Defence Minister Mark Burton said today that he commenced work 12 months ago with his officials on fixing long-standing problems within the Ministry of Defence and the Defence Force.

Mr Burton was responding to the release of the Auditor-General's report examining the acquisitions by the Ministry of Defence. It found significant problems relating to structural relationships, defence planning and accountabilities.

"The report is, frankly, damning of much of the early process and procedures surrounding these two major defence acquisitions, particularly between 1997 and 1999. It also criticises the high level of dysfunctionality between the various arms of the defence force. These problems, however, are fixable and they are being fixed," Mr Burton said.

"The report points to long-standing problems, but there is little point in attributing blame. The problems need to be put right. That is what I am working on as a matter of the highest priority, together with the Secretary of Defence, the Chief of Defence Force, and the individual service chiefs.

"In terms of concrete measures already established by this government, we have established a new Joint Headquarters to achieve better structure, coordination and to streamline the relationships at an operational level.

"The Defence Policy Framework released in June last year and the capability announcement made in May this year give the Ministry of Defence and the Defence Force a clear forward direction for the future of New Zealand's armed forces.

"I have also worked with the Secretary of Defence to adopt a more rigorous procedure in terms of Cabinet oversight of major defence acquisitions. The current Cabinet is much more involved in the process.

"There are some pleasing aspects in the report, particularly in terms of the fundamental question: was the LAV III acquisition sound? The report says that the LAV III was the vehicle that most closely matched the specified requirements.

"Independent UK-based consultants, HVR, concluded that the LAV III "was such a technically superior vehicle that there was little point in running a tender".

"The report also found compelling evidence to support the Cabinet's decision to purchase 105 vehicles up front: "…clearly the purchase of 105 vehicles now…. is the cheapest way of obtaining this capability."

"It is also clear that in US dollar terms, the purchase price has remained relatively stable.

"I and my officials will analyse closely the report over the coming days. I also intend to meet with the Auditor-General to discuss with him in more detail his recommendations," Mr Burton said.

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