NZDF General discussion thread

[ngatimozart]

In order to get an idea of the cost of your proposals (which I know is the dream list) I did some calculations using NZDF info and the ever reliable Wikipedia on the above list. The Army equipment is a bit messier given what you were proposing so I excluded it. For simplicity I've also removed the spares from the equation. In total the total cost is $17,545,537,734 requiring annual capital contributions of $584,851,258. Assuming a service life of 30 years and annual costs increases on 3% (there seems to be a lot of debate about military inflation) the cost rises to $27,824,541,716.

PM me if you want the spread sheet.

I did a back of envelope calculation and multiplied acquisition costs by 3 to arrive at the term of life costs, but your figure would be within the ballpark. The Gripen D is US$40 million and SAAB state that it is a 40 year platform and that its operating costs are 10% less than that of the F16. They only thing with the Gripen is its short legs. Mind the A4K didn't have the longest legs in the world. I saw a F18 with engines and warfare systems flyaway cost last week of US$52 million so that possibly could be another option. Boeing confident over additional US Navy F/A-18 orders

Given your costing and the annual contribution for capital it is something that I believe the country can afford. It's not as though we would be spending $28 billion in one year. I'd based my acquisitions over a 10 year period because I believe that would be the minimum practical time period to induct all the new kit in.

 

[MrConservative]

Why the Gripen Ngati? You could be a wee more aspirational than the Grippers with an unsigned Government cheque mate.

How stink are our pilots going to feel slumming it in Grippers when all the other blokes on the coalition base have flash new JSF's? Not too happy me thinks.

Get down to your friendly local Lockheed Martin dealer and buy a few F-35B's while the dollar is good Ngati.

Cheers MrC

 

[ngatimozart]

Why the Gripen Ngati? You could be a wee more aspirational than the Grippers with an unsigned Government cheque mate.

How stink are our pilots going to feel slumming it in Grippers when all the other blokes on the coalition base have flash new JSF's? Not too happy me thinks.

Get down to your friendly local Lockheed Martin dealer and buy a few F-35B's while the dollar is good Ngati.

Cheers MrC

Because the govt cheque is not unlimited and SAAB have designed the Gripen to have an operational life of 40 years, it's cheaper to purchase and costs 10% less to operate than a F16. The F35B is the most expensive variant and we would have expensive upgrades and MLUs that would have to be done thru LockMart regardless of which variant we bought. Also I would question whether it would be the right aircraft for NZ.

However if by some miracle we could afford to buy and operate F35s my choice would be the B because it would give us a capability that would fit real good in the JATF structure similar to what the USMC do. We wouldn't have the flat top but if you look how they operate their AV8s on forward strips we would fill a niche capability. Would work in both symmetrical and asymmetrical warfare situations. Only thing I don't like about the B is no internal gun. I am of the view that is a major mistake.

Anyway knucks have big egos but in the end they fly what they are provided with or not fly at all.

 

[t68]

Because the govt cheque is not unlimited and SAAB have designed the Gripen to have an operational life of 40 years, it's cheaper to purchase and costs 10% less to operate than a F16. The F35B is the most expensive variant and we would have expensive upgrades and MLUs that would have to be done thru LockMart regardless of which variant we bought. Also I would question whether it would be the right aircraft for NZ.

If you look to the South Koreans regarding building AOR and support ships, I’d imagine that they would also do a good deal on F/A-50 which is cheaper than the Gripen in flyaway costs if that’s your main concern and more compatible with what’s in the US inventory regards to EO.

 

[MrConservative]

Because the govt cheque is not unlimited and SAAB have designed the Gripen to have an operational life of 40 years, it's cheaper to purchase and costs 10% less to operate than a F16. The F35B is the most expensive variant and we would have expensive upgrades and MLUs that would have to be done thru LockMart regardless of which variant we bought. Also I would question whether it would be the right aircraft for NZ.

However if by some miracle we could afford to buy and operate F35s my choice would be the B because it would give us a capability that would fit real good in the JATF structure similar to what the USMC do. We wouldn't have the flat top but if you look how they operate their AV8s on forward strips we would fill a niche capability. Would work in both symmetrical and asymmetrical warfare situations. Only thing I don't like about the B is no internal gun. I am of the view that is a major mistake.

Anyway knucks have big egos but in the end they fly what they are provided with or not fly at all.

Ngati .... I was only pulling your leg about the F-35.

Seriously the whole air combat capability within the NZDF has gotten way from us even if we had the money we will still have to have a hard look at what roles we required in the wider battlespace, what support is needed and from whom which frankly is a major determinator, plus the institutional knowledge we once had is long gone and any residual is from another era and we would have to either buy that in or have someone hold our hand to do so. There is realistically only one country that can do that. They work on the principle of mutual generousity by the way. We used to once upon a time provide a small tier 2 capability to the region with our A-4Ks however air warfare has changed so dramatically since then and will continue to do so that I wonder if attempting to return to a tier 2 AC capability is actually worth it the way modern airfare is unfolding. Five years ago I still thought their was a place for a tier 2 capability contribution even if it was at best symbolic. I am not so sure now.

 

[ngatimozart]

New Zealand abandons savings plan

A plan introduced by New Zealand's Ministry of Defence (MoD) in 2010 to save about NZD400 million (USD330 million) a year in a bid to improve the operational effectiveness of the New Zealand Defence Force (NZDF) has been abandoned, a government committee has revealed.

An annual financial review of the MoD undertaken by New Zealand's Foreign Affairs, Defence and Trade Committee, which was published on 12 December, said that while the MoD has ceased its implementation of the savings plan, its focus on improving efficiencies within the NZDF has remained in place.
As part of this emphasis, the financial review also highlighted New Zealand's recently introduced procurement strategy to favour 'commercial off-the-shelf' purchases against those that are regarded as 'modified off the shelf'.

Savings
New Zealand's savings plan was introduced in the country's 2010 defence White Paper partly in response to growing fiscal challenges in the country. It committed the MoD to "free up", through the implementation of "value for money initiatives", between NZD350-400 million a year for "frontline capabilities" such as operations, training and procurement.

In its report, the Foreign Affairs, Defence and Trade Committee said that the MoD's savings plan had now "been abandoned, but the goal of making the savings had not".

It added: "(The MoD) is now reviewing the plans for the remaining savings, and is negotiating with the government to balance potential operational consequences. The (NZDF) considers it must constantly look for reforms in the interests of efficiency, to maximise funding for front-line operations, effectiveness, and training."

The committee did not state why the savings plan had been abandoned but it said that the NZDF believes that it can make more savings using new strategies, and that "more investment is needed to achieve the kind of changes that would release savings in future".

Procurement
New Zealand's emphasis on improving procurement efficiencies was introduced in recent years following a series of delayed procurements, most notably the 2005 purchase of eight NHIndustries' NH90 medium utility helicopters, deliveries of which commenced in December 2011.

In its report, the Foreign Affairs, Defence and Trade Committee said final delivery of the last NH90 helicopters had been delayed by two years and that the NZDF will receive NZD1.8 million from the manufacturer as compensation. NHIndustries will also offer by way of compensation "extended technical assistance and the guaranteed availability of a helicopter", said the report.

The report added that in an effort to avoid procurement delays in the future the NZDF is now "making a policy of working with its key defence partners when procuring equipment… The ministry no longer orders customised equipment, to minimise costs and avoid delays in delivery".

By way of example, the report pointed to the MoD's programme to procure 200 military trucks of varying sizes and configurations, which culminated in May 2013 with a contract awarded to Rheinmetall MAN Military Vehicles Australia. The trucks were "bought from the same production run as a British military order", said the committee's report. "The new trucks were acquired within 18 months of starting the procurement process, which is an improvement on previous orders."

Copyright © IHS Global Limited, 2013

New Zealand abandons savings plan - IHS Jane's 360

Finally the pollies and bena counters have realised the false economy. This is a major change in policy and I would suggest that it is a result of the DMRR. Maybe it's a sign of an outbreak "common sense and practicality" amongst the pollies and bean counters, but I won't hold my breath. The burning questions will be what will the NZDF budget be increased by next May? And how much of a boost will the NZG give the MoD / NZDF capital procurement budget?

 

[ngatimozart]

Ngati .... I was only pulling your leg about the F-35.

Seriously the whole air combat capability within the NZDF has gotten way from us even if we had the money we will still have to have a hard look at what roles we required in the wider battlespace, what support is needed and from whom which frankly is a major determinator, plus the institutional knowledge we once had is long gone and any residual is from another era and we would have to either buy that in or have someone hold our hand to do so. There is realistically only one country that can do that. They work on the principle of mutual generousity by the way. We used to once upon a time provide a small tier 2 capability to the region with our A-4Ks however air warfare has changed so dramatically since then and will continue to do so that I wonder if attempting to return to a tier 2 AC capability is actually worth it the way modern airfare is unfolding. Five years ago I still thought their was a place for a tier 2 capability contribution even if it was at best symbolic. I am not so sure now.

Hmmm, not all the institutional knowledge has disappeared yet, but as time goes by it does erode and age ungracefully. I think IF we were to go back into fast jets our roles would be maritime strike, air combat and as a secondary task air to mud. I don't believe that LO capability is a NZ needs unless like I said a miracle happened and we had an unlimited pot of gold and we could afford to be ostenatious. I still think we could make a contribution and a good one but I agree as time passes that becomes more remote.

Another way to make a contribution would be to add a force multiplier capability such as an AAR capability. Some on the RAAF forum posit that the RAAF does not have enough of an AAR capability. If we follow that line of thought then NZDF acquiring say three KC30MRTT would add extra AAR capability in the Australasian and South Pacific area, plus meet NZDFs own transport requirements. However the main point is that it would enable a force projection contribution that would be of assistance to both the RAAF and the USAF, USN and USMC. Looking long term both the C130 replacement and the P8 have AAR receiving ability so that would also be of benefit to NZ. Anyway just some thoughts.

 

[Lucasnz]

Finally the pollies and bena counters have realised the false economy. This is a major change in policy and I would suggest that it is a result of the DMRR. Maybe it's a sign of an outbreak "common sense and practicality" amongst the pollies and bean counters, but I won't hold my breath. The burning questions will be what will the NZDF budget be increased by next May? And how much of a boost will the NZG give the MoD / NZDF capital procurement budget?

I think the split of MOD into MOD and NZDF contributed to a number of problems in relation procurement in that you had civilians (albeit some with military backgrounds) running complex project with little understanding of complexities. If I contrast the navy purchase of Endeavour with only one minor issue against the MOD run Project Protector (though I have heard the Beehive contributed to some of the issues) the difference in performance is staggering.

In terms of budget if we start moving back to 1.8% of GDP I'd be more than happy, but first they need to get rid of that capital charge.

I'd tend to agree that we have not lost all the institutional knowledge. We've recruited a number of ex RAF Fast Jet Pilots as Flight Instructors and a number of still serving flight crew qualified on the MB339. If trained before 1997 they will be air combat qualified.

 

[MrConservative]

Hmmm, not all the institutional knowledge has disappeared yet, but as time goes by it does erode and age ungracefully. I think IF we were to go back into fast jets our roles would be maritime strike, air combat and as a secondary task air to mud. I don't believe that LO capability is a NZ needs unless like I said a miracle happened and we had an unlimited pot of gold and we could afford to be ostenatious. I still think we could make a contribution and a good one but I agree as time passes that becomes more remote.

NG. It has gone. Frankly we were just hanging on by our fingertips in 2001 when the ACF went. Just because we could maintain and fly A-4Ks half a generation ago has no plausible connection with the now or let alone the future within the context of contemporary Air Combat ops.

 

[gf0012-aust]

Far be it for me to dash hopes of a revitalised fixed wing combat air arm for RNZAF - but the reality is that you aren't getting that fixed wing combat capability back

The cost and opportunity to rebuild degrades every year - and from what we get from Kiwi colleagues attached at the crystal palace level - its never coming back as both sides of Govt uniformly agree that they won't reinvest and rebuild.

RNZAF fixed wing combat capability has the same chances as RAN Fleet Air Arm fixed wing combat capability coming back in - or RAN getting a real aircraft carrier instead of the two current surrogates

as close cousins we can only share your pain in what's lost - and as some of you have probably noted in the RAAF/RAN threads we now give sharp advice to newbies who do a lazarus on the subject every now and then.

RNZAF main focus is about ISR and BAMs and any long range interdiction against proscribed threats will be done with the Orions. If there's anything where there is a fast mover threat, then the points of the compass make that to be highly and tightly restricted to carrier delivery - and if that's the case then it means that NZ will have either friendly subs sniffing around to assist in your MP zone - or that other friendlies will tactically rotate their own fixed wing combat air into bases that can take them (its been done before and it can happen again)

Neeldess to say, a threat involving carrier launched red fixed wing combat air means that the game has a whole pile of different dynamics in play - and NZ would not be on their own

like us, it's now about photographs and fond memories.....

 

[ngatimozart]

Unfortunately I have to agree with both of you. Our days of fast jets are ancient history. That's why I was thinking about the second option of AAR support in lieu thereof. Anyway this is link to Report of the NZ Parliament Foreign Affair, Defence and Trade Committee regarding the 2012/13 financial review of the Ministry of Defence and the New Zealand Defence Force. http://www.parliament.nz/resource/0002060304 As you will have seen from my earlier post, quoting the IHS Janes story, the NZDF had confirmed that the target of reaching $350 million in savings by 2015 had been abandoned, but the goal of making the savings had not. It is now reviewing the plans for the remaining savings, and is negotiating with the Government to balance potential operational consequences.

 

[Gibbo]

Unfortunately I have to agree with both of you. Our days of fast jets are ancient history. That's why I was thinking about the second option of AAR support in lieu thereof. Anyway this is link to Report of the NZ Parliament Foreign Affair, Defence and Trade Committee regarding the 2012/13 financial review of the Ministry of Defence and the New Zealand Defence Force. http://www.parliament.nz/resource/0002060304 As you will have seen from my earlier post, quoting the IHS Janes story, the NZDF had confirmed that the target of reaching $350 million in savings by 2015 had been abandoned, but the goal of making the savings had not. It is now reviewing the plans for the remaining savings, and is negotiating with the Government to balance potential operational consequences.

Um, let me read that again...

"....the NZDF had confirmed that the target of reaching $350 million in savings by 2015 had been abandoned, but the goal of making the savings had not. It is now reviewing the plans for the remaining savings, and is negotiating with the Government to balance potential operational consequences".

Okay, so the savings are still to be made, but there are potential operational consequences... why do I get the feeling somethings for the chop, or a replacement for something not being bought!?!

 

[Todjaeger]

Um, let me read that again...

"....the NZDF had confirmed that the target of reaching $350 million in savings by 2015 had been abandoned, but the goal of making the savings had not. It is now reviewing the plans for the remaining savings, and is negotiating with the Government to balance potential operational consequences".

Okay, so the savings are still to be made, but there are potential operational consequences... why do I get the feeling somethings for the chop, or a replacement for something not being bought!?!

That is one possible interpretation of the statement. Another is the gov't has realized that the 'savings' required of the NZDF is so high that it will negatively impact operations and/or kit upgrades and replacements and thus future operations.

Honestly IMO not too surprising that the 'savings' plan needed to be abandoned. A savings of NZD$400 mil. p.a. works out to ~16% of the 'official' NZDF budget, including the wretched Capital Charge and other charges (GCT IIRC). Given the size of the Capital Charge and other bookkeeping charges which hit the NZDF budgetary numbers, the real NZDF budget is not 1% GDP, but more like 0.6% - 0.7% GDP, in fact, in the 2012/13 budget, the Capital Charge was NZD$457 mil. This would have put the 'real' NZDF budget (not including one-time capital injections to purchase high cost kit items) at about NZD$1.6 bil. so the 'savings' plan would have amounted to about a quarter of the funding for the NZDF to carry out training, operations, maintenance, etc.

There does come a point where the demands placed on a service and the resources allocated to meet said demands are too far out of balance so that adjustments have to be made to either or both items. Given some of the recent statements, it seems like the pollies (or perhaps only some of them) have finally realized how far things have been taken in NZ.

-Cheers

 

[Gibbo]

That is one possible interpretation of the statement. Another is the gov't has realized that the 'savings' required of the NZDF is so high that it will negatively impact operations and/or kit upgrades and replacements and thus future operations.

Honestly IMO not too surprising that the 'savings' plan needed to be abandoned. A savings of NZD$400 mil. p.a. works out to ~16% of the 'official' NZDF budget, including the wretched Capital Charge and other charges (GCT IIRC). Given the size of the Capital Charge and other bookkeeping charges which hit the NZDF budgetary numbers, the real NZDF budget is not 1% GDP, but more like 0.6% - 0.7% GDP, in fact, in the 2012/13 budget, the Capital Charge was NZD$457 mil. This would have put the 'real' NZDF budget (not including one-time capital injections to purchase high cost kit items) at about NZD$1.6 bil. so the 'savings' plan would have amounted to about a quarter of the funding for the NZDF to carry out training, operations, maintenance, etc.

There does come a point where the demands placed on a service and the resources allocated to meet said demands are too far out of balance so that adjustments have to be made to either or both items. Given some of the recent statements, it seems like the pollies (or perhaps only some of them) have finally realized how far things have been taken in NZ.

-Cheers

Yes maybe it's just my perception of the official statements - totally agree the 'savings' target needed to be abandoned, but the phrase used in the documentation seems very vague - they state they will abandon the savings target but still work to make the savings - eh what!?! True politician / bureaucratic double-speak to me!

The inference about investment required to make the savings - something tells me that could be a suggestion of something like closing Woodbourne & moving functions to one of the other 2 bases (one would assume Ohakea most likely).

However that is pure speculation on my part so I guess we just need to wait & see.

 

[t68]

An interesting article on the economy of NZ and how some economists are expecting NZ to leap and bound next year. Hopefully this can translate over to the NZDF $$ wise time will tell

Wonder if it happens we will see an exodus of Kiwi workers back to the land of the long white cloud.

Cookies must be enabled. | The Australian

 

[ngatimozart]

An interesting article on the economy of NZ and how some economists are expecting NZ to leap and bound next year. Hopefully this can translate over to the NZDF $$ wise time will tell

Wonder if it happens we will see an exodus of Kiwi workers back to the land of the long white cloud.

Cookies must be enabled. | The Australian

Interesting. A while back the minister signalled in a speech that NZDF would have to recruit more personnel in the future to man and operate the new kit & capability that is on the way. But as always the proof of the pudding is in the eating and we have an election this year.

 

[MrConservative]

An interesting article on the economy of NZ and how some economists are expecting NZ to leap and bound next year. Hopefully this can translate over to the NZDF $$ wise time will tell

Wonder if it happens we will see an exodus of Kiwi workers back to the land of the long white cloud.

Cookies must be enabled. | The Australian

Returnee workers are already happening as the economy is starting to crank up its gears. Niece and husband came back to NZ last month after 7 years in Melbourne. Both skilled and had job offers after 2 weeks.

With the high Kiwi dollar in 2014/15 it is a good time to nail down major defence acquisitions contracts. However not much will happen until after the Election later in the year and it wont be until the 2015 Budget that Vote Defence will of course start to look more rosy.

 

[ngatimozart]

A high kiwi dollar is a double edged sword. It is good for imports such as defence equipment etc., however it pushes the prices of our exports up which makes it harder for the exporters, and it is ultimately them who earn the money to pay for our imports. Also the coming election is not a a foregone conclusion and sorry to rain on your parade Mr C, but if Labour do win the Treasury Benches then we'll see another lurch in defence policy and decline in defence capability. They will attempt to get rid of the frigates. They will can the ASW upgrades for the P3K2. That's their basic policy & nothings changed in their defence outlook since they were last in government. If the Greens retain or increase on their current number of MPs then they will have a major say in any coalition arrangement. The Kiwi Greens do not like defence. Sometimes I feel they like oil companies more.

 

[Ocean1Curse]

If I could add to what Nga was saying. The 35 billion in NZ government debt is a major function of budget problems. And any rise in currency would have a knee jerk reaction on interest rates meaning a rise in NZ government bonds repayments, it also would mitigate any benefit. *sigh*.

Effectively making it a triple edge sword. It's all a big Ponzi scheme on top of a ponzi schem. Winston Peters the last bastion of hope for the military has a balance of power in the next election but would still be a third stringer behind the greens and labour or the conservatives and national unless Winston can break 5% party vote, in which case his position would not be weakened.

For the most part it really looks like New Zealand is off setting some of it's defence responsibilities with increased trade so the US can deal with it. This trend is likely to rise in the future.
:daz

 

[ngatimozart]

If I could add to what Nga was saying. The 35 billion in NZ government debt is a major function of budget problems. And any rise in currency would have a knee jerk reaction on interest rates meaning a rise in NZ government bonds repayments, it also would mitigate any benefit. *sigh*.

Effectively making it a triple edge sword. It's all a big Ponzi scheme on top of a ponzi schem. Winston Peters the last bastion of hope for the military has a balance of power in the next election but would still be a third stringer behind the greens and labour or the conservatives and national unless Winston can break 5% party vote, in which case his position would not be weakened.

For the most part it really looks like New Zealand is off setting some of it's defence responsibilities with increased trade so the US can deal with it. This trend is likely to rise in the future.
:daz

I don't think Winston is that defence friendly. My thought is typical Winston - all smoke and mirrors. He was dead against the third (& 4th) ANZAC frigate purchase. IMHO whilst he's been in parliament during the MMP period I cannot personally recall him doing anything positive for NZDF. Having said that, yes Winston may end up being the king maker (again) and for the current govt to stay in, he needs to reach an agreement with National (politically that's the best option for NZDF). He knows that and his price will be high whilst he'll drag it out playing National off against Labour until he gets what he wants. I think he is the only real choice for National as a coalition partner, but if that happens whether the partnership survives a full term would be another story. IMHO politically the poor scenario for NZDF is a Labour - Greens govt by Xmas 2014.