New Zealand Defence Review

With six Skyhawks deployed at NAS Nowra, performing Australian Defence Force work, the RNZAF is at the forefront of current cooperation with Australia. For this reason, it’s perhaps worth taking a closer look at what the review is doing to the RNZAF, and some of the reasons behind it. These relate to the same fiscal and strategic pressures driving the rest of the review.

The current review marks the second time in four years that New Zealand’s defence forces have come under scrutiny. A general fall in defence expenditure over recent years has seen the military vote drop from 2% to around 1. 8% of GDP This time, the National government seeks to reduce expenditure further – by around $NZ100 million if possible.

Spartan budgets are not new to the RNZAF or – for that matter – any component of the New Zealand Defence Force. For more than a century, successive governments have wrestled with the fact that the country simply does not have the income to support much in the way of military forces. Given this problem it is perhaps fortunate that, geographically isolated in the South Pacific, New Zealanders have seldom felt directly threatened. While various potential enemies have been regularly identified, few have ever been thought likely to actually invade New Zealand.

After the Second World War, defence spending hovered around 2% of GDP – a figure that has not kept pace with the increasing expense of high tech weaponry. As far as the RNZAF was concerned this meant, in 1970, replacing about seventy de Havilland Vampires with only fourteen A-4K Skyhawks. Then in 1983, when the Skyhawks came up for replacement, funds were so limited that they were upgraded instead, in an effort to keep them in front line service to the end of the century.

By late 1990, in the face of public ire over New Zealand’s economic situation, defence had become a major public target as a ‘money waster’ because of thehigh profile ‘Anzac’ frigate project and the purchase of eighteen new Aermacchi MB-339 trainers for the air force(refer P37 July 91 AA). The latter remain, however, the only new build aircraft in RNZAF inventory. The rest, with the exception of the Skyhawks, are approaching the end of their economic life.

These factors could invoke substantial capital investment in the near future, and have had their effect on the current defence review. All the issues and the operating basis of the review were outlined in a white paper published in May this year. This is couched in ‘corporate’ terms – defining inputs, outputs, and core ‘business’. A central theme involves the resolution of several fiscal issues, including ‘funding lumpiness’ and the tricky problem of assigning depreciation values to defence assets.

The review is being conducted under the auspices of the Defence Act 1990, which requires a periodic assessment of New Zealand defences. It includesseveral sub-sections, each addressing a different aspect of the defence forces. Four of the five directly affect the RNZAF. The sub-reviews are being conducted by policy and planning teams supplied from the Ministry of Defence and the New Zealand Defence Force. Both teams are working separately under the general guidance of a steering committee.

Announcing the review, the white paper released in May also discussed the operating brief in some detail and provides the first post cold war strategic analysis of New Zealand’s position. This points out that New Zealand has ‘the world’s largest moat’. Two thousand kilometres of ocean separate NZ from Australia, let alone any possible enemy. New Zealand – like Australia – is also far from the major sources of international dissension.

Yet at the same time, this strength is also a liability. With an exclusive economic zone of three million square kilometres, and an absolute reliance on ocean borne trade, New Zealand is firmly a maritime nation – subject to all the pressures outlined by Captain Mahan in his seminal work on sea power more than a century ago. Detection of threats, disaster relief, even air sea rescue – all require considerable maritime capability both on the ocean surface and in the skies above.

These strategic aspects are fixed. Variables include the recent end of the cold war; many of the issues raised by this substantial change have yet to become clear. Regional conflicts may even become more likely, as a result. From New Zealand’s viewpoint, security and stability in the South Pacific remains a major concern.

Funding – and lack thereof – is a key issue raised by the white paper. Matters dealt with here include the handling of depreciation. Under the new system the government provides money each year to cover the depreciation of defence assets. Theoretically this is sufficient to pay for the eventual replacement of the asset- be it Scorpion tank or Skyhawk fighter bomber. Actually, the white paper concludes, the system can never provide enough money.

To help smooth out the ‘cashflow lumpiness’ caused by the need to periodically fund large capital purchases from only a few years’ annual appropriations, the white paper looks for inspiration to the private sector. Asset management, even leasing and vendor financing, remain possibilities. “The key consideration is whether the real financing costs are more or less than those of the government. ” The white paper refers to bases and accommodation as potential targets for lease back after sale; but the imagination boggles at the thought of such a practise spreading. (“Fly your own Aermacchi. Reserved for air force use Wednesday afternoons only . . . “).

Currently the proceeds of any state asset sale are partly retained by the government. The white paper suggests that to induce sale of defence assets, proceeds could be retained by defence; but this might set a precedent for other government departments.

Eight tasks have been identified which the defence forces must be “capable of adequately performing”. These include protection of New Zealand’s sovereignty, contribution to regional security, participation in defence alliances, and contribution to collective security. The white paper identifies a mismatch between what New Zealand currently has, and the desired levels needed to meet the goals.

Perhaps inevitably, cooperation with Australia is a key element of the ‘desired’ solution proposed in the white paper. Both nations have very similar strategic perceptions and problems – quite apart from a common origin, and a long history of military alliance and general defence co-operation. Interoperability with Australia and closer co-operation at various levels remains a preferred option.

The ‘Anzac’ frigate project makes such a task easy enough for the navy. What of the RNZAF? Back in the early 1980s, the RNZAF rejected a proposed joint buy of F/A-18 Hornets with Australia. Instead, the service bought ten ex-RAN A-4K Skyhawks. Updated with all the other RNZAF Skyhawks to ‘Kahu’ standard, they are now electronically comparable to the F/A-18s.

There seems little doubt that the way here is pointed out by the current RNZAF deployment of six Skyhawks to NAS Nowra. Tasked primarily with maritime strike exercises for the RAN, they complement existing Australian aircraft assets and provide a useful force addition. Dubbed a ‘howling success’ by Nowra commander Commodore Rob Partington, the Nowra deployment certainly proves that closer cooperation would pose no practical problems.

The recently completed ‘air combat’ portion of the defence review has examined the Skyhawks to see whether the existing force matches up to the strategic situation. New Zealand media tend to view government announcements with a certain degree of cynicism; and when the white paper was released in May there was a good deal of speculation that axing the Skyhawks was a fait accompli. In fact, the review team looked at the aircraft in terms of whether the force level achieved the credible minimum judged necessary to achieve the goals set for it. They drew their conclusions accordingly. Whether the recommendations made on 31 October will be actually adopted remains to be seen.

As yet review teams have not reported back on the fate of the six P-3K Orions, or New Zealand’s elderly force of C-130K Hercules, BAe Andovers, and the rotary-wing arm of the air force. In contrast to the Skyhawks- which, with new wing spars, have relatively fatigue free airframes – the rest of the RNZAF’s inventory is approaching the end of its economic life. New Zealand cannot really afford to replace these aircraft even in the medium term. This factor complicates the two sub-reviews in question.

The maritime surveillance sub-review is essentially a cost-benefit analysis of the capabilities provided by the six P-3K Orions (and the navy’s frigates) in terms of the likely threats to be facedin the next quarter century. In particular, the review is looking at developments in submarine technology and the degree to which it might be adopted in the Asia-Pacific region.

Problems stem from the age of the Orions. Plans to fit them with AGM-65 Harpoon missiles were shelved in the mid-1980s for lack of funds; as was a proposed avionics update to improve their anti-submarine warfare capability. Now, the reviewers must consider whether it is worth spending money upgrading quarter century old airframes. Again, consultation with Australia is recommended by the white paper.

Air transport was considered inadequate in the 1987 defence review, but nothing has been done about it since. Two issues are at stake here. The first is finding the best method of providing a ‘surge’ capability by which forces might be deployed away from New Zealand in a crisis. The second is that “with obsolescence about to overtake our entire transport fleet”, something will have to be done about finding replacements.

That, of course, is an understatement. New Zealand’s five C-130s were purchased new in 1965. The nine BAe Andovers are similarly aged, while the fourteen UH-1D Iroquois helicopters recently celebrated 25 years in RNZAF service. Even the three Boeing 727-100s are not in their first flush of youth.

The air and sea transport sub-review therefore looks at the “optimal plan for reinvestment in transport aircraft”, including possibly reducing the number of aircraft types. At the moment there are four. Potentially a single airframe for transport and maritime patrol could be adopted. The white paper hints at modular designs adopted by other nations. The question to be answered here is whether reduced surveillance capability is an acceptable price for larger transport capability in an emergency.

All will be made clear when the final sub-review teams report back on 31 October. What happens after that remains to be seen. The fiscal pressures to which the review is partly a response will not go away. Nor will the need to deal with ageing hardware. However, if the final conclusions suggest outright reductions for the NZDF, then 1992 will see New Zealand facing some hard decisions.

Given the desirability of further close cooperation with Australia, it is unlikely that the review will suggest reductions that could compromise New Zealand’s ability to make reciprocal arrangements. However, until results are available, such comment remains speculative. Potentially, fiscal pressures and the inspiration of private sector practises could win out. In that case, the NZDF will face substantial changes as the 1990s progress.