Reports and Publications

• Annual Report 2008
  • Contents
  • Part 1: Overview
  • Part 2: Statement of responsibility and audit report
  • Part 3: Statement of service performance
  • Part 4: Departmental financial statements
  • Part 5: Non-departmental statements and schedules
  • Part 6: Other information

Within this section

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

Annual Report for the year ended 30 June 2008

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Part 1: Overview

Secretary of Defence's overview

Introduction

The 2007/08 period was another busy one for the Ministry. During a period of organisational change and continued high operational tempo steady progress was made in re-equipping the New Zealand Defence Force (NZDF) with new and upgraded capabilities.

Amid a sometimes challenging environment, the variety of our achievements, outlined below, demonstrates the integrity and hard work of our staff across the full range of policy and project tasks we have undertaken. Our work reflects the Ministry’s core responsibilities to provide policy advice, manage equipment procurement, and undertake audits and assessments of the NZDF and the acquisition activities of the Ministry.

We will continue to work closely together with the NZDF on capability acquisition, defence deployments and strategic planning in the coming year.

Key developments

• advancing the upgrades of existing aircraft – Boeing 757, C130H and P3 Orion in separate projects
• managing significant projects under contract in particular the medium utility and training/light utility helicopter projects
• progressing key projects on the Defence Long-Term Development Plan (LTDP), in particular the ANZAC frigates projects, including the platform systems, self-defence and close-in weapon system upgrades
• managing issues arising during the introduction into service of HMNZS Canterbury and their impact on the acquisition of the remaining vessels of the Project Protector fleet; staffing a ministerally directed independent review of the safety and functionality of HMNZS Canterbury
• working with Australia to achieve timely and well coordinated responses to instability in the South Pacific and Timor-Leste; contributing to the enhancement and evolution of security architecture in the Asia-Pacific; and sustaining old and developing new bilateral defence relationships with the countries of the Association of South-East Asian Nations
• enhancing longstanding defence relations with the United States and Canada; strengthening partnerships in Asia including the development of a new relationship with Vietnam, more substantive cooperation with Japan and the establishment of a formal defence dialogue with China
• strengthening dialogue with NATO, especially on Afghanistan issues
• contributing to the development of the Army Transformation Programme
• leading work on the development of strategic management support models for the Ministry and NZDF
• completing 17 assessment and audit reports of the NZDF and of the Ministry’s major equipment procurement activities.

Relationships

A strong and mutually reinforcing relationship between the Ministry and the NZDF is critical to the implementation of the Government’s defence policy.

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 NZDF flow from that policy; and that there is informed, independent and autonomous evaluation of any function of the Defence Force. In effect, all these functions are different ways 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, and strengthening and adjusting it as circumstances require, is a priority for the Ministry. Increasing information sharing between the Ministry and the NZDF on acquisition projects, for instance, is an area we have been proactively working to improve.

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

The roll-out of the Capital-Asset Management review has been a particular focus of our interaction with Treasury. We worked with the Office of the Auditor-General as it produced an interim review on the progress of defence acquisition projects. We have taken account of the Auditor-General’s comments in the preparation of this Report.

Our relationship with the Ministry of Foreign Affairs and Trade remains particularly close. We have provided Defence-related advice on many MFAT-led issues, such as arms control and disarmament, and sought to ensure that defence diplomacy, operations and capability acquisition complement New Zealand’s wider foreign policy and security goals.

The Ministry of Defence has continued to facilitate effective communication between Defence and New Zealand industries able and willing to provide appropriate goods and services to the Defence Force. We continued to provide support to the Defence Industry Committee of New Zealand (DICNZ).

Organisational capacity

The Ministry of Defence is led by the Secretary of Defence. The Ministry consists of the following divisions: Acquisition, Corporate, Evaluation, Finance and Policy and Planning. The Ministry's staff numbers at 30 June 2008 were 57. At that date there were offshore project offices in Australia, Canada, France, Italy and the United States of America.

The past year has been a challenging one for the Ministry with a number of staff, including two deputy secretaries, taking up new opportunities elsewhere. This has necessitated recruiting a number of new staff. To do so, the Ministry has needed to adapt to the challenges of a tight labour market.

Looking ahead

The coming year will be a very busy one for the Ministry, with key projects underway in all divisions. We are planning for the return of the upgraded Boeing 757s and C-130H aircraft, the delivery of the Project Protector Patrol vessels, work on a wide range of projects including the NH90 medium utility helicopters, and the Agusta 109 training light utility helicopters, and the ANZAC frigates’ platform systems and self defence upgrades.

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 NZDF, but also in domestic agencies and overseas.

Balancing the large number of acquisition projects proceeding during this period with the Ministry’s other responsibilities will be challenging. I am confident, however, that the Government’s vision of a sustainable, re-equipped defence force will continue to be realised.

John McKinnon
Secretary of Defence
30 September 2008

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