What direction now for New Zealand Defence Policy and Capability?

With no new defence white paper in sight, in a world marked by Russian aggression in Europe and Chinese influence in the Pacific, Dr Peter Greener asks what is the direction for New Zealand defence policy and capability?

In March 2022, the Report of the Foreign Affairs, Defence and Trade Committee on the 2020/21 Annual Review of the Ministry of Defence and the NZDF, noted in the section headed ‘Strategic competition and co-operation in the Pacific’ that, “We heard that there will not be a white paper in 2022. However, Defence will be recommending to Ministers terms of reference that look at the development of defence policy settings in a more proactive approach, and the force structure that would support those settings.”

Last month I asked the following question in an earlier version of this article published on Incline: “Does this mean that there might be a new white paper in 2023, will we see another government defence policy statement, or will there be a revised defence capability plan?”

Shortly after going to press, the Minister of Defence Peeni Henare answered the question unequivocally in an article published on Friday 27 May on Stuff, where Thomas Manch noted that, “Henare said there would be no new Labour Government defence capability plan.”

This article then asks the question: What will the future direction be for New Zealand defence policy and capability?

The Ministry of Defence website notes that Defence policy settings in New Zealand are reviewed on a regular basis, and that, “The results of these reviews, Defence White Papers and Strategic Defence Policy Statements, are the highestlevel expression of Government’s Defence policy settings.” It notes that, “these policy documents will present an assessment of New Zealand’s strategic environment and set out at a high level the range of activities the New Zealand Defence Force must be prepared to undertake” before adding that, “The most recent formal expression of New Zealand’s Defence policy is the Strategic Defence Policy Statement 2018,” which was released by the Labour-led Coalition Government.

Unlike a white paper, the Strategic Defence Policy Statement 2018 (SDPS), although describing capability needs in general terms, did not set out in any detail the necessary mix of capabilities that the Defence Force would require.

It did, however, make the point that, “Cabinet will decide on replacing the Defence Force’s P-3 Orion maritime patrol aircraft capability.” In the same month that the SDPS was released, July 2018, the Government took the opportunity to approve the acquisition of four Boeing P-8A Poseidon maritime patrol aircraft to replace the Orions. The total estimated cost for the project was $2.346 billion.

The following year the Defence Capability Plan 2019 (DCP) was released. As I argued at the time, the Capability Plan provided perhaps the most comprehensive and clearly articulated argument for investment in the Defence portfolio in modern times. Not only was there a commitment to maintain the $20 billion in capital investment out to 2030 that had been indicated in the 2016 white paper, but beyond that the Plan also provided indicative investments out to 2035.

This was “to allow for considered, long term planning for the Defence Force’s future needs. These capabilities will be reassessed ahead of the 2022 Defence White Paper.” [my emphasis.]

Amongst the near-term investment decisions that were planned, the first to be mentioned was Future Tactical Air Mobility, the replacement of the current C-130H Hercules. A year later, on 5 June 2020, the Government announced that a fleet of five C-130J-30 would replace the ageing fleet of C-130H Hercules at an estimated project cost of NZ$1.521 billion.

The need to provide Protected Mobility for Army, replacing the armoured Pinsgauer, was another near-term decision that was signalled in the DCP. The decision to purchase a new fleet of 43 Australian-designed and built Bushmaster NZ5.5 was announced on 8 July 2020.

At the time Defence Minister Ron Mark noted, “The age and lack of protection offered by the old fleet make this another investment in New Zealand Defence Force capability that must be made in order to protect our service people.” Funding of $102.9 million was to be committed to the project at this time, though the indicative capital cost for the whole project was between $300 and $600 million.

By this point then, the Government had already committed $4 billion to new capability acquisitions, yet more investment decisions were planned for the near future. Of note in the Capability Plan these included the Enhanced Maritime Awareness Capability project and the Southern Ocean Patrol Vessel (SOPV).

The Enhanced Maritime Awareness Capability project was intended to “support the Government’s civil maritime security strategy, providing air surveillance capabilities that enhance all-ofGovernment maritime domain awareness in New Zealand and the Southern Ocean.” A number of capabilities were to be considered, including smaller manned aircraft, remotely piloted aircraft systems (RPAS) or satellites, at a cost estimated again to be between $300 and $600 million.

The Maritime Security Strategy 2020, officially launched on 17 June 2021, highlighted that “Cabinet has agreed to bring forward the investment in complementary air surveillance capability to ensure that delivery coincides with the arrival of the P-8As in 2023.”

The impact of the Covid-19 pandemic though had by this stage already made itself evident. The following month, July 2021, Defence Minister Peeni Henare told the Foreign Affairs, Defence and Trade Select Committee that whilst projects had not been cut from Defence Capability Plan 2019, it would be redrafted to align with Government priorities because of fiscal constraints due to the cost of the Covid-19 pandemic.

“We are not cutting back on the DCP. We’ve made it very clear that we want to be able to have a look at the DCP, review it but also looking to align it with Government priorities,” Thomas Manch reported the Minister saying.

It was clear though that major projects were being affected. There are now no details of the Enhanced Maritime Awareness Capability project available on the Ministry of Defence website.

An Official Information Act request to the Ministry elicited the following response on 4 March 2022: “The EMAC project is at an early stage and some of the information you have requested does not exist”, then adding “it is necessary to withhold existing information in full, as release would … prejudge Cabinet’s future decisions on the project”.

The Southern Ocean Patrol Vessel project has also been affected. The need for the SOVP was first raised in Defence White Paper 2016, whilst the Strategic Defence Policy Statement 2018 noted that the project to acquire an ice-strengthened ship was already underway. The Defence Capability Plan 2019 affirmed that the “Acquisition of a Southern Ocean Patrol Vessel will occur in the mid-2020s.”

However, on 22 March 2022, Reuters reported that Michael Swain, Deputy Secretary at the Ministry of Defence, had confirmed that further work on purchasing a Southern Ocean Patrol Vessel had been suspended.

“Due to the impact Covid-19 has had on the fiscal environment and emerging personnel pressures from other projects, this work has been deferred” he said. The Ministry’s website notes that, “The Southern Ocean Patrol Vessel project will continue to be considered in coming months.”

A further major development that was signalled in the DCP was the intent to grow the size of the Defence Force, with the wish to grow uniformed personnel by 1,500 – with 1,000 of these new troops increasing the size of the Army to 6,000 by 2035. Perhaps not surprisingly movement has been modest here, and much has been made of the impact of Defence personnel having to serve in Managed Isolation and Quarantine (MIQ) facilities.

Nonetheless, whilst in June 2019 the Regular Force had 9,328 in uniform, by April 2022 that had grown by 150 to 9,478. Over the same period though Army had only grown by four to 4,659.

In an interview with the author on 17 May 2022, the Opposition Spokesperson for Defence, Tim van de Molen, indicated that he wished to see Defence numbers grow in the future much more substantially than the 1,500 outlined in the DCP.

He went on to say, “I want to see a new Defence White Paper. With the acceleration of the impacts of climate change in our region and challenges to the global order, we need to re-assess what capabilities the Defence Force requires. We are in a very different strategic environment than we were even two years ago.” This was clearly the message of the Defence Assessment 2021, released last December.

Highlighting that increased strategic competition could lead to increasing confrontation, the Assessment drew attention to the growing need for enhanced capabilities in our immediate region. The Defence Minister told Thomas Manch on 27 May, “If we look towards growing our asset base now and our platforms, we actually don’t have the necessary skills and people to be able to man those assets.”

The Minister’s concerns to attend to pay and living conditions as set out in his 2021 Principles and Priorities are clearly necessary and may be addressed to an extent by this year’s Budget funding boost for Defence, though a nominal increase of 4 percent overall over several years will severely limit what can be achieved.

But what of other capabilities?

Given that the Government is dealing with the ramifications of a Covid-affected economy, it is perhaps not surprising that no commitments are being made at the moment on capital-intensive capability projects. However, in the Defence Capability Plan 2019 there was a commitment to maintain the $20 billion in capital investment out to 2030.

When speaking to the recent Budget announcement for funding of $662.5 million to maintain existing defence capabilities, the Minister of Defence highlighted that the Government had committed $4.5 billion to twelve major defence capability projects. Whilst this is indeed the largest capability investment Defence has ever had, it is somewhat short of the $20 billion pledged in the DCP.

Subsequently, when confirming that there would be no revised defence capability plan, and that the new funding would “keep the lights on”, the Minister said that “We’ve just had to look at it [the existing plan] with a different lens.”

So what will the balance of capability and resourcing actually look like? When it comes to the 2023 election, without a white paper or a revised capability plan, what will Labour’s Defence platform be?

Defence spending fell to its lowest level in recent times, at 1.11 percent of GDP, under the Nationalled government in 2011. However, in April this year National Party leader Christopher Luxon told the New Zealand Herald that National supported the idea of New Zealand lifting its level of defence spending, possibly to two percent of GDP (as it was three decades previously).

When asked by the Herald whether National could afford to increase spending levels, Luxon said that was “the conversation” that caucus was having.

In a world where Russia has changed the face of Europe and China seeks ever-greater influence in the Pacific, the question therefore remains, what will the future direction be for New Zealand defence policy and capability? This is a revised and updated version of an article first published last month on Incline.