Wayne Mapp MP
National Party Defence Spokesman

26 June 2008

AG slams lack of info for defence audit

It is a disgrace that the Auditor-General has been unable to complete an audit into defence acquisitions because parties involved were unable to provide him with all the necessary information, says National's Defence spokesman, Wayne Mapp.

"In his report, Kevin Brady says 'my staff were unable to complete the audit as originally intended. A lot of the detailed information that I expected the defence agencies to have was not readily available. Also, my staff and the Ministry of Defence disagreed on the point in the acquisition process from which changes should be monitored'.

"It is almost unprecedented that an audit fails because there is not enough information to conduct a proper inquiry. Serious questions need to be asked as to why Kevin Brady's attempts to investigate the robustness of the acquisition process have been hampered, particularly when so many acquisitions under Labour have suffered major cost blowouts and delays."

Kevin Brady notes that 'although the defence agencies' guidance states that cost estimates should be robust when they are submitted to Cabinet for approval to commence acquisition, in practice they are not.

He adds 'for most of the 10 projects, estimated costs and time frames had increased, in some cases significantly, between when Cabinet gave approval for acquisition to commence and when Cabinet gave approval for the contract to be signed'.

Dr Mapp says major procurement contracts, such as the replacement RNZAF helicopters which ballooned from an original estimate of between $400 million and $550 million out to $910 million, show the Government has played fast and loose with public money.

"In addition, none of the Project Protector ships have proven to be ship-shape on delivery, and some have even failed critical safety tests.

"This report, although incomplete, makes scathing observations which point to systemic problems in the defence procurement process for which the Labour Government must take full responsibility.

"Taxpayers expect the Government to account for how it spends public money, and why so many defence procurement contracts are inherently flawed.

"National is committed to a White Paper on defence which will feature an independent review of procurement. The Auditor-General's report shows why this is essential."

ENDS

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