Home' Asia Pacific Defence Reporter : APDR June 2015 Contents 44 Asia Pacific Defence Reporter JUNE 2015
NZ DEFENCE BUDGET
The militaries of Australia and New Zealand are separate
but closely aligned in the capabilities that they share.
The NZ economy has a GDP of $US183b ($A230b),
growing annually at 3.50%, far faster than the inflation
rate of 1.1%. By comparison, Australia has a GDP of
$A1,675b, growing annually at 2.60% with an annual
inflation rate of 1.5%.
So how do the two countries compare in terms of
defence budgets for 2015-16?
NZ has budgeted $3.07b ($A2.85b), down $0.01b
on the previous year, and representing 1.2% of GDP.
Australia has budgeted $A31.9b, a rise of $A2.7b on
the previous year, and amounting to 1.88% of GDP.
Enough of the high level numbers, what does this NZ
Defence Budget 2015 fund?
“Budget 2015 confirms that investment in the
New Zealand Defence Force remains a priority,”
Defence Minister Gerry Brownlee said. New operating
funding of $264 million over four years for the New
Zealand Defence Force continues the Government’s
commitment to deliver long-term funding certainty to
our armed forces.
Budget 2015 includes $46.5 million in new operating
funding as well as $106 million in capital from NZDF’s
balance sheet for new equipment. This investment is
aimed at enhancing soldiers’ safety on the battlefield.
“This funding allows the Defence Force to concurrently
undertake domestic, regional and international security
tasks, giving it greater flexibility in the response options
it can provide to the Government as we react to
changes in the security environment,” Mr Brownlee said.
Budget 2015 also includes $192 million of
operational funding and $25.4 million toward the cost
of the two-year Building Partner Capacity mission to
train the Iraqi Defence Force.
In addition, new contingency funding of $56.3 million
over the next four years is provided for new military
procurement projects, contingent on Cabinet approval.
Meanwhile, “To deliver on the outcomes of the Defence
Mid-Point Rebalancing Review, the Government has
signalled an intention to replace billions of dollars’ worth
of equipment over the next 15 years.
“Work since the Review has confirmed that a number
of changes to capability procurement are needed to
stay on top of a large programme plan that includes
increasingly sophisticated capabilities and equipment.
“The extra funding will ensure New Zealand buys
equipment that is fit for its needs, and acquires it
on time, to budget, and to the specifications the
Government has agreed,” Mr Brownlee said. ¢
NZ MINISTRY OF DEFENCE
NZ has always worked to smart procurement
procedures, while continuing to maintain NZ’s position
in the defence world with strong international relations
and widely respected capabilities. With just 74 staff
the MoD costs the taxpayer $16.734m for policy
advice, evaluations, audits, assessment and project
management including $7.857m for managing NZDF
capability procurement or refurbishment of $222.795m
in FY2015-16. Assuming all 74 staff contribute to
procurement and sustainment, this amounts to an
average of just over $3m each.
What a contrast with Australian DMO’s 509,000
public servants, about 80,000 of them managers, who
manage a procurement and sustainment budget of
$A12.7b, or on average just $A2,500 each. No wonder
the First Principles Review called for the abolition of
DMO and its functions incorporated elsewhere inside
$1.99 billion is going to the three armed services: the
Royal New Zealand Navy's (RNZN) budget increases
3.8% to $492 million; the Army's budget rises 2.3%
to $742 million; and the Royal New Zealand Air Force
(RNZAF) receives 2% more with $759 million.
Navy projects funded include $0.783m in 2015-16
for a maritime sustainability capability ship as a
replacement for the supply ship HMNZS ENDEAVOUR
which reaches the end of its 30 year life in April 2018.
Platform upgrades to the two ANZAC frigates recently
completed include new engines, integrated platform
management systems, high volume air conditioning
and some stability restructuring. These frigate are
commencing their combat system upgrades in Canada
with $158m spent in 2014-15 and now estimates of
$105m in 2015-16, then $115m and $42.5m in the
following two years.
Army projects include $45.6m, $34.2m and $25m
in each of the next three financial years for the network
enabled Army program.
The RNZAF gets $7.12m to complete its pilot
training capability project, with training of new pilots on
the T-6C aircraft and ground systems to commence at
the start of 2016. The RNZAF also own the SH-2G(I)
maritime combat helicopters currently being delivered
and introduced into service. Budget estimates to
complete this project include $40m in 2015-16 and
$12.2m in 2016-17. That will mean the RNZN will
have 8 modern helicopters and a full motion simulator,
owned and maintained by the RNZAF, in place of the
5 existing 15 year-old Seasprites which have been sold
These project numbers are deceptively low, mainly
because there are few milestones occurring in 2015-
16. The completion of Defence White Paper 2015 will
identify the NZDF’s requirements for the next 25 years
and give rise to a Defence Capability Plan which, over
the next 10 years, will see the start of investment in
new Navy frigates, maritime patrol aircraft replacements
for the 6 recently upgraded P-3K2 Orions, and new
strategic and tactical airlift aircraft in place of the Boeing
757s and C-130LEP Hercules. Possibly also some
unmanned aerial vehicles for maritime reconnaissance.
An overview of this Defence Budget 2015 suggests
it is “steady as she goes” with no major new initiatives,
but this current state of affairs will not last as the need
to start planning replacement of sophisticated air
and sea platforms about a decade ahead will require
provisioning of future funding to start soon.
The NZDF, highly respected by its allies, will continue
to pull its weight nationally, be a valued ally of Australia,
offer vital support to its South Pacific neighbours and
contribute to the rule of law more widely. ¢
PAPER 2015 PUBLIC
The New Zealand Government has committed to
deliver a new Defence White Paper (DWP) by the end
Announcing the public consultation phase Defence
Minister Gerry Brownlee said “I encourage New
Zealanders to take part in the consultations from 5
May to 22 June, as it’s important that a diverse range
NEWS FROM ACROSS THE TASMAN
GEOFF SLOCOMBE // NEW ZEALAND
28/05/2015 3:45 pm
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