Annual Report for the year ended 30 June 2009
Part 1: Overview
Secretary of Defence's overview
Introduction
The 2008/09 year saw the Ministry manage a wide range of acquisition projects, staff a large number of international linkages, whilst simultaneously embarking on the 2009 Defence Review. This review will be a comprehensive examination of all aspects of defence and will provide an opportunity for the public to express their views.
The achievements outlined below reflect the dedicated efforts of Ministry staff to meet the Ministry's core responsibilities of providing policy advice, managing equipment procurement, and undertaking audits and assessments of the New Zealand Defence Force (NZDF) and the acquisition activities of the Ministry.
The 2009 Defence Review
The 2009 Defence Review was initiated by the Government in line with pre-election commitments. Terms of Reference for the Review were promulgated on 21 April. A three person advisory panel was appointed at the same time and a public consultation document was released by the Minister of Defence and the Associate Minister of Defence on 26 June.
This will be the first full defence review undertaken since 1996/1997. The Ministry is tasked with producing a defence assessment as prescribed by Section 24 (2) (c) of the Defence Act. Work on this is well under way with the support of the NZDF and in close collaboration with other government departments and agencies in the wider security sector. Resources have been reallocated within the two defence organisations to support this major project.
Within defence ten work streams have been established. The leaders of three are external to defence. The first body of work has covered the strategic environment, policy objectives, capability options and funding levels. Progress to date makes me confident that the Ministry will be able to meet the reporting deadlines set down by the Government.
Acquisitions
One of the Ministry's principal functions is the procurement and delivery of military capability to the NZDF. For the Royal New Zealand Air Force (RNZAF), the highlight in the year under review was the completion of the upgrade and conversion of the two Boeing 757 aircraft. Delivery was taken of the first aircraft in August 2008 and of the second in November. Both have proved themselves in service throughout the remainder of the year, in transporting troops, VIPs and freight. Progress has been slower on the P3 and C130 upgrade projects. Challenges with software integration have proved to be the main obstacle to timely completion of the respective prototypes, but both are expected to be complete by the end of 2009. The helicopter projects in Europe are well underway, with the first flight of the first NH 90 Medium Utility helicopter taking place in May 2009.
For the Royal New Zealand Navy (RNZN), the Ministry engaged in intensive negotiations with British Aerospace Engineering (BAE) Systems Australia Defence Pty Ltd on remedying deficiencies in HMNZS Canterbury (BAE took ownership of Tenix Defence Pty Ltd, the original contractor for Project Protector, in June 2008). Significant progress had been made by the end of the year. Canterbury has been engaged in testing and exercising its capabilities in a wide range of tasks in New Zealand and Pacific waters. At the same time the four inshore patrol vessels were delivered to the RNZN, sailing at two week intervals in April and May to Devonport from the yard at which they were built in Whāngarei . It is expected that the remaining two ships of Project Protector (the two offshore patrol vessels) will be delivered to the RNZN by the end of 2009.
Activity for the New Zealand Army was less prominent but the Ministry received tenders for gap crossing equipment, currently under consideration, and continued work for an appropriate life cycle contractor support agreement for the medium range anti-armour weapon.
The Ministry has worked though the year with the office of the Auditor-General and the NZDF to improve reporting on the progress of major defence acquisition projects.
We have 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).
Evaluation
The Ministry's responsibility to audit any function of the NZDF and the procurement function of the Ministry itself was discharged through the publication of 15 evaluation reports. Action in response to the recommendations in those reports is monitored through twice yearly meetings of the Defence Evaluation Board.
The wider world
When the NZDF deploys overseas it almost invariably does so with other allied or partner Defence Forces. The Ministry supports government decision making on these deployments and the wide range of international defence relationships within which they take place. In the course of the year several deployments of New Zealand forces were renewed.
Our closest defence relationship is with Australia, and reflecting this intimacy there were five ministerial level meetings with Australia in the course of the year. These provided an opportunity for New Zealand to be briefed on Australia's defence white paper, published in May 2009.
New Zealand's defence relationship with the United States was focused on our deployment with the International Security Assistance Force (ISAF) in Afghanistan but extended into a range of other mutually beneficial areas. In the same context we strengthened dialogue with North Atlantic Treaty Organization (NATO), especially on Afghanistan and in particular the development of the NATO ISAF comprehensive plan.
In Asia the standing of our defence relationship with Singapore was enhanced with the signing of an Arrangement on Defence Cooperation. There was a wide range of defence interaction with the other Asian defence forces. The Ministry contributed to New Zealand's successful hosting of Exercise Maru, a Proliferation Security Initiative activity held in Auckland in September 2008.
Organisational capacity
The Ministry of Defence is led by the Secretary of Defence. In the course of the year new appointments were made to head three of the Ministry's five divisions: Acquisition, Finance and Policy. As at 30 June 2009 the Ministry had 61 staff in place. The Ministry has not been immune from the effects of the difficult economic climate, and has necessarily restrained some recruitment, especially in the policy advice area. Replacement of departing staff has taken place only where this has been necessary to maintain organisational capacity.
Looking ahead
The defence review and white paper, for which the Ministry is the lead agency, will be the principal focus for the Ministry in the coming year. But delivery of capability and advice on deployments will continue to feature as the Ministry fulfils its statutory responsibilities.
John McKinnon
Secretary of Defence
30 September 2009
