Expensive new toys for the boys
The Defence Ministry does itself few favours by its seemingly chronic inability to manage its own procurement processes.
Last week, the Ardern government found it had inherited yet another cost blowout in the upgrading of our two frigates, which are due for replacement entirely – at further massive cost – within ten years.
As yet, it is unclear whether the new weapons and sensors we’re currently buying will be transferable to the new ships.
The numbers involved are huge. When signed off by the Clark government in 2008, the frigates upgrade was budgeted at $374 million. By June 2016, the cost had climbed to $472 million and the completion had been delayed by 13 months, to March 2019. Last week, the Ardern government learned the bill is now $639 million, with a likely completion date in 2020 – but don’t hold your breath.
On this single project, the cost of the over-runs alone ($265 million!) would transform our mental health services, or the resourcing of special needs education.
Worldwide, it seems that defence contractors routinely offer a low tender to get the officials and politicians on the hook, before ways are found to ratchet the bill steadily upwards. The politics of defence spending will always be difficult, regardless.
Some $20 billion has been earmarked for defence acquisitions over the next 20 years – for new frigates, new cargo planes to replace the C-130 Hercules and new surveillance aircraft to replace the P-3 Orions.
The Defence Ministry has yet to produce a credible threat to justify this expenditure. In fact, the 2014 Defence Force Assessment conceded (at paragraph 66) that the threats facing New Zealand are (a) limited and (b) of a nature that would give us ample time to upgrade and prepare for them, should the need ever arise.
‘‘Although there is no direct threat to our territorial integrity,’’ the report concluded, ‘‘New Zealand faces a range of other threats from state and nonstate actors, including cyber threats and terrorism.’’
If that’s an accurate assessment, it is difficult to understand how new frigates or cargo planes or spotter planes would protect us from the NZDF’s own prioritisation of (a) cyber threats or (b) terrorists at home, or abroad.
Even if the gear being acquired could defend us from such horrors – and it can’t – it is also difficult to regard hackers and jihadists and fishing zone predators as posing so deadly a threat to our national security as to justify the spending of $20 billion of allegedly scarce funds, on trying to combat them.
To most observers, it looks more like the Defence Force and its friends in government are rolling over our current force structure, and buying up the next generation of pricey new gear, in order to fulfil roles created back during the Cold War era.
PM Jacinda Ardern may need to step in. Thankfully, her government expects to be able to afford both its families package released last week, and these ongoing expenses in Defence.
In all likelihood, the taxpayers footing the bill would probably prefer to spend the money on social needs, rather than on maintaining our ability to take part in military war games, with spanking new gear.