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The $11 Billion Shopping List: What to Expect from the 2016 Defence White Paper

Line of Defence, April 2016

NZAF P-3K2 Orion. Image courtesy New Zealand Defence Force.NZAF P-3K2 Orion. Image courtesy New Zealand Defence Force.


“The next Defence White Paper, notionally scheduled for 2015, provides an opportunity to validate the policy settings established by the previous White Paper used as the basis for DMRR.”

So said the Defence Mid-Point Rebalancing Review (DMRR), which was directed by Cabinet in 2013, in order to assess what achieving the defence policy goals set out in the 2010 White Paper might actually cost.

Six quite different funding tracks were put forward – Track 1(most expensive) – Track 6 (least expensive.) “In summary” stated the Cabinet Paper, “only Track 1 would enable realisation of the policy outlined in the Defence White Paper.” Not wanting to lose any current major capability, the Government subsequently made it clear that Track I should be used as the basis for future planning. This was a significant win for Defence.

What is this likely to mean then for future capabilities and acquisitions? The Big-Ticket items – the ANZAC frigate replacements, the replacement of the C-130 LEPs and the B757s, and the replacement of the P-3 Orion with an equivalent capability, manned or unmanned, at the end of its life were all signalled in the 2010 DWP. Track 1 of the Defence Midpoint Rebalancing Review is predicated on these replacement assumptions, along with a potential increase of 1000 uniformed personnel between 2015 and 2030.

Whilst an updated Defence Capability Plan, which gave some detail around intentions for nearer term capability development, was made publicly available in June 2014 the Capital Plan was not. However, the seriousness of Government intent was signalled in the 2014 Briefing for the Incoming Minister of Defence which noted that, in addition to the agreed additional $535 million in operating expenditure, a “Capital Plan with indicative provisions of around $16 billion out to 2030 was also agreed”. 

When the appointment was announced at the end of January this year of Mike Yardley, former Chief of Air Force, to the position of Deputy Secretary Acquisitions, the Secretary of Defence noted that the new Acquisitions team would build the capacity to deliver an acquisition programme of around $11 billion over the next ten years which would include replacements for the NZDF’s air transport and air surveillance fleets and the ANZAC frigates.

The DMRR had given an indication of just where some of that money might be spent:

  • A Maritime Projection and Sustainment Capability – the replacement for the tanker HMNZS Endeavour
  • A Littoral Operations Support Capability – a single ship to provide the hydrographic survey, mine countermeasures and diving operations capability previously provided by HMNZS Manawanui and HMNZS Resolution
  • Replacement of the Boeing 757s in 2022-24
  • Replacement of the frigates in 2028/29 and
  • Development of a sustainable 800 person Battalion for the Army

In looking at the replacement of the two Boeing 757s what is noteworthy in the table is that the Airbus A400M is specifically mentioned as the replacement aircraft, yet throughout 2015 there was much speculation that Boeing C-17A Globemaster aircraft may be bought. Erroneously this has often been cited as a replacement for the C-130 Hercules. (Timing for replacing the C-130 LEP Hercules was signalled in the Defence Capability Plan as being before 2025.)

Whilst a Future Air Mobility Project is underway to identify suitable replacements for the B 757s and the Hercules, previous Governments have undertaken opportunity purchases. When speculation about the C-17s first arose there were five ‘white tail’ aircraft available, but now there is only one. There remains a possibility that a single new aircraft announcement could be made as part of the DWP process, yet deciding on the composition of future fleets for the Air Force becomes more complicated when considering the need to replace the P-3K2 Orion Airborne Surveillance and Response Force.

With the world’s sixth largest Exclusive Economic Zone covering four million square kilometres and a Search and Rescue Region stretching from Antarctica to the Equator of some 30 million square kilometres, New Zealand needs a significant Intelligence, Surveillance and Reconnaissance capability: the P-3K2 Orion with its recent comprehensive upgrades provides such a capability.

Just like the Hercules these six aircraft are about fifty years old and due for replacement about 2025. With 435 of these aircraft in service around the world, New Zealand isn’t the only country looking for replacements. Australia has indicated in its latest Defence White Paper that it will order a total of 15 Boeing P-8A Poseidon aircraft along with seven MQ-4C Triton unmanned surveillance aircraft.

Whilst interoperability with New Zealand is seen as important it is “recognised that New Zealand will make its own judgements on its national interests, and that New Zealand’s military capability choices may not always reflect Australia’s”. At a total cost of A$4billion for the first eight aircraft and support to be delivered to the RAAF, P-8s may not be New Zealand’s only choice for replacing the six Lockheed Martin Orions.

Currently under development, the Lockheed Martin SC-130J Sea Hercules could provide the replacement New Zealand needs. Purchased with new C-130Js to replace the air transport Hercules, the commonality could mean the need for fewer large aircraft. This could allow for the purchase of smaller surveillance aircraft as signalled in the 2010 White Paper and a smaller tactical airlifter. The Air Force already operates King Air B200s and an enhanced King Air B350 with a suitable ISR suite could provide the opportunity for an increase in cost effective maritime surveillance.

The Australians have purchased 10 Alenia C-27J Spartan twin-engined light transport aircraft, and this aircraft could provide New Zealand with a capability we lost when the last Andovers were retired. The caution with the Sea Hercules is that it is under development, whereas the P8 is already in service.

For the Navy what is likely to be announced is a third Offshore Patrol Vessel, along with the sale or mothballing of one or two Inshore Patrol Vessels. Annex A of the DMRR in spelling out what Tier 1 delivers, whilst not specifically mentioning the IPVs, notes, “Increased OPV fleet offers options to increase presence in the South Pacific region.”

This is a decision which would not only be easily accepted by the New Zealand public, but also would clearly meet Government intent for enhanced engagement in the region. What is also clear is that one of the Navy’s new vessels needs to have significant ice-strengthening for patrol work in the Southern Ocean.

When it comes to replacing the frigates the choice will be no less difficult than for the aircraft. Australia has determined that it will build its next generation of nine new frigates in Australia, though the design is yet to be decided upon. Contenders to replace the eight ANZACS in service include the British Type 26 Global Combat Ship, Spain’s Navantia F100 frigate, Germany’s Meko 600, or the French/Italian FREMM European Multi-Mission Frigate.

All of these are big frigates, with 50% greater displacement than an ANZAC. Whether New Zealand will join with Australia in the purchase of such a vessel would depend on many factors, not least being cost. It is worth remembering though that the ANZAC-build ultimately brought work worth $800 million to New Zealand.

There will no doubt be other acquisitions signalled, but the intent here has been to focus on the more expensive capabilities. What seems clear is that the Government remains committed to maintaining current levels of capability into the future.


The author, Dr Peter Greener, is a Senior Fellow at the Centre for Strategic Studies, Victoria University of Wellington. 


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