www.mccully.co.nz - 3 November 2006

A Weekly Report from the Keyboard of Murray McCully MP for East Coast Bays

The Price of Defence

Every few months we are favoured by our Government with an announcement of some new investment in our Defence forces. Each, of course, is touted as evidence of an attempt to re-build or modernise our ailing military. Many, in classic Clark form, are simply re-announcements of previously announced expenditures. And all are designed to hide a simple and very serious truth: spending on defence remains at a critically low level relative to our total economy.

New Zealand is spending 0.9% of its GDP on defence - the lowest rate of investment for a country of our type. Australia, the nation with whom we should share the burden of security in our region, is spending 1.9% of GDP. In the current year we will just manage 0.9% of GDP. And published intentions for the next two years see us drifting down to 0.88% of forecast GDP next year. Most critically, we are failing to pay the sort of rates that will recruit and retain the people required to operate the specialist capabilities in our armed forces. And the cracks are starting to show.

LAVs in Storage

Much boasting accompanied the purchase of 105 LAVs by the New Zealand Army at a price of $650 million. Leaving aside the Auditor-General’s two reports critical of the method of their purchase, the LAV III purchase was one of the larger capital investments made by our military in recent times.

How very very strange, therefore, that rumours should reach the worldwide headquarters of mccully.co that nearly a quarter of the LAVs had been placed in storage. Not just any old sort of storage. The sort of temperature controlled, high tech storage that is required to protect the LAV computer systems. So a written question to Defence Minister Goff was designed to flush out the facts; had any of the LAVs been taken out of operation and placed in storage? If so, why?

"Yes", was the Minister’s candid response. "Elements of 1 RNZIR in Linton have been deployed to Timor Leste, leaving 23 NZLAVs without crews. Accordingly, 23 LAVs are currently held at Base Depot Trentham."

Hang on. 23 expensive, newly acquired LAVs "without crews." Because the crews have been sent to Timor. So the 23 LAVs are being held in storage?? A sign, to be sure, that some very very large problems lurk not too far below the surface with our armed forces.

The Damning Defence Annual Report

Problems finding trained personnel to operate the LAVs are symptomatic of a wider human resource problem within the armed forces. No, this is not just a beat-up from the Government’s political opponents. It’s all there in black and white in the 2005-2006 Defence Force Annual Report to Parliament. Just look at a small sample from the list:

In the Naval Combat Forces:
"Shortages in key positions and branches particularly Aircrew, Bridge Watch-keeping, and Warfare officers, technicians and some Operations Branch personnel continue to provide challenges in manning the NCF."

The Navy’s Seasprite helicopters suffer from "critical shortages in aircrew instructors’ availability."

In the Land Combat Forces:
"Most units are staffed at below 80% of establishment." (Target is 85%).

"However, in many cases personnel are junior soldiers with less than two years service."

In the SAS, which we proudly deploy to the trouble-spots of the world "skilled personnel and equipment shortages continue to affect this capability."

Maritime Patrol Forces were hampered by "insufficient aircrew personnel to generate the number of crews required...", "mission equipment is inadequate for the majority of the more demanding surveillance and maritime air operations tasks," and "the MPF has insufficient weapons, expendables and technical stores."

In the Fixed Wing Transport Service "one Boeing 757 was available for most of the period and availability of one was limited by engine malfunctions."

And Hercules flew "reduced hours" "due to poor aircraft serviceability rates, in particular unscheduled maintenance due to numerous age-related system faults that affected the ability to complete planned tasks."

In relation to the Rotary Wing Transport Forces "the aircrew state has compromised the ability of the RWTF to meet its designated outputs.." and "the performance of the aircraft in bad weather, at night and in hot and high conditions is unsatisfactory."

Time for a Re-think

New Zealand currently has troops deployed in ten different trouble-spots around the world. Current problems in Fiji, the Solomons and Timor Leste should serve to emphasise the responsibilities that this country should shoulder. And it is becoming abundantly clear that our current budgetary commitment to defence is inadequate either to provide the equipment required or the skilled personnel to operate it.

Neither major political party can be particularly proud of its track record on defence resourcing. The current 0.9% of GDP Defence Budget instigated by National governments early in the cash-strapped nineties has been retained by both major political parties since.

Any assessment of the security challenges around the world, especially those in our own region, would suggest a major re-think is required - one that rises above the banal political exchanges we have been used to. The authors of this year’s Defence Annual Report to the New Zealand Parliament would appear to agree.

The NH 90 Mystery

Mystery continues to surround the $771 million purchase of NH 90 helicopters announced recently. Australia is purchasing 46 NH 90s, which will be assembled in Brisbane. New Zealand is purchasing eight NH 90s and they are being manufactured in France. True, the Australian version will boast a different combat communications capability. By why would two such good friends and neighbours not act together on such a purchase? Why would New Zealand not wish to emphasise our commitment to the trans-Tasman Defence relationship by having our helicopters assembled in Brisbane in conjunction with the Australian procurement programme?

Also puzzling is the fact that the official Defence announcement states very clearly that we are purchasing eight NH 90s. Yet we appear to have told the Australians we are purchasing nine. Dividing the $771 million by nine rather than eight would possibly remove the embarrassment of a price tag per helicopter that is substantially higher than the Australian unit cost. Which would make our decision to go it alone even more difficult to understand.

Defence papers explain that the ninth helicopter is, in fact, the spares package. Apparently the ninth helicopter will be fully assembled and air tested in France, then pulled apart to be used for spares. A variation, no doubt, of the principle that required fully assembled television sets to be pulled apart prior to importation into New Zealand so they could be re-assembled here back in the days of import licencing. The paperwork claims it was cheaper to buy a ninth helicopter, fully assemble and air-test it, then pull it apart than to simply buy the parts. Now that must have taken some negotiating.

Craven Censorship from Wellington Airport

The arrogant refusal of the Clark Government to admit even the slightest of wrongdoing over the pledge card debacle, followed by a reluctant commitment to pay the money back, is merely the tip of a large iceberg of misdemeanours committed in office. And to remind the public of recent history, thoughtful National Party managers prepared some of those nice billboards that were so popular during the election campaign.

High profile sites in Auckland, Wellington and Christchurch were duly booked. The Wellington site was located at the capital’s airport. For the Auckland and Christchurch sites, it was a simple commercial transaction - you book the site, pay the money, erect the sign. But owners of the Wellington site - the Wellington Airport company (yes, the same Wellington Airport company that had invited Annette King to open the new airport tunnel this week) - wanted to see the proposed billboard. How very very unusual. And having seen it, they pronounced it to be "too political" and rejected it. A naked act of censorship, you would have to conclude. Just what is going on here?

The Wellington Airport company is currently on the receiving end of allegations of overcharging for landing fees by the nation’s airlines. They are also lobbying furiously to stop an Air New Zealand/Qantas proposal for code-sharing - which would result in fewer flights in and out of the capital. And we can only assume that the decision to censor the National Party billboards is an act of craven sucking up to a Labour Government known for its vindictiveness.

It should be noted that Wellington Airport Company is 66% owned by listed infrastructure firm Infratil - the same outfit who are bidding for the opportunity to run commercial flights into Whenuapai. And who are involved in a variety of moves in the electricity sector. So the obvious question is just who in Wellington Airport Company was the champion sucker-upper who canned the National billboards? Did Infratil have any role in the decision? If so, are we likely to see such acts of political obsequiousness become a feature of the rapidly expanding Infratil empire?

The far-sighted policy boffins at the worldwide headquarters of mccully.co have always favoured public/private partnerships and private participation in the ownership of infrastructure. But if the consequence of private participation in infrastructure ownership is to be craven sucking up to the government of the day by censoring the billboards of their political opponents, then clearly there is a flaw in that position.

This week the worldwide headquarters has a little friendly advice for Wellington Airport Company and its Infratil owners: start focusing on getting a few basic services right, like getting the signs to provide accurate information about actual departure times, and forget about wasting time censoring the political activities of the Labour Party’s political opponents. Then maybe some more people will listen when you want to preach about the virtues of private sector participation in the ownership of important infrastructure.

ENDS

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