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Prime Minister Asked To Defer Defence Decision

Prime Minister Asked To Defer Cabinet Defence Decision

New Zealand First has called on the Prime Minister to defer tomorrow's Cabinet discussions on Defence spending and to initiate an independent inquiry into all current Defence Force procurement projects.

Defence Spokesperson, Ron Mark, claimed tonight that the inquiry is essential to ensure New Zealand is getting value for money on several major projects.

"Last week I wrote to the Prime Minister warning her that certain gold plated projects are threatening to blow out their budgets.

"The armoured vehicle replacement project alone looks set to cost $600 million. That is more than $300 million over budget. Radio replacements and light vehicle costs are also well over estimates and budgets.

"The Defence Force hierarchy are so narrowly focused on certain pieces of equipment that they are failing to objectively consider more cost effective options, and I have explained this to the Prime Minister.

"I understand that Cabinet is going to discuss the armoured vehicle purchase tomorrow (Monday) and I am so concerned that they will make the wrong decision, that I have written to every Labour, Alliance and Green MP advising them of the situation.

"I have asked them to prevent Cabinet from making any decisions until there has been an independent inquiry into all of the Defence Forces procurement projects," said Mr Mark.

Encl: Letter of 3 August to the Rt Hon Helen Clark
Letter of 11 August to Labour, Alliance and Green MPs

3 August 2000

Rt Hon Helen Clark
Prime Minister
Parliament Buildings

Dear Prime Minister

Defence Procurement

I am writing to you out of concern that the Defence Procurement process is being corrupted to ensure that some individuals within Defence, who have a specific passion for particular items of equipment, get that equipment and nothing else. I am concerned that not only is this already harming New Zealand’s international reputation, it is also going to result in estimate blowouts and over spending.

On the issue of Defence, New Zealand First holds similar views to Labour, largely because of the work we did on the Inquiry into Defence Beyond 2000 and also because we want to see the personnel we are sending in increasing numbers overseas on active service, better equipped and better paid. I know finance is limited and that on that basis there is a need to prioritise spending and to get the best value for money without compromising the safety of our troops.

When we were conducting the Inquiry into Defence Beyond 2000 one of the issues consistently raised was the need for MPs in Government, and Parliament generally, to have a means of seeking contestable advice. On page 42 of the Report we (Labour included) said “we have found, in the course of our visits to camps and bases, that there are many matters – especially operational and organisational – which serving NZDF personnel at a less senior level are uniquely well qualified to comment on. Although moves to enable more serving personnel to air their views would need to be
managed sensitively we believe that change is needed in this area”. That chapter concludes with the recommendation “that an independent forum be established to provide advice on Defence and other national security matters.” The concerns I am expressing are shared by a large number of these “less senior personnel who are uniquely qualified to comment”

I would ask you to examine the new Light Operational Vehicle project, new Armoured Vehicle buy, the new combat radios and the other issues relating to Defence expenditure. It is my view that we can either continue down a path of blind acceptance of what certain Defence personnel are advising and overspend, or, we can take other equally sensible options and spend less. Such a course of action may well then give us the opportunity to accelerate procurement of other big ticket items such as helicopters, a sea going support vessel, transport aircraft, or improve wages and conditions of service for our junior service men and women.

As you know from my personal background I have direct experience of misdirected Defence policies and mistakes. My concern is that we do the right thing by the men and women we send overseas in pursuance of the goals and objectives we set them. The military hierarchy is capable of “spin”. They are capable of pursuing preconceived agendas and of (as they say in their language) “situating their appreciation’s” in order to get what they want. They are also capable of getting it wrong. The Charles Upham is only one example of many I could quote. Our responsibility as Parliamentarians, is to ensure that the nation’s interests will be well served long after the present senior advisors, have gone.

Therefore, I formally ask you to initiate an independent inquiry into the following Defence procurement projects.

 The Heavy Machine Gun buy. Why is it that despite the fact that these weapons were identified in the Bosnian deployment as being urgently needed and that they have been in service in our Defence Forces since World War II, the weapons have still not been purchased?

 The LOV Project. Why, after all the time and staff work, are we now in the embarrassing position of adjusting our tender and asking the same companies to “re-tender,” and why is it that highly reputed international companies who are normally in competition with each other, believe that they are not playing on a level field.

 The Light Armoured Vehicle Project. It has been reported to me that a very senior officer in Defence has expressed fears that this project is in serious danger of blowing out the $220 million budgeted figure to the tune of $5 million per vehicle. We could get a very good vehicle for half that price, but the Army hierarchy is fixed on a specification, which has been tightly written around the only vehicle that the Army wants, the LAV III. International suppliers of other vehicles, which they sell to the British, American, French and German Armies, say our tendering process for these vehicles is “highly unusual.”

 The combat radios. It is hard to understand how it is that combat radios that are good enough for the Australian Defence Force, that we could have obtained 1600 of for a price of $30 million, have been passed over for American combat radios, 680 of which are going to cost New Zealand $155 million. We rarely operate on a major scale, if at all, with the United States. We are operating in Bouganville and in East Timor on the largest scale with the Australians than we have since World War II, at the most intimate level, and we are essentially talking about a basic portable combat radio. Why are we wasting $115 million dollars?

 Project Sirius. If there is one project that I believe the Government has come to realise needs questioning it is Project Sirius. The questions you ask of this project need to be asked of the LAV, LOV and radio purchase plans.

Please also reread page 42 and 43 of the Inquiry into Defence Beyond 2000 and consider those views expressed by the entire Foreign Affairs, Defence and Trade Select Committee most seriously.

Yours sincerely

Ron Mark MP
Spokesman for Defence
New Zealand First

11 August 2000
Defence Procurement

It has come to my attention that there is a very real possibility that your Cabinet is about to approve the purchase of a light armoured vehicle which might well end up costing the country something in the region of $600 million. Specifically, their intention is to purchase the LAV III.

Whilst I do not deny that the LAV III is one of the best vehicles of its kind in the world, I emphasise it is only a one of the best.

My greatest fear is that by blowing out this budget by over $300 million you will effectively put an end to your ability to address other urgent Defence matters be that the purchase of other urgently needed equipment or be it pay.

I have outlined my concerns in the attached letter to the Prime Minister.

Please take the time to read this. If you have any questions at all, please contact me.

Yours sincerely

Ron Mark MP
Spokesman for Defence

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