Reports and Publications

• Annual Report 2007
  • Contents
  • Part 1: Overview
  • Part 2: Statement of responsibility and audit report
  • Part 3: Departmental financial statements
  • Part 4: Non-departmental schedules
  • Part 5: Other information

Photo of Secretary of Defence, John McKinnon.

Within this section

• Introduction
• Key achievements
• Relationships
• Organisational capacity
• Looking ahead

Annual Report for the year ended 30 June 2007

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Part 1: Overview

Secretary of Defence's overview

Introduction

The 2006/07 period has been a busy one for the Ministry, reflecting the Government’s major programme of reinvestment in defence capabilities and the consistently high operational tempo of the New Zealand Defence Force. The diversity of our key achievements, some of which are outlined below, highlights the broad range of policy and project tasks we have undertaken while also dealing with organisational change. Our work reflects the Ministry’s core responsibilities to provide policy advice, manage equipment procurement, and undertake audits and assessments of the performance of the New Zealand Defence Force and the acquisition activities of the Ministry.

As always, our relationship with the New Zealand Defence Force has been integral to our work. Facilitated by our joint move to the new Defence House, we value the strong partnerships that characterise our interaction across all defence and corporate activities.

Key achievements

Key achievements of the Ministry in 2006/07 were as follows:

• progressing key projects on the Defence Long-Term Development Plan (LTDP), including NH-90 helicopters, C-130H Self-Protection, Light/ Training Utility Helicopters, and the ANZAC Close-In Weapon System
• managing significant projects under contract such as Project Protector, P-3 mission system upgrade, C-130H life of type extension and B757 conversion
• leading the Defence Capital Asset Management Practice Review, completed with the New Zealand Defence Force
• assisting the New Zealand Defence Force to develop its organisational capability and infrastructure through the Defence Sustainability Initiative and the Resource Allocation and Management Programme
• achieving the final delivery of the Light Operational Vehicles for Army, and the delivery of the first Protector ship, the multi-role vessel HMNZS Canterbury
• working with Australia to respond to instability in the South Pacific and Timor-Leste
• reinvigorating longstanding relations with the United States, the United Kingdom and Canada, strengthening partnerships in Asia and building links with the North Atlantic Treaty Organisation
• completing 15 assessment and audit reports of the New Zealand Defence Force and of the Ministry’s major equipment procurement activities
• successfully relocating the Ministry to its new premises on schedule on 19 February 2007.

Relationships

The Ministry of Defence is assigned a number of specific functions by the Defence Act 1990. These functions are designed to ensure that New Zealand’s defence policy is formulated on the basis of comprehensive advice, and from a civilian as well as a military perspective; that the capabilities and use of the New Zealand Defence Force flow from that policy; and that there is informed autonomous evaluation of any function of the Defence Force. In effect all these functions are different means of ensuring that the Defence Force is able to undertake efficiently and effectively the tasks and missions assigned to it by the Government. The execution of these functions, whether in respect of defence deployments and capability acquisition, strategic planning or corporate structures, necessitates a close and robust working relationship between the Ministry and the Defence Force. Maintaining this relationship in good order, and strengthening and adjusting it as circumstances require, is a priority for the Ministry.

Maintaining strong relationships with the central agencies has also been a focus for the Ministry. We have worked closely with the Department of Prime Minister and Cabinet, the Treasury and the State Services Commission to facilitate the alignment of Defence policy and capabilities in support of New Zealand’s broad security objectives.

Over the past year a number of capability projects have highlighted the emerging whole-of-government approach to securing New Zealand’s borders and resources, including the gradual introduction into service of the Project Protector fleet. In response to this development, the Ministry has strengthened its contacts across the broad spectrum of government agencies involving Customs, the National Maritime Coordination Centre, the Ministry of Fisheries, Police, the Department of Conservation and the New Zealand Agency for International Development.

Our relationship with the Ministry of Foreign Affairs and Trade remains particularly close as we seek to ensure that defence diplomacy, operations and capability acquisition complement our wider foreign policy and security goals.

The Ministry of Defence will continue to facilitate effective communication between Defence and New Zealand industries able and willing to provide appropriate goods and services to the Defence Force. It will provide support to the Defence Industry Committee of New Zealand.

Organisational capacity

The Ministry of Defence is led by the Secretary of Defence, John McKinnon. The Ministry consists of four divisions: Acquisition, Corporate, Evaluation and Policy and Planning. The Deputy Secretaries of these divisions are: Bruce Green (Acquisition), Zane Kidd (Corporate), Merus Cochrane (Evaluation) and Chris Seed (Policy and Planning). The Ministry’s staff numbers at 30 June 2007 were 60.

The 2006/07 period saw the Ministry move premises from Stout Street to the purpose-designed building in Aitken Street, which we share with the Defence Force and the New Zealand Security Intelligence Service. Officially opened by the Prime Minister on 28 March 2007, the building is energy efficient, with a layout designed to encourage communication and productivity.

Permanent staffing levels in the Ministry have been stable over the past year, with two project staff members relocated to France to oversee the Crown's interests in the NH-90 helicopter project. The Ministry’s new Strategy and Capability Analysis Branch is now close to full strength. This was established in 2005 following a recommendation of the Defence Capability and Resourcing Review. Consisting of a multi-disciplinary team of senior specialist advisers under the leadership of a director, the main purpose of the branch is to provide technical analysis for a range of perspectives that contributes to the development of robust policy and purchase advice by the Ministry.

Looking ahead

The coming year promises to be another busy one for the Ministry, with key projects underway in all divisions. It will see the majority of the Protector fleet delivered to the New Zealand Defence Force, as well as the return to New Zealand of the upgraded Boeing 757 aircraft and the first of the upgraded C-130H, all currently overseas for upgrade or conversion.

The Government’s requirement for timely and accurate policy advice on defence deployments and capability development will ensure that analysts remain engaged with key counterparts, particularly in the New Zealand Defence Force, but also in domestic agencies and overseas. Our efforts in these areas will be enhanced as the Strategic Capability and Analysis Branch settles in.

The Ministry shares the country’s pride in the successes of the New Zealand Defence Force and is committed to working together to implement the Government’s programme of reinvestment to renew and rebuild its defence capabilities. Recognising the knowledge, skills and enthusiasm in the Ministry, I believe that we are well placed to do so.

John McKinnon
Secretary of Defence
21 September 2007

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