$4.6 billion marks new era for Defence

The government has ushered in a new era of structured defence funding and management with a $4.6 billion 10-year package, Defence Minister Mark Burton announced today.

By the end of the 10-year funding package, this government will have increased New Zealand Defence Force operational baseline funding by 51 per cent since taking office in 1999, resulting in modernisation of equipment across all three services and increases of many hundreds of military personnel, Mr Burton said.

Releasing the government's long-term approach to building New Zealand's defence capability, Mark Burton said this latest initiative would ensure that our defence force has the capacity to meet New Zealand's defence requirements into the future.

Building on earlier major capital injections in the Defence Long Term Development Plan, the Defence Sustainability Initiative will provide additional funding (excluding gst) of $4. 4 billion (operating) and $209 million (capital) over the next 10 years. This will restore and develop the resources of the New Zealand Defence Force and the Ministry of Defence and will align long-term personnel recruitment, training, development and resources with the defence capital acquisition programme. This will enable:
- Increased personnel numbers and enhanced training and retention.
- Maintenance and development of infrastructure at camps and bases.
- Increased reserve stocks of necessary equipment and spares.
- Strengthened administration and management systems.
- Cover of depreciation on defence assets.

"This long-term strategic funding initiative is the fourth stage of a systematic approach by this government to restore the capability of our Defence Force which was left to run down during the 1990s resulting in personnel shortages, ageing equipment and infrastructure, " Mark Burton said.

This initiative continues the process of government's defence statements which began with the Defence Policy Framework and the Government Defence Statement that define the structure and role of the our Defence Force, and the Defence Long Term Development Plan which resources and sets priorities for a ten year plan of defence acquisitions.

"When we came into government in 1999 we inherited a defence force that had suffered sustained under investment for nine years.” Mark Burton said.

“This underinvestment began in 1991/92 when the then National government cut defence baseline spending by $112.75 million and continued with cuts totalling $150 million well into the late 1990s.

“This government has increased spending on defence each year since 1999. We have already dealt with the more urgent issues relating to equipment deficiencies by advancing 24 major re-equipment projects as outlined in the Long Term Development Plan. We have also addressed pressing personnel issues by funding four annual pay raises since 1999. Having taken those actions, the next step was to develop a longer-term approach to identify and address gaps in defence capability."

Working with the Ministers of Finance and State Services, Mark Burton directed in early 2004 that a review be undertaken to look at the capability and resourcing requirements of defence.

The Defence Capability and Resourcing Review, identified a number of areas where there were deficiencies in both the New Zealand Defence Force and the Ministry of Defence.

"The Defence Sustainability Initiative takes a strategic approach to addressing these issues, and in particular to developing a Defence Force for the 21st Century," Mark Burton said.

"We know these issues cannot be addressed overnight, particularly in the area of recruitment and retention, where capabilities must be built up progressively over time. That is why this funding initiative is to be phased over 10 years. Building personnel capacity, when it has been run down, takes time.

“The fact is, we inherited a problem, and we are continuing to systematically sort it out. This major initiative will enable defence to move forward, secure in the knowledge it has the long term funding required to meet the country's defence and security needs."

ENDS

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