Speech to the Defence Industry Association Conference of New Zealand
Since 1999, the Government has committed $7.6 billion under the Defence Long-Term Development Plan and the Defence Sustainability Initiative to transforming the Defence Force.
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Good afternoon Ladies and Gentlemen,
Thank you for the invitation to attend this year's Annual Defence Industry Association Conference.
Can I acknowledge the role played by the Defence Industry Association, the industry itself and the Defence Industry Committee responsible for tomorrow night's awards.
Strategic relationships between the Crown and New Zealand industry are important to maximise the benefits for Defence and the country of local industry capability, product development and services.
Industry has a key role in maintaining a modern, well-equipped and capable Defence Force.
A key focus of the partnership between local industry and defence is the major re-equipment programme underway now for the New Zealand Defence Force.
Since 1999, the Government has committed $7.6 billion under the Defence Long-Term Development Plan and the Defence Sustainability Initiative to transforming the Defence Force.
The Defence Force in 1999 was suffering from a decade of neglect and under-funding.
Its equipment was outdated. It was unable to provide the government with the range of military options required to meet today's security threats.
We were putting the lives of Defence Force personnel serving overseas unnecessarily at risk by not providing adequate equipment for them to carry out the roles government had given them responsibility to perform.
We had to put in place a comprehensive plan for reorganisation, reinvestment and rebuilding.
The direction we wanted to go was clear. We needed more resources, but we also needed to focus our resources in specific areas in which we could achieve excellence and add value to international efforts rather than try to do everything but spread our resources thinly.
In June 2000, the Government's Defence Policy Framework outlined the overarching, strategic direction for defence policy. It set out five objectives for the Defence Force:
. To defend New Zealand and to protect its people and territorial waters;
. To meet our alliance commitments to Australia;
. To assist in the maintenance of security in the South Pacific;
. To play an appropriate role in the maintenance of security in the Asia Pacific; and
. To contribute to global security.
The May 2001 Defence Statement identified the capabilities the Government needed to meet its strategic objectives in terms of maritime patrol, land forces and sea and airlift.
Priority has been given to force elements that are trained, equipped, and maintained at appropriate levels of combat viability and readiness.
First released in 2002 and updated last year, the Long-Term Development Plan is the planning tool that enabled the Government's vision for a re-equipped and reinvigorated defence force to be put in place.
It has provided a greater level of certainty to all involved.
It has also increased the information available to support appropriate capability development by New Zealand industry.
Since the advent of the Long-Term Development Plan in 2002, there has been a significant expansion of capability across the Defence Force.
We have advanced 28 major projects, including the delivery of Light Armoured Vehicles, Light Operational Vehicles, two Boeing 757 strategic transport aircraft, the upgrade of the P-3 Orion and C-130 Hercules fleets, the Javelin anti-armour missiles and the seven new ships which are part of Project Protector.
The 2006 LTDP update, released at this conference last year, has continued the significant progress made.
o The HMNZS Canterbury was commissioned on 12 June this year and is now commencing its introduction into service programme, involving a series of trials, training activities and exercises over the next 18 months.
o The first of the offshore patrol vessels, HMNZS Otago, was launched in Melbourne in November last year. The launch of the first inshore patrol vessel, the HMNZS Rotoiti, occurred in August. The launch of the second offshore patrol vessel, HMNZS Wellington, will take place later this month.
o The final components of the New Zealand Defence Force's Very Low Level Air Defence System have been delivered and the capability is now being made operational.
o The Boeing 757 aircraft are being converted from a straight passenger configuration to a combination passenger/freight role in the United States, with the aircraft returning in the first few months of 2008.
o The P3 Orion and C-130 Hercules upgrade projects are well underway.
o And Defence House, home to the Ministry of Defence and the New Zealand Defence Force in Aitken Street was opened in February this year.
The New Zealand defence industry has contributed to the development and delivery of many of these projects.
The Government remains committed to promoting opportunities for strong industry involvement, both in the acquisition and through-life operating and maintenance phases of many of our proposed procurements.
The remaining Project Protector vessels will be delivered over the next 12 months.
Project Protector alone will generate about $110 million of work for New Zealand industry on a range of equipment for all vessel types. To date 85 New Zealand companies from around the country have been involved in the project.
On this note, I would like to acknowledge the professional manner of the work being done by New Zealand contractors and their subcontractors.
As subcontractors to Tenix, for instance, Specialist Marine Interiors Ltd have done an excellent job designing the interior of the Navy's new Inshore Patrol Craft.
Also worth $110 million is Safe Air's new six-year contract with the Royal New Zealand Air Force for spares management and maintenance work on the C-130, P-3 Orion and UH-1 helicopter fleets. This is the largest defence aerospace contract ever awarded in New Zealand.
Becca Applied industries is engaged in software development and ongoing support as part of the project.
In terms infrastructure, Cabinet will shortly consider a package of essential development projects at Ohakea Air Base, which will obviously provide significant opportunities for New Zealand industry.
Another area of local industry involvement vital to the operation of the New Zealand Defence Force is the ongoing support provided at camps and bases.
There is Vospers at Devonport Naval Base, SERCO at Army bases and Safe Air Ltd for the Air Force. These organisations are critical enablers, freeing up our Defence Force personnel and allowing them to focus on their core business.
Our camps and bases could not efficiently operate without their support.
The next twelve months will continue to be a very busy time for Defence and our local industry partners.
Preparations for the upgrade of the New Zealand ANZAC frigates are underway. The upgrades include three projects on the 2006 Long-Term Development Plan - the Close-In Weapon System upgrade, Platform Systems upgrade and the Self-Defence upgrade.
The upgrade of the ANZAC's Close-In Weapon System will provide defence against close proximity sea or air strikes, including by terrorists.
The Platform Systems upgrade will involve the renewal of the ANZAC's engines. Systems to be upgraded also include the weapons cooling system, the environmental air conditioning, power generation and conversion, damage control and fire fighting.
Finally, the Self-Defence upgrade will enhance the ANZAC's mission systems, providing each frigate with the ability to defend itself against increasingly sophisticated anti-ship systems.
The total upgrade package for the ANZAC frigates equates around $600 million of capital and operating expenditure over the next six years. The package will maintain the Government's investment in a practical and balanced naval fleet, which is able to operate across the full spectrum of operations.
The next few months will also see a contract signed for the training and light utility helicopters, as will the tender for the Army engineering gap crossing equipment.
For some companies, their involvement in New Zealand Defence Force capability projects has translated into international success. One of many such success stories is Surveylab's long range GPS camera, which is operational with the armed forces of Canada, the United Kingdom and the United States.
I would also like to acknowledge the work of Marops Ltd, acting as an in-country support contractor to CarteNav Solutions of Canada as they supply the state of the art navigation and mapping systems for our P3 Orion fleet.
My congratulations to the small to medium enterprises now exporting to the international defence and security markets. Among those exporting to Australia, the United States and other markets are high tech and communication companies such as Bluewater Systems and Flightcell New Zealand, from Christchurch, Zephyr Technologies from Auckland.
In New Zealand, while new capabilities are being initiated and delivered, it will also be a period of consolidation as the Defence Force integrates these capabilities with others that have yet to come into service.
The New Zealand Defence Force will be helped in this by the certainly of funding provided by the Defence Sustainability Initiative.
Additional operational funding of $4.4 billion dollars over ten years has helped to stabilise, and is now beginning to increase, New Zealand Defence Force personnel numbers, as well as re-build infrastructure, and increase reserve stocks.
Unlike the major equipment projects, the bulk of the new DSI funding is being spent in New Zealand, creating further opportunities for New Zealand suppliers and contractors.
Looking ahead, Defence will continue to face challenges over the coming year.
New Zealand Defence Force personnel remain in service in significant numbers in Solomon Islands, Timor-Leste and Afghanistan.
Air assets will be under some pressure. While having both the C-130 Hercules and the Boeing 757s out of action as they're upgraded overseas, the Air Force will continue to provide support to Antarctic operations, respond to short notice requests and meet our maritime surveillance commitments at home and in the South Pacific.
A key challenge will be to ensure the continued recovery of New Zealand Defence Force capabilities within the DSI funding package. Inflationary pressures, and the additional costs associated with the introduction of new and upgraded capabilities have to be dealt with.
The New Zealand Defence Force is undertaking reviews to seek out efficiencies to enable further resources to be provided towards the continued recovery of capability.
That process is necessary to guarantee to the taxpayer that we are providing service effectively and efficiently, making the best use of funding provided.
In conclusion, we have in international terms a small but highly trained and capable Defence Force.
Our strength is our well earned reputation to do the tasks set for us in a disciplined, professional and effective manner.
Thank you for the support we have received from the companies you collectively represent in meeting the challenges we face, and for your contribution to re-building the New Zealand Defence Force.
I welcome the ongoing partnership between industry and the Government, and look forward to its continuation over the coming year.
Finally, I extend my best wishes to those nominated for Defence Industry Awards of Excellence to be presented at tomorrow night's dinner.