Budget “a ringing endorsement of the Defence Force from the Coalition Government”

It is notable that this refers to ‘Coalition Government’ – Greens are not a part of the coalition. While NZ First and Grant Robertson have tried to talk up the Defence budget it has been described as “money for a frigate upgrade cost overrun, some joint training and another 800 LSV trainees”.

Minister of Defence Ron Mark talked up the budget allocation for the Defence Force.

Enhancing Defence Force capability

New Zealand’s Defence Force can continue making meaningful contributions to global security and peacekeeping efforts, and respond effectively to events like natural disasters, as a result of Budget 2018 funding, says Defence Minister Ron Mark.

Budget 2018 provides a $367.7 million operating funding boost to the Defence and Veterans portfolios over the next four years, underpinned by an extra $324.1 million for the New Zealand Defence Forces’ operating budget. In addition, Budget 2018 provides $42.3 million in new capital funding for modernisation.

“The extra funding is going to go a long way towards helping the Defence Force meet increasing demand across a range of tasks,” Ron Mark says.

“The funding announced today is also a huge win for conservation, the environment and fisheries protection.

Alongside the increase of $324.1 million in the Defence Force operating budget, Budget 2018 also sees:

  • $41.3 million additional capital investment for the first tranche of investment under the Defence Estate Regeneration Programme Plan
  • an additional $22.6 million operating funding over the next four years and $1.0 million capital funding for the Defence Force to deliver the enhanced Limited Service Volunteer programme (supported by a related investment of $4.2 million over the next four years for the Ministry of Social Development to administer the programme)
  • as announced earlier, $1.1 million in grants to the Royal New Zealand Returned & Services Association (RSA) and No Duff Charitable Trust over the next four years to support the services they provide to veterans – $250,000 for the RSA and $25,000 for No Duff Charitable Trust annually (This initiative was announced before Budget Day.)
  • $6.3 million in 2018/19 for the repatriation of the remains of service personnel and their dependents for those buried overseas since 1955
  • $13.6 million over the next four years set aside for new capabilities.

“This is a ringing endorsement of the Defence Force from the Coalition Government. It recognises the value it provides New Zealand and its meaningful contributions to peace and security around the world,” says Ron Mark.

Defence got a few mentions in the budget speeches in parliament on Thursday.

Grant Robertson:

New Zealand’s Defence Force will be able to make more meaningful contributions to global security and peacekeeping, and better respond to natural disasters, with a $345 million operating funding boost to the Defence and Veterans portfolios over the next four years, including, in partnership with the Ministry of Social Development, funding to expand the Limited Service Volunteer programme for young people under 25.

It didn’t rate a mention from Simon Bridges

Winston Peters:

Can I just say it was clear as daylight that the National Party had been hiding the costing—$20 billion, for example, when it comes to the Defence Force, was a fiscal risk. It wasn’t even budgeted for. Then he had a frigate that was overrun by, and costing, $148 million, and they kept it quiet from the public from July last year all the way to election day.

We’ve got, for example, the things that also matter in defence. That’s a substantial boost in a critical area, which means that our defence capacity in the Pacific—so desperately needed by so many Pacific Islands and by the Pacific itself—can now show up responsibly.

That’s it.

However on his ‘National Security’ blog Simon Ewing Jarvie is quite scathing.

Politics, Defence & Budget 2018

The political fate of New Zealand’s Defence rests in two simple questions. The first is how important defence is in the scheme of the current government’s political priorities and the second is how much influence the current Defence Minister has.

Take a look at past behaviour of Government parties as an indicator of the future. Labour’s choices have often seen a reduction in combat capability – think air combat force for example. NZ First talks tough but, when in coalition with National, vetoed the acquisition of the second two ANZAC frigates. At least the Greens are up front in their disarmament desires.

It is clear that Defence is not a high priority for this Government. That’s concerning because there are some important decisions to be made about platform replacement. Good ministers can get money for their portfolios. Putting aside this year’s abysmal budget result, how is Ron Mark placed in the machinery of Government?

First, the general view is that Ron, Jacinda Ardern and Grant Robertson aren’t exactly drinking buddies so there’s not likely to be any favours done for Defence in that department. The relationship between NZ First and Greens is toxic at the best of times and Defence is right in the middle of that.

I can’t see Ron Mark and Golriz Ghahraman (Green’s Defence Spokesperson) nutting out an accord over a herbal tea anytime soon.

So that brings it back to how Ron is able to leverage NZ First’s support for the Government. Unfortunately, Ron Mark’s star, within his own party, appears to be waning. Were it not, Peters wouldn’t have stood back and let Fletcher Tabuteau roll Mark as Deputy Leader. NZ First got heaps of concessions out of Labour in Budget 2018 but they weren’t going to die in a ditch for Ron Mark or Defence. It’s unlikely that anything is going to change there.

For all the bold election campaign statements by NZ First, Ron Mark got money for a frigate upgrade cost overrun, some joint training and another 800 LSV trainees.

He highlights a lowlight:

$148 million over four years is listed as a new initiative. It is actually the value of the cost overrun for the ANZAC frigate upgrade so it’s not generating any capability that wasn’t already signed up to.

Not only is this not new spending, it’s actually caused a degradation in other Defence capability development. That’s because as part of their ‘kiss and make up’ exercise, the MOD agreed to reduce the specs on the new littoral operations vessel from a purpose-built military specification to a commercially available hydrographic and dive support vessel to ‘save’ a similar amount of money. In December, Mark attacked the previous Government over the frigates saying “it means the lives of men and women were now being compromised”. How can he possibly reconcile that with sending sailors into threat zones in a vessel not designed for self-defence and survivability? You can’t paint it grey and call it a warship.

Grey lipstick on a war pig.

The bulk of the money allocated for acquisition to MOD is for the construction of the new maritime sustainment vessel, HMNZS Aotearoa. Apart from a few legacy projects, there is nothing for the big ticket items listed in the 2016 Defence White Paper.

Finally, but very important, is personnel costs. These are currently about $1b of the cost of running defence. Is there, in effect, a pay freeze? Or, will the operating funds have to be used to retain ‘he tangata’. NZ First campaigned on this and has delivered nothing.

Don’t forget, also, about the ‘drag’ that capital charge and depreciation is having on NZDF’s funds.