or defence diplomacy) are said to be placing pressure on the Armys mission critical equipment, and putting greater demands on experi-enced and specialised personnel including command & control, com-munications, logistical support and other key trades.

Similar pressures, including contractor delays, are also said to be being felt by the Navy and Air Force as they bring new platforms into service, in particular the project Protector fleet (ie: HMNZS Canterbury only commenced introduction into service in 2007), and upgraded C-130H Hercules, P-3K Orion and Boeing 757 aircraft. Army performance benchmarks declared in the Annual Report in-dicated it was only partially prepared for low-level conflicts and not equipped to meet higher level threats (albeit with company-sized forces having been deployed to Afghanistan and East Timor).

Turning to the NZ Air Force, the report said it had insufficient personnel to meet air and ground crew requirements, and was only partially prepared for complex maritime air operations. The Navy was said to have similarly struggled to sustain deployments for the balance of its ships for more than half the number of days at sea originally envisaged by capability planners. As at 8 December 2008, the NZDF comprised 9,432 personnel in the Regular Force, 2,157 in the Territorial Force and 2,586 civilian staff members across the armed services of Navy, Army and Air Force. Some 673 personnel were deployed on 16 peacekeeping operations, UN missions and de-fence exercises around the world. There were 41 non-operational (ie: Defence attaches) on overseas postings. The report found there were


After winning office, the Nationals new Defence Minister, Dr Wayne Mapp, was quick to express a different view of the current status of the NZDF, and the commentary contained in its 2007/08 Annual Report. In Dr Mapps view, the annual report had revealed significant problems with the state of the NZDF that Labour sim-ply had not even acknowledged. He added the NZ Auditor-General had to abandon an audit of major procurement projects under La-bour because the projects were so poorly managed that Kevin Brady (the Controller & Auditor-General) couldnt even find enough infor-mation to conduct an audit on.

Moving into 2009, the Nationals have given themselves a year to come to grips with the defence capability inheritance left after eight years of the application of Labour thinking, now set to be explained in a new Defence White Paper.

A I R P R O J E C T S

BOEING 757 MODIFICATION: The NZDF reports the 2007/08 financial year saw the return of the first of two upgraded and modified Royal New Zealand Air Force (RNZAF) Boe-ing 757-200 transports, which had been out of service since Novem-ber 2007. The aircraft conversion and avionics upgrade program will allow the carriage of passengers, freight, mixed passenger-freight, very important person and aero-medical evacuation (AME) missions.

The prototype aircraft completed flight testing 23 July. Work on the second aircraft being undertaken by Singapore Technologies Aerospace (ST Aerospace) at its US facility, ST Mobile Aerospace Engineering (MAE) will be completed by the end of the year. B-757 aircrews are said to have been below directed levels through-out 2007/08 as a result of the modifications. An additional B-757 crew was therefore proposed to be generated in late-2008. The 757s flew 273 hours from a target of 950 in 2007/08.

C-130 LIFE EXTENSION: The first upgraded aircraft under the C-130 Hercules Life Extension Project (LEP) was delivered in 2008, with fleet modernisation expected to be completed in 2011. The RNZAFs H-model fleet (five aircraft) is scheduled to serve until around 2017. The first C-130H with an upgraded self-protection system being undertaken in conjunction with the C-130 LEP is scheduled to be delivered and operational in 2009. The scope of the life extension program includes the replacement of specific mechani-cal, avionic and structural components, and the design & installation of flight deck communications and navigation improvements to meet evolving air traffic management regulations. Despite the modifica-tions, the aircrafts engines, propellers, and some other systems are viewed as remaining possible sources of unserviceabilities.

The Hercules fleet flew 1,814 hours from a total target of 2,166 hours in 2007/08 with the under fly a result of unforeseen delays in the C-130 LEP. Training activities for both the C-130 and Boeing 757-200 fleets, in particular simulator training, is said to have been difficult to achieve because of limited instructors. The consolidation and complete departure of Air Force personnel from Whenuapai will take ten years. A dedicated medical aero evacuation capability has not yet been realised by the RNZAF. Accordingly, the Hercules remains available for aero evacuation, albeit not yet specifically equipped for it. Personnel dedicated to AME missions are not yet available.

ADVANCED PILOT TRAINING CAPABILITY: NZ Ministry of Defence officials report the tender process is well advanced for an Advanced Pilot Training Capability and maintenance support pack-age to replace the five Beech King Air B200 aircraft, for likely intro-


no significant problems with interoperability and effective standardi-sation with other friendly forces, except for the lack of cueing and identification equipment for New Zealands air defence capability.

The 2007/08 NZDF Annual Report also cited consolidation of the NZDF Strategic Plan, consolidation of the organisational capac-ity in Headquarters NZDF, a continuation of projects under the DSI and significant progress with the Defence LTDP as milestones achieved over the year. It said there had been positive growth in the numbers of Regular Force personnel since the DSI commenced in 2005, but conceded this rate of growth had recently slowed, meaning shortfalls in critical trades still existed.

A new initiative was introduced in the form of a Defence Trans-formation Program (DTP), to help ensure the NZDF improved the resource efficiency and effectiveness of internal systems in line with strategic objectives. The DTP is organised into five main areas: hu-man resource management, information technology, defence estate, education and training and logistics.

LTDP-IV & THE ELECTION CAMPAIGN: The second pri-ority under the DSI had been implementation of the major capital projects on the Defence LTDP list. To assess performance in this quest, Phil Goff (now leader of the NZ Labour Party) released 8 October 2008 the latest Update of the Defence Long Term De-velopment Plan (LTDP-IV). This document stated the Ministry of Defence, assisted by the NZDF, was managing 15 major capital ac-quisition projects (seven worth over $100m each), while the NZDF was managing around 400 minor capital program projects.

It further reported the NZ Government had introduced over the year a strategic plan and balanced scorecard tool to measure the NZDFs progress towards its vision. A new Defence Performance Management System was also to have been fully implemented by end-2008. Such process improvements are to be further enhanced by implementation of the recommendations of a recent NZ Treas-ury-led Capital Asset Management review, which aims to have all capital projects supported and resourced under a common whole-of life framework.

NZ Labour released 23 October its defence election policy two weeks prior to the 8 November poll. It said that if returned to gov-ernment, a new Defence White Paper would be published in 2009, to coincide with the mid-point review of the DSI, and the develop-ment of a new post-2012 capital expenditure plan. Phil Goff added Labours version of the new NZ Defence White Paper would also take into account the findings of Australias new Defence White Paper, and submitted that funding for immediate defence needs was provided for under the 10-year LTDP since its last extension to 2012. Operational expenditure (through the DSI) and running to 2017, was said to represent around NZ$8 billion above base-line levels over the subject period.

Goff also listed numerous Labour achievements in terms of highlighting projects that would soon be coming on stream and in-cluding: two new helicopter fleets over the next three years; together with rebuilt Hercules transports; and upgraded Orion maritime patrol aircraft. In the next three years, he said the project Protector maritime fleet would also be in-service, and major upgrading work would be done on the RNZNs Anzac frigates.

Similarly, the NZ Army would be afforded a digitally based command & control system, and a computerised intelligence & reconnaissance system, new night vision equipment and upgraded weapons, and would be replacing its Unimog vehicle fleet. Goff committed Labour to a 12% rise in personnel numbers above 2005 levels (ie: an extra 1,600 personnel), noting we are already two-thirds of the way towards achieving that. By mid-2009, Labour also pitched it would have fully introduced a new military remuneration system, giving personnel an average wage rise of over 10% in FY2008/09. >>> page 16



NATIONAL SECURITY STATEMENT

Trevor J Thomas/CANBERRA

Kevin Rudds quest to bring forward a docu- m e n t t o u n d e r p i n thinking and the development of subsequent policy responses to emergent national security and defence challenges, in many ways mirrors the approach of former New Zealand Prime Minister, Helen Clark, when wiping the slate clean upon first coming to power in 1999.

At that time, Clark called for a new approach to prioritising the asset base & resourcing of the New Zealand Defence Force (NZDF). Clark began that process by fostering a new Defence Policy Framework built upon a substan-tive reconsideration of national security policy objectives.

The Australian Prime Minis-ters first move involves a push to re-engineer the national secu-rity institutional structure, with the nomination of until recently Department of Prime Minister & Cabinet (PM&C) Deputy Sec-retary, Duncan Lewis, as Aus-tralias first National Security Adviser (NSA).

Lewis first task is to recruit a cadre of top operatives to resource the functions of the new Office of National Security (ONS), which has been charged with providing improved stra-tegic direction within the na-tional security community; to support whole-of-government national security policy develop-ment and crisis response; and

Love of China risks miscalculation on Barack Obama presidencyThe Prime Minister, Kevin Rudd, tabled 4 December a document entitled the first National Security Statement to the Australian Parliament. The well overdue presentation makes an initial down-payment on the raft of national security and defence policy undertakings made by Labor during the course of the 2007 election campaign, that will ultimately see: a new Defence White Paper (and accompanying Defence Capability Plan); a new Foreign Policy Statement; a new Counter-Terrorism White Paper; and a first National Energy Security Assessment.

to promote a cohesive national security culture.

Lewis new NSA position is to be established at the As-sociate Secretary level within PM&C to enable direct interac-tion with agency and depart-mental heads. He will also be assisted by a Deputy National Security Adviser, and a PM&C support group that includes the ONS. The existing Office of National Assessments (ONA) will remain, however, as a sep-arate entity within the Prime Ministers portfolio.

The Government is also pro-posing to establish a National Intelligence Coordination Com-mittee (NICC), which Lewis will chair, with the aim of ensuring the national intelligence effort including foreign, defence, security and transnational law enforcement intelligence is effectively integrated and closely aligned with Australias national security priorities.

To begin the process of set-ting new national security pri-

orities, Prime Minister Rudds National Security Statement (NSS) alluded to a future focus on clear and enduring secu-rity interests that transcend the scope of state and territory ju-risdictional responsibilities.

These were subsequently said to include: maintaining Austral-ias territorial & border security; promoting Australias political sovereignty; preserving Austral-ias cohesive and resilient society and the long-term strengths of our economy; protecting Aus-tralians and Australian interests both at home and abroad; and promoting an international en-vironment, particularly in the Asia-Pacific region, that is sta-ble, peaceful and prosperous, to-gether with a global rules-based order which enhances Australias national interests.

Having set the above ground-space, the Prime Ministers NSS went on to outline his view of the enduring principles the Government will use to guide future initiatives to advance Aus-tralias national security interests. In short, these comprised:

(1) Australia will seek, wher-ever possible, to develop self-reliance across the range of relevant national security capa-bilities to ensure an effective contribution to its own secu-rity and to the security of its friends and allies;

(2) The United States alliance remains fundamental to Aus-tralias national security interests both globally, and in the Asia-Pacific region. (3) As Australias security is linked inextricably to the se-curity of the region, regional engagement is crucial. This in-cludes strengthening Australias bilateral relationships and effec-tive engagement in regional in-stitutions. It also means seeking to positively influence the shape of the future regional architec-ture in a manner that develops a culture of security policy coop-eration, rather than defaulting to any assumption that conflict is somehow inevitable.(4) At the global level, Austral-ia is committed to multilateral institutions, and in particular the United Nations, to promote a rules-based international order that enhances Australias secu-rity and economy. We believe those that share the benefits of these systems must also share the responsibilities of support-ing them.(5) National security policy must also be advanced through the agency of creative middle power diplomacy an active foreign policy capable of iden-tifying opportunities to promote Australias security and to other-wise prevent, reduce or delay the emergence of national security challenges.(6) Australia must also apply a risk-based approach to assess-ing, prioritising and resourcing its national security policy across the defence, diplomatic, intel-ligence and wider national secu-rity community.(7) The Commonwea l th must work in partnership with state and territory governments where our national security re-sponsibilities coincide or neces-sarily complement each other in an increasingly interconnected operational environment.

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Prime Minister Rudd went on to declare that Australians today live at the dawn of the Asia-Pacific century. With it comes the potential for a fundamental change in the global order, re-sulting in both economic oppor-tunities and potential security concerns for Australia.

He further considered that while the likelihood of conflict between major powers was cur-rently low, their interactions still largely shape the interna-tional order in which Australia must operate.

Summing up the immediate outlook, Rudd went on to state the Government believes that the future strategic stability of the Asia-Pacific region will in large part rely on the continuing strong presence of Australias closest ally, the United States.

Coming on the cusp of an accelerating global recession driven by the decimation of as-set values and confidence in fi-nancial markets heralded by the collapse of Lehman Brothers in early-October, Rudds pitching of the US as the lynchpin of Australian national security into the future comes with certain risks in underlying assumptions.

One primary risk is that un-der the new Barack Obama-led administration, the US will turn inward in order to concentrate on licking its own wounds, and resulting in a little more distance being put in its relationships with countries not directly linked with the task of economic re-construction.

With the fall into econom-ic recession confirmed by lead market indicators in the run up to Christmas, perceptions that

after 12-18 months of low eco-nomic growth all will miracu-lously return to the situation experienced in the ten years run-ning up to 2008, requires some further examination.

The assumption that the Chi-nese economy even with its US$2 trillion of reserves could ride out the chill wind blow-ing from the United States (and progressively Europe) in the last quarter of 2008 has proved incorrect, as Chinese growth es-timates similarly faltered against an uncomfortable realisation that this powerhouse of global manufacturing remains depend-ent upon substantive demand for exports from the major west-ern economies.

Having emptied their Treas-uries over the past quarter cen-tury into Chinese coffers due to an insatiable thirst for imports, an alternative view to that held by Prime Minister Rudd sug-gests that coming out of the current global financial crisis, western democracies might nat-urally seek to turn foreign and trade policy more inward.

This is likely to occur as countries seek to repair their own economies and foreign trade balances by looking to new markets to expand their own exports, whilst also seeking to moderate the growth of imports not immediately relevant to the economic reconstruction task.

In such a scenario, Rudds assertion the most crucial re-lationship, in East Asia and glo-bally, will be between the United States and China, brings with it some further uncertainty for Australia. The National Security Statement acknowledges that relationships between China, the

US and Japan will affect our security and our economy, and recognises the likely material impact on the wider region of any significant deterioration in the relations between them.

Rudd also noted the rise of India (including, the manage-ment of its relationship with Pakistan), as being an important new factor in the strategic stabil-ity of the Asia-Pacific region. The discussion next moved to conclude the solution for Aus-tralia was to push for the realisa-tion of his personal aspirations for an all encompassing Asia-Pacific Community in 2020, as the most optimal means of strengthening political, econom-ic and security cooperation in the region in the long-term.

The strategy is clever, in that as a second preference option, it provides Rudd with a door to the longer-term pursuit of secu-rity within our region amongst geographically close neighbours should the US economy fail to quickly bounce back from the current global financial crisis.

In such a case, 2008 would come to mark a watershed in the long-term decline of the US economy as a global economic and security powerhouse, hence undermining successive com-fortable assumptions in Aus-tralian defence white papers of continuing US supremacy for the next thirty years.

Of course, there is no dis-cussion by Rudd in his national security statement in regard to the emergence of any alterna-tive eventualities in global politi-cal and economic dynamics (ie: such as an inwardly-focused US electing not to sustain in the longer-term its role in the Asia-

Pacific, and thus failing to deliv-er the means by which Australia underpins its own security), and this is perhaps the 4 December Statements greatest weakness.

Whilst nothing is ever cer-tain in politics, current statistics and demographic trends suggest that once Barack Obama as-sumes the US Presidency on 20 January 2009, he is pretty well guaranteed to serve a two-term Presidency. After that (ie: 2016), alternative politics Republicans are likely to struggle to regain a majority vote, as global dy-namics will have substantively changed.

Current economic difficulties and Obamas eventual responses will not only have a profound impact on American domestic politics, but also on the shape of the world. Current births, deaths and marriages data suggests that white voters will become pro-gressively outnumbered by black and ethnic minorities, thus turn-ing upside down the US political dynamic.

Subsequent pres ident ia l poll analysis indicates that on 5 November, the white vote was down to 74%, as against 90% when Jimmy Carter was elected US President. Of white voters, 55% were found to have backed presidential hopeful John Mc-Cain, with 43% falling in behind Obama (ie: support was effec-tively split). Black and ethnic mi-nority voters accounted for 26% of the national vote, up from 19% as recently as 2000.

Significantly, the black vote went 90% to Obama, along with some two-thirds of the Hispan-ic and Asian vote. Obama also picked up 66% of the votes of

>>> page 23

CHANGING PRIORITIES IN WASHINGTON?: Former special forces commander, Duncan Lewis (far L) will become Australias first National Security Adviser as President George W Bush (L) hands over to Barack Obama (R) on 20 January. Obamas rise to power has been fuelled by a huge wave of political support from blacks, hispanics and other minorities, with many holding the view they missed out on gaining an equitable share of the prosperity of the last decade. Political pressures from such groups for a righting of such perceived injustices at a time when the United States is also looking to rebuild its economy through the exploitation of new growth markets, may lead the new president down the path of declaring a new age of economic opportunity for America in partnership with Africa and Latin America ADoD, DFAT & DEMOCRAT CAMPAIGN PHOTOS

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Developments at the base include an upgrade of the existing main runway and taxiways, development of new hangars for the new light and utility helicopter fleets and the construction of a new passenger and freight terminal, including offices for NZ Customs, Biosecurity, and Immigration. The NH90 and A109 fleets will arrive at RNZAF Base Ohakea in 2010.

P-3K ORION UPGRADES: The P-3KII Orion Upgrade Project, specifically addressing sensor and communication equipment inade-quacies, is now running approximately nine months behind schedule, with the project (ie: the whole fleet) not expected to be completed until 2011/12. Equipment limitations have meant only a basic level of anti-submarine warfare capability was achieved in 2007/08. The first P-3 aircraft receiving mission management, communication, and navigation systems upgrades is scheduled to be delivered in 2009.

According to official documents, the P-3 fleet currently has no dedicated self-protection equipment, hence the push to have it fitted as soon as the upgraded P-3 fleet is delivered. The P-3s can pres-ently provide targeting information, but do not have an air-to-surface weapon capability. The timing of this project also depends on the completion of the P-3 mission systems upgrade and will be consid-ered in coordination with the P-3 Self-Protection project.

The 2007/08 Annual Report stated the RNZAFs Maritime Patrol Force (MPF) of six P-3K Orion aircraft was fully prepared for NZ Exclusive Economic Zone (EEZ) and South Pacific Ocean search and rescue and regional surveillance, but only partially prepared to contribute to collective global security operations. It identified the need for a project to acquire air-to-surface weapons for the P-3Ks, but work has yet to start on such an acquisition.

P-3K aircrew numbers and experience was deemed a major prob-lem with a major regeneration program under way to increase crew numbers by 20% in 2008. Of the fleet of six, two P-3K Orion air-craft are said to have been available for deployed military tasks dur-ing 2007/08. One was available for maritime search and rescue. The MPF flew 2,329 hours (from the annual target of 2,550), with the marginal under fly due to delays in conducting the acceptance test and evaluation flying on the upgraded P-3KIIs.

M A R I T I M E P R O J E C T S

PROJECT PROTECTOR CAPABILITY: The major challenge facing the Royal New Zealand Navy (RNZN) in 2009 is said to be achievement of the introduction into operational service of the seven new ships being acquired under the $500m Project Protector. One multi-role vessel (MRV), two offshore patrol vessels (OPVs) and four inshore patrol vessels (IPVs) are being acquired to replace

duction into service by 2010. There is a view the 17 Aermacchi jets decommissioned by the Clark Labour Government in 2001 (yet well maintained in storage) could be brought back into service by the new Government, to work with the army and navy.

In November 2007, former Defence Minister Goff said the Aermacchis were not suitable to replace the air forces King Air advanced pilot training aircraft, nor could they provide full training capabilities for the upgraded C-130H Hercules, P-3K Orions, 757s or the new helicopter fleets. New NZ Defence Minister, Dr Wayne Mapp has since indicated that the Nationals new defence white pa-per, to be published in 2009, would address the need to retain some level of jet training capability, although Prime Minister Key in early-December dismissed the possibility as extremely unlikely.

NZDF MEDIUM UTILITY HELICOPTERS: The NZ De-fence Force has a resident project team in France monitoring the NH90 NZDF Medium Utility Helicopter Capability development and manufacturing program. Eight NH90s were ordered in 2006 for NZ$771m, including logistics & support, spare parts project costs, training and extra equipment. The first (of nine) aircraft for frontline military and civil operations is presently undergoing assembly, and NH Industries is expected to undertake the first test flight in ear-ly-2009. The NZDFs first NH90 is scheduled to enter into service in 2010, with full operational capability to be achieved by 2013.

In a related development, the Governments of New Zealand and Germany signed 4 November a Status of Forces Agreement setting out conditions governing the temporary deployment of NZDF per-sonnel to Germany in early-2009, to undertake training to prepare for the introduction into service of the new NH90 helicopter fleet. Germany was the first country to receive NH90 helicopters of a vari-ant similar to NZs, and is also the first to introduce it into service. As part of the training arrangement, Germany will send two heli-copter pilots to NZ to learn how the NZDF operates its aircraft and trains its personnel.

TRAINING/LIGHT UTILITY HELICOPTERS: A resident NZ Defence project team has been established in Italy to monitor the AgustaWestland A109 light utility helicopter development and manufacturing program (and the delivery of a flight training device and spares support), all scheduled to enter service in 2010. The five Training and Light Utility Helicopters replacing the Air Forces fleet of Sioux helicopters will provide air transport, search & res-cue, aero-medical evacuation, disaster response, and surveillance & counter terrorism support.

The A109 chosen for its ability to operate at sea & to train SH-2G Seasprite pilots will form part of No.3 Squadron at Ohakea Air Force Base, which has started a NZ$129 million up-grade to its facilities (ie: announced in December 2007 by Phil Goff).


RECAPITALISING THE NAVY: With its ageing Leander-class frigates all but ready for the scrap yard, but having confirmed it would not purchase a third Anzac-class frigate from Australia, the Clark government needed to rapidly bring forward a recapitalisation of the Royal New Zealand Navy, given wholesale obsolescence of the extant fleet right down to its inshore patrol vessels (far L). This was achieved through project Protector (L), which has seen the construction of a new multi-role vessel (R), two new offshore patrol vessels (far R), and four new inshore patrol vessels (IPVs). ADBR, TENIX DEFENCE & NZ MoD PHOTOS & IMAGES


three Leander-class frigates, one militarised roll-on/roll-off ship (the former HMNZ Ship Charles Upham) and five obsolete inshore patrol vessels.

Naval Patrol Forces (NPF) rationalisation had seen the remaining inshore patrol craft (IPC) HMNZ Ships Wakakura & Kiwi op-erated for the first five and a half months of 2007/08 subsequently decommissioned on 11 December 2007 at the Devonport Naval Base. Sister ships, HMNZS Hinau and HMNZS Moa were latterly decommissioned on 23 January 2007, with the fifth IPC, HMNZS Kahu, remaining as the Navigational & Seamanship Training Ship, and as a backup MCM Support Vessel.

The NPF was then to be supplemented by the first two new IPVs Rotoiti & Hawea and the first OPV Otago, by the end of the 2007/08 period. However, this did not eventuate due to delays with their delivery from the former Tenix Defence Systems (now BAES Systems Australia). The Otago was supposed to have been delivered in November 2007, followed by the Wellington in May/June 2008. Of the IPVs, HMNZS Rotoiti was to have been delivered in Sep-tember 2007, followed by HMNZS Hawea in December 2007, HM-NZS Pukaki in March 2008, and HMNZS Taupo in June 2008.

Official documents indicate HMNZS Otago was intended to have been available for up to 100 days at sea, and the Wellington for 20 days at sea. Similarly, the four IPVs Rotoiti (160 days), Hawea (100 days), Pukaki (55 days) and Taupo (35 days) were also sup-posed to have spent time at sea. Accordingly, confirmed delivery dates for the project Protector fleet remains uncertain.

The entire project Protector fleet, including HMNZS Canter-bury, is in parallel being upgraded to the Offshore Systems ECPINS (Electronic Chart Precise Integrated Navigation System) M system, which is also being extended throughout the RNZNs training facili-ties. A contract option for the system was exercised 26 August 2004 to achieve high level compliance with the NATO Warship Electronic Chart Display Information System (WECDIS) standard.

On 17 November 2008, Dr Mapp publicly conceded the six undelivered project Protector ships appeared to have significant problems. Safety issues relating to the ships sea boats had prevented them being certified by Lloyds. This meant 70 RNZN crew stationed in Melbourne with the new OPVs had to be sent back to New Zealand, and were not expected to return to the Williamstown dockyard until the ships were considered ready to enter into service. Dr Mapp added a suspicion the HMNZS Otago was 100 tonnes overweight. The vessels had been strengthened for ice-breaking operations in the Southern Ocean and Ross Depend-ency a key Government requirement but extra weight might now prevent them from undertaking such missions.

Negotiations in regard to the above with BAE Systems (BAES) Australia are now expected to delay the ships delivery by six months, with some of the vessels ready to enter service by end-March 2009. Dr Mapp indicated at the time it was a priority for the Ministry of Defence (MoD) to establish how long the problems would take to be fixed, how much it will cost and whose responsibility it was. Despite being designed for Antarctic waters, the Minister further confirmed the NZDF did not have plans to station the MRV or OPVs in the Ross Sea to monitor Japanese whaling activities, which currently are being firmly opposed via regular Orion surveillance flights and the provision of intelligence updates.

Of the project Protector fleet, HMNZS Canterbury is the only vessel in active service. Official documents indicate that since its 12 June 2007 commissioning, the multi-role vessel has been undergo-ing an introduction into service and operational release period to generate its amphibious sealift capability. The ship and crew are not expected to fully achieve all output performance targets until the end of FY2008/09, however.

Expenditure of $20m was required to buy new rigid-hull inflat-able boats (RHIBs), additional ballasting to reduce the ships mo-tion in heavy seas, and modifications to the propulsion gear, in the aftermath of the findings of an independent review (published 12 September) by John Coles, the former chief of the British MoDs Warship Support Agency. The review was prompted by two incidents on 10 July and 5 October 2007 (that caused the death of a member of the ship), both involving damage to the RHIBs as they were being deployed in heavy seas.

Coles report exposed serious weaknesses in NZ MoD acquisition procedures, stating the procurement was constrained ... by the initial choice of ship design, has (since) been managed to get the ship into service as soon as possible, (and) has been characterised by shortcomings in project management and governance and collective wishful thinking.

The review team also judged that the ship is unlikely to meet all of the requirements of the delivery contract awarded to Tenix in July 2004, and that remedial work would be necessary to allow the Canterbury to perform military tasks. It went on to state that even after the improvements were made to the vessel, the RNZN would have to impose operating limitations on the ship, especially in higher sea states.

Reference was made to former Defence Minister Goff having repeatedly stated that the [building of] Canterbury [by Tenix] repre-sented a bargain. National policy statements and Dr Mapp had con-sistently expressed concern that choosing a one-off model could lead to unproven risks, adding that the Coles Report into the acquisition of HMNZS Canterbury was a damning indictment of the former Governments defence procurement processes.

Dr Mapp added, there was a perfectly suitable military design to select that is (already) in-service in the Dutch, Spanish and Royal navies, but the project team opted for an unproven, one-off design instead. New Zealand had first identified its requirement for a multi-role ship able to deploy army units around the South Pacific region to perform sealift, logistic support, and relief tasks as far back in 1987 as part of an earlier defence review.

ANZUS (MINUS THE US) ALLIANCE: In May 2008, the New Zealand-led exercise Joint Kiwi 08 sought to improve interoperabili-ty between the New Zealand and Australian Defence Forces. A Com-bined Joint Task Force (CTF) was raised consisting of the Australian Landing Platform Amphibious (LPA) warship, HMAS Manoora, an amphibious command element from HMNZS Canterbury, and a NZ Land Forces Combat Team component provided by Queen Alexandras Mounted Rifles & Bravo Company, 2/1 RNZIR. The exercise, held off the east coast of NZs South Island, was based on a fictitious insurgency and involved amphibious beach landings and withdrawals designed to increase joint preparation between the two countries for emergency disaster relief and peacekeeping.

A meeting in Canberra mid-May between the Australian Minister for Home Affairs, Bob Debus, and the former NZ Customs Minis-ter, Nanaia Mahuta, is reported to have resolved to enhance border security through more effective cooperation targeting criminal net-works, maritime security threats and intellectual property theft.

According to the two Ministers, each nations Customs agencies are now working on joint intelligence and investigation responses to identified border risks, including those posed by criminal networks common to both countries. Australian and NZ Customs have since signed an agreement t

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