Defence capability investment and the role of industry

In New Zealand there is a great story of industry working in partnership with Defence to deliver value to the community, the nation, and the world. We just need to get better at telling it, writes Minister of Defence Ron Mark.

Launched in June, the Defence Capability Plan 2019 set out the Coalition Government’s vision for the future Defence Force.

The Plan was the outcome of a comprehensive review of the Defence procurement programme and the policies underpinning it. That review was signalled in the Coalition Agreement signed in October 2017.

The end result is a government commitment to renew all of the Defence Force’s major capabilities, as well as regenerate the Defence Estate.

While the Defence Capability Plan maintains the envelope of $20 billion in new investment out to 2030, it gives that investment a much sharper and human focus. It recognises the vital role the Defence Force plays in promoting the overall well-being and resilience of New Zealand, its communities and the environment.

Harnessing the collective skills and energy of our people – Regular Force, Reserve Force, and civilians – starts from having a robust plan and a track record of delivery. Defence industry is a key part of that plan.

I am very proud to say that our track record on implementing the 2019 Defence Capability Plan has included some of the biggest decisions in over 35 years. Since coming to Office, the Coalition Government has approved contracts with industry worth over $3 billion in new military capability and infrastructure.

The decision to acquire the P-8 Poseidon aircraft demonstrates this Government’s commitment to a combat capable Defence Force that is flexible and can support security for New Zealand and the South Pacific, whilst also contributing to efforts to reinforce the international rules based order.

Investment in infrastructure to support the P-8 capability will inject over $300 million into the Manawatu and Rangitikei regions, while the through-life dividend could be four times that. That investment commenced on Friday with the turning of soil to start the infrastructure build at Ohakea for the P-8 capability.

The Government has also announced the C-130J Super Hercules as the preferred option for the replacement of our aging C-130H Hercules aircraft.

Other highlights in delivering on our ambitions for the future Defence Force include the purchase and delivery of a new dive and hydrographic vessel, HMNZS Manawanui, the naming and commencement of sea trials for HMNZS Aotearoa, the build of an NH90 Flight Training Simulator, the Frigate Systems Upgrade, and, as part of the Network Enabled Army programme, the further rollout of a modern communications and combat management system for our soldiers.

We have also started early industry engagement on the Southern Ocean Patrol Vessel.

In light of the Government’s commitment to implementing the Defence Capability Plan, business confidence in the sector should be high.

For every dollar spent on new capability, three to four dollars are spent supporting it through life.

Currently over 2,000 suppliers are engaged in supporting our air, land and maritime capabilities. These suppliers range in size from one to over 500 staff. They are based not only in the major centres, but also in regional hubs in Whangarei, Hamilton, Palmerston North, Blenheim and Nelson.

In Whangarei, McKay Electrical has a workforce of over 300 people providing electrical services to the marine and naval sectors. In Palmerston North, Noske Kaeser employs 25 locals in building and supporting marine and transport heating and ventilation systems.

And in Hamilton, two very different companies, Tidd Ross Todd and Loop Technologies between them employ over 300 people in manufacturing transport systems and repairing and reengineering electrical systems.

Many suppliers to the Defence Force are also exporting their products and services into Australia and further afield.

I am told that the Defence sector generates $125 million in wages, and $60 million in profits. I suspect these numbers are much higher. I am also confident that on the back of the Government’s investment in Defence these figures will grow.

There is a great story here of industry working in partnership with Defence to deliver value to the Community, Nation, and World. We need to get better at telling that story.

Defence industry is often based, or with a base, in New Zealand employing New Zealanders and supporting a local supply chain. Industry is often at the forefront of technological innovation, both at home and overseas, much of which has not just a military application, but very often evolves in other ways into a civil or commercial application.

And not only does industry supply goods and services to the Ministry of Defence and the New Zealand Defence Force, but they actively encourage and support their staff that are members of the New Zealand Defence Force Reserves and New Zealand Cadet Force.

Without that support our Reserves could not train and our Cadet Forces would cease to operate.

And firms involved with defence also support the Defence Force’s Youth Development Unit and the Ministry of Social Development in helping our young people turn their lives around through the Limited Service Volunteer programme, which we have doubled in size.

So the community benefits of defence and defence industry are wide and deep. This is a very exciting time for all of those involved in Defence, and in delivering the right military capability for New Zealand and our region.

The investment decisions already taken by the Coalition Government are evidence of our commitment to ensuring that New Zealand has the Defence Force it needs to deliver value to the Community, Nation, and World.

Further decisions to come on the Future Air Mobility Capability, the Enhanced Maritime Awareness Capability, and a Protected Mobility Capability, and many smaller decisions will continue this momentum.

At the heart of delivering these capabilities are the people of the Ministry of Defence and the New Zealand Defence Force, supported by industry and employers, big and small. Against this backdrop, I am confident that the high ambition set out in the 2019 Defence Capability Plan is achievable and that the pay-off will be great for both the New Zealand Defence Force, industry, and the communities they support.