report of the new zealand defence forceannual report 2004 — 2005 annual report 2004 — 2005 g.55...

ANNUAL REPORT 2004 — 2005


G.55

Report of the

New Zealand Defence ForceTe O p e K a a t u a o A o t e a r o afor the year ended 30 June 2005

Presented to the House of Representatives pursuant to Section 39 of the Public Finance Act 1989 and Section 91 of the Defence Act 1990

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NEW ZEALAND DEFENCE FORCE


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Contents

Preliminary Pages 1

List of Abbreviations 4

Section 1 CDF Overview 7

Introduction 7

Strategic Environment 7

Achievements 8

Contributions to High Level Outcomes 8

Significant Operations 9

Support to Communities 10

Defence Capability and Resourcing Review 10

Defence Organisation 10

Military Capability 11

Personnel 11

Equipment 11

Managing Corporate Risks 12

Conclusion 12

Section 2 Defence at a Glance 15

Linkages to Government Policy 15

Royal New Zealand Navy 18

New Zealand Army 20

Royal New Zealand Air Force 22

Joint Forces New Zealand 24

Operational Deployments 2004/05 25

Forces and Locations 26

NZDF Organisation 28

Navy Organisation 29

Army Organisation 30

Air Force Organisation 31

HQ JFNZ Organisation 32

Personnel Summary 33

Expenditure Summary 34

Statutory Committees 35

Availability of Information 35

Legislation Administered by NZDF 36

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Contents

Section 3 Key Priorities 39

KP 1: Defence Policy 40

KP 2: Personnel 41

KP 3: Military Capability 45

KP 4: Defence Diplomacy 47

KP 5: Efficiency and Effectiveness 50

Section 4 Statements of Service Performance 53

Military Capability 53

Performance Measurement 53

D1: Military Policy Development, Coordination and Advice 55

D2: Naval Combat Forces 58

D3: Naval Support Forces 63

D4: MCM, Diving and Diving Support Forces 66

D6: Hydrographic Data Collection and Processing 70

D7: Land Combat Forces 73

D8: Land Combat Support Forces 76

D9: Land Combat Service Support Forces 80

D10: Specialised Forces 83

D12: Maritime Patrol Forces 86

D13: Fixed Wing Transport Forces 90

D14: Rotary Wing Transport Forces 94

D15: Miscellaneous Support Activities 97

D16: Operationally Deployed Forces 100

Services in Support of the Government and the Community 104

Section 5 Veterans’ Affairs 111

Information and Management, and Accountability 111

Linkages to Government Policy and Outcomes 111

Outcomes 112

Statement of Objectives and Service Performance 114

Section 6 Financial Statements 125

Statement of Accounting Policies 125

Financial Statements 129

Notes to Financial Statements 139

Statement of Responsibility 149

Report of the Auditor General 150

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List of Abbreviations

Abbreviation Definition

ACC Air Component Commander

AE Aeromedical Evacuation

ARF ASEAN Regional Forum

C2 Command and Control

C4 Command, Control, Communications and Computers

CA Chief of Army (Note 1)

CAF Chief of Air Force (Note 1)

CDF Chief of Defence Force

CIS Communications and Information Systems

CMF Capability Management Framework

CMIS Corporate Management Information System

CN Chief of Navy (Note 1)

COMJFNZ Commander Joint Forces New Zealand

CONPLAN Contingency Plan

CPMS Corporate Performance Management System

CT Counter-Terrorist/ism

DOC Department of Conservation

DPS Defence Planning System

DTA Defence Technology Agency

EC Employment Context

ECB Executive Capability Board

EEZ Exclusive Economic Zone

EOD Explosive Ordnance Disposal (Refers to military weapons. See also IEDD)

FAC Forward Air Control

FPDA Five Power Defence Arrangements

HMNZS Her Majesty’s New Zealand Ship

HQ NZDF Headquarters New Zealand Defence Force

HQ JFNZ Headquarters Joint Forces New Zealand

IEDD Improvised Explosive Device Disposal. See also EOD

IPC Inshore Patrol Craft

ISAF International Security Assistance Force

ISR Intelligence, Surveillance and Reconnaissance

JCCS Joint Command and Control System

JGSF Joint Geospatial Support Facility

JISA Joint Information Systems Agency

JMETL Joint Mission Essential Task List

KMA Key Measurement Area (OPRES)

KP Key Priority

KPI Key Performance Indicator (OPRES)

LCC Land Component Commander

LFG Land Force Group

LINZ Land Information New Zealand

Note: The titles Chief of Navy (CN), Chief of Army (CA), and Chief of Air Force (CAF) were adopted in March 2003 to more accurately reflect the focus and role of those appointments. For legal purposes these titles refer to the Chief of Naval Staff, the Chief of General Staff, and the Chief of Air Staff as appointed under Section 28 of the Defence Act 1990.



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List of Abbreviations

Abbreviation Definition

LOC:

– BLOC

– DLOC

– OLOC

Level of Capability:

– Basic Level of Capability

– Directed Level of Capability

– Operational Level of Capability

LSV Limited Service Volunteer

LTDP Long Term Development Plan

MAO&T Multi-Agency Operations and Tasks

MAP Mutual Assistance Programme

MAS Master Activity Schedule

MCC Maritime Component Commander

MCAIS Mine Clearance Automated Information System

MCM Mine Counter Measures

MET/s Mission Essential Task/s

METL/s Mission Essential Task List/s

MICC Maritime Intelligence Co-ordination Centre

MIO Maritime Interception Operations

MoD Ministry of Defence

MPF Maritime Patrol Force

MSD Ministry of Social Development

NCF Naval Combat Force

NMCC National Maritime Coordination Centre

NRCC National Rescue Coordination Centre

NZCF New Zealand Cadet Forces

NZDF New Zealand Defence Force

NZLAV New Zealand Light Armoured Vehicle

ODT Operational Diving Team

OEF Operation Enduring Freedom

OPRES Operational Preparedness Reporting System

PRT Provincial Reconstruction Team

RAN Royal Australian Navy

RASA Review of Accountabilities and Structural Arrangements between the NZDF and the MOD

RF Regular Force

RNZAF Royal New Zealand Air Force

RNZN Royal New Zealand Navy

RNZNVR Royal New Zealand Naval Volunteer Reserve

RNZRSA Royal New Zealand Returned Services Association

SAS Special Air Service

SOI Statement of Intent

SME Specialist Military Equipment

TF Territorial Force

UN United Nations

UNMO United Nations Military Observer

VANZ Veterans’ Affairs New Zealand

VCDF Vice Chief of Defence Force

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SECTION 1Overview by the Chief of Defence Force

Introduction

The year 2004/2005 has seen the New Zealand Defence Force continuing its commitment to a diverse range of operations, both within New Zealand and overseas. Our operational activities have included our contributions to the war against terrorism, United Nations reconstruction tasks, and demining and peace keeping operations. NZDF personnel also provided assistance to the earthquake-induced tsunami in the Indian Ocean on 26 December 2004, and disaster relief assistance in support of Civil Defence emergencies in the Eastern Bay of Plenty and Northern Wairarapa in July 2004/May 2005 and September 2004 respectively. Over 570 NZDF personnel were involved in the ceremonial events surrounding the return of the Unknown Warrior during November 2004. Our highly trained and skilled service personnel are in keen demand and they continue to bring huge credit to New Zealand. These commitments often come at a cost to the personnel deployed, their families and those who support them. Through their efforts the NZDF is able to represent New Zealand with distinction while assisting overseas and supporting our communities at home. I am proud of what all our service and civilian personnel have achieved.

The process of rebuilding and modernising the NZDF continues. During 2004/05, the Light Armoured Vehicles (LAVs) and some

of the Light Operational Vehicles (LOVs) for the Army have been introduced into service. In addition, the construction of the Navy’s new Multi-Role Vessel and Offshore and Inshore Patrol Vessels is on target, as is the upgrading of the Air Force’s C-130 Hercules and P3K Orion aircraft. The Government also announced that the NH90 helicopter is the preferred medium helicopter for the Air Force.

The major defence planning project during 2004/2005 was the Defence Capability and Resourcing Review (DCARR). This review identified significant funding opportunities to ensure the delivery of NZDF outputs via the Defence Funding Package commencing from FY 2005/06. In summary, this package will increase the NZDF’s nominal baseline each year for the next 10 years and will provide the NZDF with a high degree of assurance on funding into the future. It will enable us to recover organisational capability that will ensure that operational effectiveness is rebuilt through skilled personnel and new and upgraded equipment and infrastructure. In tandem with this, there is a need to develop more robust resource management processes and – in close collaboration with the Ministry of Defence – the development of more effective strategic planning and information technology systems.

The following sections outline our progress over the past year and I look forward to the challenges that lie ahead.

Strategic Environment

Defence and foreign policy are a partnership working in a comprehensive way to secure our territorial, economic, social and cultural interests, and meet our collective and global responsibilities. We are committed to the principles and obligations of the United Nations Charter and, despite the comparatively small size of the NZDF, have consistently demonstrated over many years that we are prepared to use our capabilities to defend those principles. In particular, our participation in United Nations and other appropriate multi-national peace support operations reinforces our wider commitment to collective security, and our credentials as a good international citizen. Peacekeeping complements and strengthens New Zealand’s profile in areas of considerable international tension such as the Middle East, the Balkans and Africa. Our contributions in Afghanistan and Iraq are examples of our preparedness to uphold the principles of the United Nations, international law and collective responsibility.

While New Zealand did not face any direct military threat, a growing number of transnational security challenges, with implications for New Zealand, has created an increasingly complex and uncertain strategic environment.

International terrorism, in particular, remained a significant and serious threat to our region. The Government has determined that combating international terrorism is a policy priority. For this reason, the deployment

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of NZDF personnel and assets in support of Operation Enduring Freedom (OEF) remained an operational priority, with a number of NZDF force elements deployed. The countering of terrorism, however, is not primarily a defence issue. The deployment of the NZDF is only one of a range of options open to the Government, all of which are being drawn together into a coherent strategy.

The lesson of Afghanistan is that failed states are more than a humanitarian tragedy; they can also threaten international peace and security. Closer to home, this lesson is being applied in the Solomon Islands where ethnic conflict, the failure of law and order and economic collapse led to the provision of assistance. The Australian–led Regional Assistance Mission in the Solomon Islands, to which the NZDF has been a major contributor – together with the NZ Police – is a Pacific response to a neighbour’s request for help.

At a regional level, the Pacific will continue to be a key focus for the NZDF. The Government’s Defence Policy Framework 2000 states: “New Zealand has special obligations to its Pacific neighbours to assist in maintaining peace, preserving the environment, promoting good governance and helping economic wellbeing. We want a secure neighbourhood and we must work towards that end”. New Zealand has formal constitutional obligations for the defence of the Cook Islands, Niue and Tokelau. The Treaty of Friendship with Samoa brings a responsibility to consider sympathetically any requests for defence assistance by the Government of Samoa. We are also committed to consulting regularly with our Island neighbours on defence and security issues, including advice on apparent security risks. In the wider Pacific region, New Zealand met its international obligations by providing assistance with the surveillance of Pacific Exclusive Economic Zones, disaster relief, maritime search and rescue, and peacekeeping.

The impact of globalisation on the South Pacific has transformed the security environment in the region. While globalisation offers the opportunity to reduce the region’s sense of isolation, it is bringing the world’s problems with it, including transnational threats such as organised crime, money laundering, and the illegal movement of people and goods, all of which have links to terrorism in other regions. The challenge for the New Zealand Government will be to maintain ready and capable agencies, including the NZDF, to help our Pacific neighbours tackle these issues, along with other emergencies–such as disaster relief. To do this New Zealand needs partners.

There is no strategic partnership in our region closer than that between Australia and New Zealand. Bound together by geography and history, by values, beliefs and interests, and by the close relationships between our peoples, we have a tradition of mutual commitment to each other’s security and of working together in pursuit of shared strategic interests. We must work closely with Australia to promote a secure and stable neighbourhood. The NZDF continues to give priority to strengthening the sinews of cooperation with the Australian Defence Force. The Solomon Islands crisis and the tragic and devastating Tsunami on Boxing Day 2004 are good examples of the need to work together and where we did we operated closely with the Australian Defence Force to respond in a timely and co-ordinated fashion to a range of contingencies.

New Zealand continues to be an active participant in measures designed to reinforce peace and stability in Southeast Asia. The ASEAN Regional Forum, with its broad regional membership, provides opportunities for New Zealand to work with other forum members in countering terrorism and transnational crime, and promoting regional security through participation in confidence building measures. The NZDF continues an active role in the Five Power Defence Arrangements with Australia, Malaysia, Singapore and the United Kingdom, as our major point of defence contact in Southeast Asia. Over the last year we conducted a variety of exercises to support this. We also actively engaged in the Western Pacific Naval Symposium with its emphasis on maritime security cooperation, and we participate in the Proliferation Security Initiative, which seeks to prevent the proliferation of weapons of mass destruction.

Further north, our maturing defence relations with China, Japan and Republic of Korea, enhanced through regular defence contact and dialogue, add an important dimension to New Zealand’s engagement in North Asia. They underscore our commitment to peaceful interaction in a region of substantial and growing significance to New Zealand. The NZDF’s contribution to the United Nations Command in the Republic of Korea underlines the Government’s commitment to the Armistice Agreement and to peace on the Korean Peninsula. A combined joint exercise in June 2005 involving 613 Squadron of the Republic of Korea Navy and our No. 5 Squadron has further strengthened this commitment. Furthermore, the establishment of a defence attaché position in Tokyo in February 2005 is indicative of our growing defence links with Japan.

The demands on the NZDF are likely to intensify as we continue to play our part in the campaign against international terrorism, and deal with its root causes. With the broadening of security definitions in the post-Cold War era to include transnational crime, the NZDF will be called on to do more in the future to deal with those threats, particularly in the South Pacific.

Achievements

Contributions to High Level Outcomes

The NZDF has contributed to Key Government Goal Number 1: “To Strengthen National Identity – celebrate our identity in a world as people who support and defend freedom and fairness”, through the Main High Level Outcome: New Zealand Secure and Protected from External Threats now and in the Future.

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The NZDF has contributed to the High Level Outcome through the delivery of annual outputs that provide prime or major contributions to NZ sovereignty protection, deterrence, incident or crisis response, counter-terrorism, civil defence and other such emergencies. The NZDF accomplished this by the deterrent effect of a credible Defence Force and the demonstrated ability to take action where appropriate. Over the past year the NZDF has dealt with a number of high profile search and rescues, assistance to flood affected regions in NZ and Improvised Explosive Device Destruction (IEDD) incidents to highlight a few.

A highlight during the year was the joint-Service operation to bring home an unidentified New Zealander known as the Unknown Warrior. Of the approximately 12,000 New Zealand fatalities on the Western Front during World War 1, there were many whose identity could not be determined. One of them was selected to be returned to New Zealand. Thousands of people turned out to Parliament to pay their respects and some 100,000 lined the streets to watch the Unknown Warrior being escorted by a Tri-Service escort and guard party to his tomb at the National War Memorial. Silent tears and an eerie silence underscored the huge level of national pride and respect for the military in defending the Nation’s freedom and values. The final journey of the Unknown Warrior is illustrated by a selection of photographs throughout this report.

Australia remains New Zealand’s closest and most important security partner and the two countries acting together in synergy are able to influence events in the South Pacific and Asia -Pacific regions of mutual interest. Our capacity to act together was enhanced through combined exercises such as Tasmanex and Swift Eagle, personnel exchanges, and co-operation under the umbrella of Closer Defence Relations.

The NZDF also contributes to a more secure and stable world by providing contributions to collective security operations, peacekeeping, and peace-enforcement conducted by the United Nations, other multinational agencies, and coalitions.

As a consequence of the experience and skill base possessed by the NZDF we are able to deliver assistance for international humanitarian relief, as was the case with the Tsunami relief operations. NZ responded expeditiously to the request for assistance and consequently was one of the first countries on the ground providing aid. This was appreciated by the affected countries and further highlights our role as a good international citizen. We have also provided assistance to search and rescue and disaster relief in the South Pacific.

The exercise scenarios with the Five Power Defence Arrangement (FPDA) are moving towards jointness in conventional operations while at the same time exercise scenarios are being developed that will involve an inter-agency approach for countering non-conventional threats.

The NZDF, in concert with other NZ Government agencies, contributed to the Proliferation Security Initiative (PSI) by participating in the Operation Experts Group (OEG) as well as by contributing observers on exercises in Japan and Singapore.

The NZDF provided training and development assistance throughout the Asian-Pacific region through the Mutual Assistance Programme (MAP). This is a programme, which responds to requests for training from partner countries.

Significant Operations

We have maintained a high level of operational tempo over the past year that has seen our commitment to traditional peace support operations and the international war on terror continue.

In the Solomon Islands we continue to provide the deputy commander of the Regional Assistance Mission Solomon Islands (RAMSI) and for a period of three months an infantry platoon was deployed to support the police-led operation to assist in establishing a secure environment.

In Afghanistan we provided humanitarian assistance with an NZDF tri-Service PRT based in the Bamian province. Now in its fifth rotation, the team is actively engaged with New Zealand and international humanitarian organisations to provide a secure environment where meaningful reconstruction and assistance can be given. Our staff officers continue to serve in both the Coalition and International Security Assistance Force (ISAF) Headquarters. In addition, our SAS has deployed in 2004 and again in 2005, and NZDF personnel are helping to train the Afghan National Army (ANA). All of these contributions are helping to shape an improved security environment.

In Iraq, the NZ Army Engineers assisted with the humanitarian and reconstruction effort in Basra. Working under the umbrella of a United Kingdom Engineer Regiment, our engineers restored water and essential services to schools and critical facilities, such as hospitals and bridges. The Light Engineer Group (LEG) returned to NZ in September 2004 knowing that their efforts had undoubtedly made life better for the Iraqis in the areas in which they had operated.

In August 2004, HMNZS TE MANA completed an operational tour of duty in the Gulf region and again made a contribution to maritime interdiction operations in support of the international campaign against terrorism. The deployment complemented the previous tours of operational duty already conducted in the Gulf by HMNZ Ships TE MANA and TE KAHA, and the RNZAF P3 Orions, and their crews. C130 Hercules air transport aircraft continue to provide support to NZ and coalition forces in Afghanistan from time to time.

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We have also continued to maintain our global commitments to Peace Support Operations. NZDF personnel remain deployed on a number of other missions in the Middle East, Africa, the Balkans, South East Asia and Timor Leste. Our personnel were employed as United Nations Military Observers, De-Mining Advisors, Trainers and Staff Officers.

After the 2004 Boxing Day Tsunami struck South East Asia the NZDF provided air transport, engineers and a medical team to assist with the relief operations in Aceh and Thailand. This was an excellent example of an expeditious response by the NZDF as part of the Whole of Government approach to providing disaster response and demonstrated how Australian and NZ Defence Forces can operate harmoniously in the spirit of ANZAC.

No matter where our people are deployed our sailors, soldiers, airmen and airwomen continue to receive praise for the skill and professionalism that they are able to contribute, adding to New Zealand’s reputation as a good global citizen.

Support to Communities

During the year the NZDF continued to support the Government and New Zealand with a wide variety of services ranging from ceremonial support and training assistance, to emergency support and search and rescue. The most noticeable event was the extensive flooding in the North Island where we provided a significant level of assistance through the provision of personnel, vehicles, helicopters and shelter. Further afield, the NZDF provided extensive assistance to relief operations in the South Pacific after Cyclone Heta.

Defence Capability and Resourcing Review

In past years, the NZDF’s annual funding (appropriations) were based on a fixed baseline with additional funding being provided to remedy fiscal pressures and for approved new initiatives. The main purpose of the Defence Capability and Resourcing Review (DCARR) conducted during 2004 was to identify the current and optimum capability configuration and resource requirements for the NZDF to undertake the roles and tasks prescribed by the Government, and to advise joint ministers on how the optimum capability of the NZDF can best be realised.

The DCARR identified significant funding gaps in the delivery of NZDF outputs. Consequently, the Government decided on a new funding plan for the NZDF, known as the Defence Sustainability Initiative (DSI), starting from FY 2005/06. In summary, this package will increase the NZDF’s nominal baseline each year for the next 10 years. This package will provide the NZDF with a high degree of assurance on funding into the future. The NZDF is required to fund output delivery, capability development, capital acquisition (other than that covered in the Long Term Development Plan) and, to a limited extent, operational deployments from this package. Additional funding would need to be considered and appropriated for any major event or operational deployment of a scale greater than the normal operational tempo and funding, such as the scale of the deployment to Timor Leste.

In outline, the DSI provides the financial resources to:

– restore personnel numbers in the three services, HQ NZDF and HQ JFNZ to the levels required, over a period of time;

– address the number and trained state in some trades deemed as critically deficient;

– align some major weapons platforms with the Government’s intentions, through the LTDP;

– raise the standard of some military equipment (other than major weapons platforms) that is currently beneath the required standard;

– return contingency reserve stocks to acceptable levels;

– significantly reduce the substantial backlog of maintenance and capital expenditure in the Defence Estate, over the longer term; and

– restore aspects of corporate management capability that are currently depleted.

The initial steps to responsibly manage the package allocation process and to ensure that the allocation remains sustainable over 10 years are being developed at the time of writing and will be reported to Joint Ministers. The DSI is required to be reported on annually, is subject to an annual review and a formal review after five years. In summary, the DSI is a long-term process that will see the NZDF rebuild gradually over time.

Defence Organisation

A further aim of the DSI is the development of more effective planning and performance management processes between the NZDF and Ministry of Defence. Work is also continuing on developing a common IT environment that provides shared office functionality and wider information access.

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Military Capability

Personnel

The recruitment and retention of personnel remains a key priority for the NZDF. The DCARR identified that as at 30 June 2004 there was a shortfall of personnel required to deliver the currently directed level of capability (DLOC). This shortfall, along with the need for additional personnel over the next ten years, was identified as a major barrier to the achievement of the Government’s defence policy objectives. Current shortages are particularly evident in all Services, with Army being the worse affected.

The reason for the shortage continues to be a very strong external labour market which has led to an external constraint on the NZDF’s ability to compete for, and attract suitable numbers of quality recruits. The labour market has also placed pressure on the ability to retain skilled and experienced staff. This has led to an internal constraint in the ability to train a sustainable workforce structure in the short-to-medium term.

Strategies to counter this shortage have included re-enlistment of ex-service personnel, lateral recruitment from other Armed Forces and targeted recruitment campaigns.

The recovery of personnel numbers will be a high priority over the next three years, although it is recognised that growing the NZDF personnel numbers to the desired strength with the required skills and experience is likely to take up to ten years. All three Services have personnel recovery plans that are in the process of being implemented as part of the DSI. Work continues on enhancing both remuneration and non-remuneration packages to support recruiting and retention efforts.

Equipment

The Long Term Development Plan (LTDP) continued to be a vital planning tool while providing certainty for the NZDF modernisation programme. It was reviewed and updated in November 2004 to ensure the Plan remains sustainable, while allowing priorities to be made between and within projects as new information comes to hand. Significant progress continues to be made on most projects as the following summary shows.

Cabinet approval for the Joint Command and Control System (JCCS) project to proceed with invitations to register interest from industry was given in May 2005. JCCS is forecast to achieve its baseline operational capability by December 2007. The NZDF Intelligence, Surveillance and Reconnaissance (ISR) study was completed in June 2004 and work continues slowly as resources allow.

The Maritime projects have progressed satisfactorily over the reporting period. The proposals for a Multi-Role Vessel (MRV), Offshore Patrol Vessels (OPV), and Inshore Patrol Vessels (IPV) were completed in early 2004 and the contract for the supply of one MRV, two OPVs and four IPVs was awarded in July 2004. Construction of the IPVs has commenced and detailed development work on the MRV is progressing. Comprehensive documentation relating to the Australian upgrade for their ANZAC Class frigates was received in December 2004. Due to possible linkages to the New Zealand ANZAC Ship Self Defence Upgrade Project (currently on the LTDP for 2011/12) further information on the Australian project is to be sought from industry partners in the ANZAC Ship Alliance; TENIX and SAAB (Australia) during 2005.

In the Land environment the LAV project is nearing conclusion, with the acceptance into service testing for the final vehicles being conducted. All but one LAV are now in country. One remains in Canada as a test-vehicle for the improved protection options that are being examined. The Army continues training towards the goal of having the first LAV-equipped battalion at DLOC in December 2005.

The Light Operational Vehicle project remains at the introduction into service phase with a number of LOVs now in country and beginning acceptance into service by Army. Teething problems with the vehicle are being worked through with manufacturer. The Medium Range Anti-Armour Weapon (MRAAW) project continues to be led by MoD as the acquisition phase is ongoing. Progress review meetings have been conducted and all goals appear to be in line for the mid 2006 introduction into service.

Both the Direct Fire Support Weapon (DFSW) project and the Very Low Level Air Defence System (VLLADS) project are in the acquisition phase under direction of MoD. The Special Operations Equipment, Army Engineering, Combat Service Support Vehicle Projects and the Land Intelligence, Surveillance and Reconnaissance (ISR) project are still ongoing.

The Air projects have also progressed well. A contract for the P-3 Orion Systems Upgrade was signed in October 2004 and a contract for the C-130 Life Extension projects was signed in December 2004. Both acquisition processes are proceeding on schedule. Responses from industry for the Boeing 757 modification package are being evaluated. In March 2005 it was announced that the NH90 helicopter had been selected to replace the Iroquois. Defence has subsequently opened discussions to determine detailed costs and availability. An Invitation to Register has been prepared for the training helicopter. The NZDF has held discussions with Australian Defence officials in relation to developing options and evaluating proposals for the P-3 Orion and C-130 Hercules self-protection upgrade. The Australian Defence Force (ADF) has a similar requirement and has undertaken extensive analysis of options, so the NZDF intends to leverage off their analysis.

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Cabinet considered a progress report in December 2004 on the business case for consolidation of RNZAF operational capability at Ohakea Air Force base. In April 2005 the Cabinet noted the findings of the Ohakea consolidation business case and approved funding for the purchase of land and to commence planning and design, evaluation of procurement methodologies and preparation of detailed cost estimates. A further report on final cost estimates is expected to be made to Cabinet next year.

The review of the Capability Management Framework (CMF), as required on its introduction, is under way and alignment of all current projects on the LTDP to the CMF has been completed. Templates for documentation and reporting are being refined throughout the process, drawing on the experiences of project teams that have progressed through the relevant stages. However, the original review requirements have been superseded by the DSI project, requiring a more substantive review than the update agreed by the Executive Capability Board.

Managing NZDF Corporate Risks

With annual expenditure of about $1.5 billion, a net asset base of nearly $4 billion, total personnel and employees of nearly 13,000 and around 2,000 personnel preparing for, on, or regenerating from operations, the NZDF is managing a large number of risks, while ensuring normal outputs are maintained. Key risks currently include: alignment of personnel requirements to meet long-term plans; delivery of agreed outputs; awareness of the NZDF’s roles and capabilities; corporate management and strategic planning processes; interoperability with coalition forces; and maintenance of the Defence Estate.

This has resulted in the NZDF adopting a structured and consistent approach to the management of risks and opportunities. Mitigation strategies include a framework comprising risk management methodologies, education, guidance material, assessment tools, reporting and monitoring processes. This framework ensures that the identification, analysis, assessment and management of risks throughout the NZDF are performed in a consistent and systematic manner.

Conclusion

This year has proven to be yet another rewarding and challenging one for the men and women of the NZDF. Our contributions in combating international terrorism, upholding the principles of the United Nations, and providing civil and humanitarian assistance both within New Zealand and overseas has demonstrated once again the ability of the NZDF to be readily available to provide assistance when required. No matter where they serve, the personnel of the NZDF continue to receive praise for the skill and professionalism that they are able to contribute and thereby enhancing New Zealand’s reputation as a responsible global citizen and caring regional neighbour.

We continue to face significant challenges with recruitment and retention. The recovery of our personnel numbers is a high priority and we will continue our efforts to enhance conditions of service. Our aim is to develop a tailored, networked joint force that is capable of completing a diverse range of missions.

We are on track to achieve the Government’s modernisation plans. The motorisation of the Army with the introduction of the LAVs and LOVs, the transformation of the Navy with the construction of the multi-role vessel and patrol vessels, and the upgrade of the Air Force’s C-130 and P-3K aircraft and new helicopters are all progressing well. We are also focussing on future strategic developments to assist in identifying and determining the needs and options of the NZDF well beyond our current capability plans.

As we look back on another challenging and demanding year, I would like to express my sincere gratitude to the men and women of the NZDF who have once again served New Zealand with unstinting dedication, loyalty and professionalism. Their contribution is highly valued wherever they serve and on behalf of the public of New Zealand I give them our heartfelt thanks. I would also like to thank all those who have supported and encouraged our young service men and women.

B.R. Ferguson Air Marshal Chief of Defence Force

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SECTION 2Defence At A GlanceIntroduction

This section of the Report provides a general overview of the New Zealand Defence Force, while more detailed information is available from the websites, publications and libraries listed later in this section. The following topics are covered in this Section:

NZDF Mission

Linkages to Government PolicyNew Zealand’s Defence Policy Employment Contexts

Overview of ServicesRoyal New Zealand Navy New Zealand Army Royal New Zealand Air Force Headquarters Joint Forces New Zealand

Organisation Charts

Overseas Operations

Forces and Locations

Personnel Summary

Expenditure Summary

Corporate InformationStatutory Committees Availability of Information Legislation administered by NZDF

NZDF Mission

The primary mission of the NZDF is:

to secure New Zealand against external threat, to protect our sovereign interest, including in the Exclusive Economic Zone, and to be able to take action to meet likely contingencies in our strategic area of interest.

In achieving this mission, the NZDF works closely with the Ministry of Defence (MoD). The MoD is responsible for providing defence policy advice, procurement of major items of equipment, and audit and assessment of the NZDF.

Linkages to Government Policy

The Defence Act 1990 provides for armed forces to be raised and maintained for:

— the defence of New Zealand and the protection of its interests, whether in New Zealand or elsewhere;

— the contribution of forces under collective security treaties, agreements or arrangements; and

— the contribution of forces to the United Nations or other organisations or states for operations in accordance with the principles of the United Nations Charter.

The Act also allows the Armed Forces to be made available for the performance of public services and assistance to the civil power in time of emergency, either in New Zealand or elsewhere.

New Zealand’s Defence Policy

The Government’s Defence Policy Framework, issued in June 2000, outlined the Government’s goals and priorities for defence and provided a framework for decisions regarding military capabilities, resources and funding. It has been supplemented by the Government Defence Statement of May 2001 in regard to A Modern, Sustainable Defence Force Matched to New Zealand’s Needs, as reflected in the projects listed in the Long Term Development Plan (first issued in June 2002 and updated annually).

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Defence is one component of New Zealand’s foreign and security policy. While the NZDF is constitutionally the sole provider of military forces, it is not the sole contributor to strategic outcomes for national security. A range of other Government Departments and Agencies, including for example the Ministry of Defence, the Ministry of Foreign Affairs and Trade, the Customs and Immigration Services, the Government Communications Security Bureau and the Ministry of Fisheries, all contribute to promoting and protecting New Zealand’s national security.

In the Government’s Defence Policy Framework five broad strategic outcomes for national security are endorsed. From these, a defence policy objective is set for each outcome. In achieving these objectives, the NZDF makes a range of contributions: it maintains operationally prepared forces for use by the Government and it carries out operational missions in accordance with Government direction. These outcomes, objectives and examples of NZDF contributions are shown below.

Government’s Strategic Outcomes, and related Defence Policy Objectives Examples of Contributions by NZDF

Strategic Outcome:

A secure New Zealand including its people, land, territorial waters, EEZ, natural resources and critical infrastructure.

Defence Policy Objective:

To defend New Zealand and to protect its people, land, territorial waters, Exclusive Economic Zone (EEZ), natural resources and critical infrastructure.

EEZ resource protection

Sovereignty protection

Explosive disposal response

Counter Terrorist response

Civil Defence Assistance

Aid to civil power

Support to Government Agencies and the Community

Strategic Outcome:

A strong strategic relationship with Australia in support of common interests for a secure and peaceful region.


To meet our alliance commitments to Australia by maintaining a close defence partnership in pursuit of common security interests.

Regional security assistance in partnership

Exercises

Closer Defence Relations

Visits

Strategic Outcome:

A political environment in the South Pacific in which national economies, societies and identities continue to evolve in a climate of good governance and internationally agreed standards of compliance with human rights.


To assist in the maintenance of security in the South Pacific and to provide assistance to our Pacific neighbours.

Assisting in Pacific Island nations

EEZ resource and sovereignty protection

Security assistance

Peace Support Operations

Protection of New Zealand nationals

Disaster relief

Strategic Outcome:

An expanding role in the regional dialogue of South East and North East Asia and, where appropriate, a role in regional security consistent with New Zealand’s interests and capabilities.


To play an appropriate role in the maintenance of security in the Asia–Pacific region, including meeting our obligations as a member of the Five Power Defence Arrangements (FPDA).


Humanitarian Support

Regional Security Arrangements

Exercises

Defence Diplomacy

Strategic Outcome:

A global approach which supports New Zealand’s place in an international community committed to the maintenance of human rights and the collective security responsibilities enshrined in the United Nations (UN) Charter, and which strengthens New Zealand’s international economic linkages.


To contribute to global security and peacekeeping through participation in the full range of UN and other appropriate multilateral peace support and humanitarian relief operations.

Combat Operations


Humanitarian support



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Employment Contexts

To carry out its mission to secure New Zealand against external threat, protect sovereign interests, and take actions to meet likely contingencies in New Zealand’s strategic area of interest, the NZDF trains and prepares military units to be available to Government to respond to security challenges. It is not possible to be ready for every contingency, nor to predict exactly what security challenges will eventuate. Therefore, a representative and illustrative range of circumstances – Employment Contexts – have been identified that are consistent with Government’s defence policy priorities, and for which there is a high likelihood that a New Zealand Government would expect to provide a military response.

Within each Employment Context (EC), a number of plausible events have been identified, some of which have been further developed for use in NZDF outputs planning. Each has a description of a particular security event, and an operational concept for NZDF response. They are used in the Output Plan agreed between the Minister of Defence and the Chief of Defence Force to ensure that the NZDF is funded, equipped and assessed on its ability to deliver effective military capabilities available to meet Government’s defence policy objectives.

EC 1 Security Challenges to New Zealand and its Environs:EC 1A: Civil Disturbances/Industrial Actions affecting essential services.

EC 1B: Disasters posing a serious threat to life, property or the environment.

EC 1C: Incursions into and through New Zealand’s Economic Zone and other areas within New Zealand’s jurisdiction that threaten New Zealand’s interests.

EC 1D: Terrorism and Acts of Sabotage.

EC 1E: Asymmetric attacks on New Zealand territory (such as information warfare attacks and mining of New Zealand ports).

EC 2 Security Challenges to New Zealand’s Interests in the South Pacific:EC 2A: Disasters posing significant risks to life, property or the environment.

EC 2B: Illegal incursions into South Pacific Island EEZs and territories.

EC 2C: Civil Disturbances leading to breakdown in law and order, and/or posing risks to New Zealand nationals.

EC 2D: Terrorist Acts.

EC 2E: Challenges to legitimate governments, including civil war and secessionist conflict.

EC 3 Security Challenges to the Australia–New Zealand Strategic Area:EC 3A: Short warning attacks against maritime approaches and terminuses and land incursions on

Australian territory.

EC 3B: Serious attacks on the physical security of the New Zealand–Australia Strategic area from a broader regional conflict.

EC 3C: Asymmetric attacks.

EC 3D: Major conventional conflict (such as an invasion of Australia).

EC 4 Security Challenges to New Zealand’s Interests in the Asia–Pacific Region:EC 4A: Disasters posing significant risks to life or the environment.

EC 4B: Acts of piracy.

EC 4C: Impeded rights of passage through contested sea–lanes.

EC 4D: Significant internal unrest or insurgency that spills to other states and/or poses risks to New Zealand nationals.

EC 4E: Aggression to affect maritime boundaries or seize/expropriate resources.

EC 4F: Inter–state conflict.

EC 5 Security Challenges to New Zealand’s Interests in Global Peace and Security:EC 5A: Unresolved conflict where protagonists have sought third party resolution assistance.

EC 5B: Act(s) by states or non–states actors that contravene international norms of behaviour or threaten international security or stability.

EC 5C: Impeding supplies of essential resources (such as oil, water, electricity) to force political concessions or threaten the security of a nation or group of nations.

EC 5D: Significant internal conflict with risks to the stability of surrounding states or involving large–scale suffering.

EC 5E: Aggression to affect maritime or land boundaries or seize/expropriate resources.

EC 5F: Major breakdown in international security leading to wide–scale war.

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Royal New Zealand Navy www.navy.mil.nzTe Taua Moana o Aotearoa

The core purpose of the Navy is, together with the Army and Air Force, to contribute to the prosperity of all New Zealanders.

The mission of the Navy is as its contribution to the Joint Effect, “the delivery of versatile, responsive and effective maritime military capability across the spectrum of operations.”

The Navy’s Vision is “To be the best small–nation Navy in the world”

Organisation and Location

The home of the Navy(te kainga o te taua moana o Aotearoa) is the main naval base HMNZS PHILOMEL at Devonport, in Auckland. This is where most of the ships and support elements are based and most naval personnel reside. Approximately 2100 personnel work in Devonport, on the ships or in the support organisations that provide logistics, training, and health services to them. The Naval Dockyard inside the base is managed under contract by Vosper Thornycroft Fitzroy Ltd.

Navy contributes approximately 50 personnel to the Headquarters Joint Forces New Zealand at Trentham. Royal New Zealand Naval Volunteer Reserve units are established in Auckland, Wellington, Christchurch and Dunedin; with a smaller unit in Tauranga.

The Chief of Navy and the Naval Staff are located in Headquarters New Zealand Defence Forces in Wellington.

Major Challenge for 2006

The significant challenge facing the Navy next year is to get ready to introduce into operational service between December 2006 and December 2007 the seven new ships being acquired under Project PROTECTOR while at the same time continuing to deliver the outputs of the current fleet. Navy’s primary focus is the responsive and professional operation of its ships, to achieve the range of outputs required by Government (including Multi–Agency Operations and Tasks [MAO&T], support to other Government agencies and the civilian community) and this will continue to be the focus while conducting the RF training and preparing the Navy for the arrival of the Protector Fleet.

Major Activities

The last year saw the continued high operational tempo experienced by the Navy in recent years. The focus of the larger ships was to deploy overseas in support of our important defence relationships with Australia, the United Kingdom, Singapore and Malaysia – and in complementing areas of important diplomatic and economic interest in Asia. The smaller vessels were focused on supporting our engagement with the countries of the South Pacific and in carrying out a wide range of multi-agency operations in New Zealand waters in support of government agencies such as Customs, MFish and DOC.

The ANZAC Class Frigate HMNZS TE MANA, with an embarked SeaSprite helicopter, continued with the third Navy deployment to Operation Enduring Freedom (the UN–sanctioned international operation against Terrorism) to join the Multi–National Interception Operation (MIO) in the Arabian Gulf until September 2004. This operation demonstrated the capability of the ANZAC frigate to fulfill the Government’s defence policy objective of contributing to global security in an environmentally hostile area with water and air temperatures exceeding the design specifications of some equipment. Despite these extremes on equipment and people HMNZS TE MANA spent 80 percent of the time in the Gulf on patrol. In the middle of 2005 the ship conducted important Defence Diplomacy visits to Malaysia, Singapore, Japan, Russia and China.

HMNZS TE KAHA, with an embarked SeaSprite helicopter, also carried out important Defence Diplomacy activities in the Asia-Pacific region; including participation in the Five Power Defence Aarrangements(FPDA) exercise BERSAMA LIMA (BL04). The ship also supported a visit by the Prime Minister to the Tokelau Islands.

The last of the LEANDER Class Frigates, HMNZS CANTERBURY, ended her RNZN service in March 2005.

The tanker HMNZS ENDEAVOUR provided important support to national and international exercises in New Zealand and overseas.

The Mine Countermeasures Support ship HMNZS MANAWANUI continued to show her versatility by participating in diving operations, training and multi-agency operations. A significant achievement was the location of the sunken ship MV IRON MAIDEN off the Northland coast for the Transport Accident Investigation Commission.

www.navy.mil.nz



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The RNZN Operational Diving Team (ODT), Diving School and Hyperbaric Medical Unit also made important contributions. The ODT took part in exercises with Australian, FPDA Navies and divers from the Western Pacific. The Hyperbaric Unit in Auckland continued to provide diving medical services to the civil community in NZ.

The Navy’s Inshore Patrol Craft made an often under-stated but always important contribution to multi-agency operations.

HMNZS RESOLUTION continued its military hydrographic role and conducted the largely unseen, but nonetheless critically important, contracted tasks for coastal and off–shore hydrographic survey of shipping routes for LINZ.

While the ships often provide the most visible sign of the Navy contribution, there are several less obvious, but vital, parts of the Navy that play an equally important part. These include the long range strategic communications provided by the Navy’s Communication Station, the management and training of the personnel to man the ships, the logistic and engineering elements that support the ships, and the provision of Navy personnel to joint NZDF contributions to UN Peace Support Operations; for example, in the NZDF PRT in Afghanistan.

Future Direction

The Navy today is a capable maritime force. However, the Navy post the delivery of the new ships will not only be capable but will also be able to be characterized as versatile across the spectrum of operations – and committed to operating in a joint context. The newly shaped versatile Navy will be able to better support the NZ Army, to more effectively protect New Zealand’s sovereign interests in partnership with other government agencies – and promote and protect our national interests by carrying out wide ranging deployments into the South Pacific, Asia and, if required, further afield.

However, the versatile Navy is not just about ships. While they are an important component, the versatile Navy will be characterized by the effective and efficient delivery of training and support and, most importantly, by motivated and skilled personnel.

THE NAVY Contributes to the Prosperity and Security of all New Zealanders

AT A GLANCE

Over 99% of New Zealand Imports and Exports by volume are transported by sea

The RNZN has spent over 100 sea days supporting the NZ Customs Service around the NZ coast and has contributed to the global deterrence of illegal trade.

New Zealand earns 1.5 billion Dollars annually through fishing The RNZN has conducted over 500 sea days patrolling the NZ EEZ

New Zealand’s interests are globalRNZN ships were involved with Defence Diplomacy visits to 10 Countries

and the Navy has people serving in 10 Operational Missions overseas

A secure Asia is critical to NZ’s economic well-beingThe RNZN contributed to a secure and stable Asia by exercising with

the Navies of China, Japan, Singapore, Malaysia and Thailand

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New Zealand Army www.army.mil.nz

The New Zealand Army is a versatile, responsive and flexible land force that is able to provide a wide range of options at short notice to Government, ranging from collective combat or peace support operations with Allies, low-level emergencies in New Zealand’s area of interest, to supporting the Police and Emergency Services in New Zealand. These options may include the deployment of individuals, small groups of specialists, Special Forces and units up to a combined-arms Battalion Group anywhere in the world. The New Zealand Army Mission is:

“To provide world-class operationally focused land forces that are led, trained and equipped to win”

Organisation

In order to meet the spectrum of military operations that might be required, the Army is organised around a structure of two Regular Force (RF) infantry battalions with other Combat, Combat Support, Combat Services Support and Special Forces components that train within a composite RF and Territorial Force (TF) brigade structure.

The Army organisation includes the Army General Staff and Base Logistics support elements in Wellington, the 2nd Land Force Group (Linton), the 3rd Land Force Group (Burnham), the Army Training Group (Waiouru) and the 1st New Zealand Special Air Service Group (Papakura).

Army General Staff in Wellington consists of the personnel, logistics, planning and training policy, planning and development staff. These assist the Chief of Army (CA) to raise, train and maintain Army force elements for deployment. CA commands the Army through the Land Component Commander (LCC) and the Commander of the Army Training Group (Comd ATG). The LCC, based in the Headquarters Joint Forces New Zealand at Trentham, is responsible for the day-to-day command and management of all Army elements except ATG. Also located in Trentham are the main base logistics support facilities, the Force Military Police Company and Force Intelligence Group.

Headquarters 2nd Land Force Group (HQ 2LFG) in Linton commands most of the units that provide the deployable RF force elements, including an infantry battalion (1 RNZIR), an armoured personnel carrier squadron (QA Sqn in Waiouru until 1 Nov 04), signals (2 Signal Squadron), artillery (16 Field Regiment), engineers (2 Engineer Regiment), logistics (2 Logistics Battalion), and medical support (2 Health Services Battalion). In addition, HQ 2LFG commands the North Island TF Battalion Groups headquartered in Auckland, Tauranga, Napier and Wanganui.

Headquarters 3rd Land Force Group in Burnham commands all RF and TF units in the South Island. These include an RF infantry battalion (2/1 RNZIR), logistics (3 Logistics Battalion), signals (3 Signal Squadron), and other minor support and training units as well as the two South Island TF Battalion Groups headquartered in Christchurch and Dunedin.

Army Training Group (ATG), based in Waiouru, is responsible for all formal individual training of the Army. The ATG Training area on the North Island central plateau is the largest training area available for individual and collective training and live field firing. HQ ATG commands The Army Depot (Recruit and Non-Commissioned Officer training), the Officer Cadet School and the Land Operations Training Centre, which conducts specialised individual training for each branch of the Army.

1st New Zealand Special Air Service Group (1 NZSAS Gp) is located in Auckland. This unit provides the Special Forces required to support conventional operations overseas and the Counter-Terrorist Group (CTG).

Major Activities

Army maintained a high operational tempo during 2004/2005. Some of the main activities which occurred included:

– Continued support to major operational commitments in Iraq (concluded September 04), Afghanistan, Sinai Peninsula, and Solomon Islands. Army also supported smaller commitments that were maintained in support of UN and other coalition operations around the world.

– Exercise Predators Gallop was a combined exercise with Australia conducted over the period Aug – Sept 04. This exercise provided Army with the opportunity to assess the directed level of capability (DLOC) of a Light Armoured Vehicle (LAV) Company, from 1RNZIR.

– Unit and sub-unit training activities which focused on the regeneration of conventional combat operation war-fighting skills.

– Tsunami relief support within the South-East Asia region.

www.army.mil.nz



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Future Direction

The immediate future of the Army remains focused on the provision of effective land force elements for contribution to operations. Whilst supporting these operations, Army will continue the modernisation and generation of effective operational units. In the long term this will produce an Army that is agile, technologically adept and combat-capable in a joint and combined setting.

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Royal New Zealand Air Force www.airforce.mil.nz

The Royal New Zealand Air Force provides the people of New Zealand with an effective, responsive, dependable, and affordable Air Force that advances the security interests of New Zealand. The Air Force Mission is:

“To carry out military air operations to advance New Zealand’s security interests, with professionalism, integrity and teamwork”

The ultimate goal for the RNZAF of the future is expressed in its Vision:

“We will be an Air Force that is the best in all that we do”

RNZAF military air operations include maritime surveillance and reconnaissance with six P-3K Orion aircraft, strategic and tactical air transport with two Boeing 757 and five C-130 Hercules aircraft, and helicopter support with fourteen UH-1H Iroquois helicopters. The RNZAF also supports five SH-2G(NZ) Seasprite helicopters that are part of the Naval Combat Force. These aircraft support both military operations and civil authorities. At the tactical level, force elements are designed to be self-sufficient in operating level maintenance, maintenance management and retail supply.

Organisation

The Chief of Air Force retains overall command of the RNZAF and is responsible for raising, training, and maintaining the operational and support capabilities. The Air Force command structure is based on functional groupings rather than geographic locations, with elements of the operational, training, and support organisations located at RNZAF Bases Auckland, Ohakea, and Woodbourne. The Directorates of Logistics, Personnel, and Support Services, and the Plans, Development, and Resources staffs are all centred in Wellington. The Directorate of Training is located at RNZAF Base Woodbourne.

The operational squadrons are assigned under permanent operational command to the Commander Joint Forces New Zealand, who exercises that command through the Air Component Commander and No. 485 Wing. Headquarters No. 485 Wing, No. 5 Squadron (P-3K Orions), No. 40 Squadron (C-130 Hercules and Boeing B757), the Naval Support Flight of No. 3 Squadron (SH-2G Seasprite helicopters), and the Operational Support Squadron are located in Auckland. No. 3 Squadron (Bell UH-1H Iroquois and Bell 47G Sioux helicopters) is located at RNZAF Ohakea.

The Air Force’s training organisation is located at RNZAF Base Woodbourne and RNZAF Ohakea. Ground Training Wing, and the units responsible for officer, recruit, and specialist ground trade training are all located at RNZAF Woodbourne. Flying Training Wing, No. 42 Squadron (King Air B200), Pilot Training Squadron (CT-4E Airtrainer) and Central Flying School (CT-4E Airtrainer) are located at RNZAF Ohakea.

The Air Force’s support organisation is arranged on the three main operating bases at Auckland, Ohakea and Woodbourne. Each location has an Air Base Wing that coordinates activities and provides support services to units at the Base. Logistics Wing and the Directorate of Aeronautical Procurement are centred at RNZAF Auckland, along with units from the Directorate of Aeronautical Configuration. The Directorate of Aeronautical Configuration is centred at RNZAF Ohakea, along with units of Logistics Wing and Aeronautical Procurement.

Outputs and Outcomes

The three RNZAF Force Element squadrons, the Operational Support Squadron, and units from throughout the RNZAF utilised their capabilities to meet the Government specified outputs and therefore contributed to the Defence Intermediate Outcomes in the following manner.

Intermediate Outcome 1: Secure New Zealand. All three RNZAF Force Elements maintained a capability to assist with counter terrorist response by providing transport support and surveillance capabilities. No. 5 Squadron conducted surveillance flights of New Zealand’s Exclusive Economic Zone (EEZ) and the Southern Ocean that contributed to protection from illegal activities. All three RNZAF Force Elements also maintained a capability to contribute to protection from civil instability and disasters, by providing transport support and search and rescue response for civil authorities. Personnel from across the RNZAF were also available to assist civil authorities if requested.

Intermediate Outcome 2: Reduced Risks From Regional and Global Insecurity. Nos. 3 and 40 Squadrons were prepared to contribute to maintaining a secure and stable South Pacific by providing transport support to land forces (including aero-medical evacuation) for disaster relief, and to extract civilians in emergencies. Notably No. 3 Squadron provided transport support and an aero-medical evacuation capability to the multi-national mission to the Solomon Islands. This mission was supplied by inter-theatre flights from No. 40 Squadron. No. 5 Squadron conducted surveillance patrols of the EEZs of Pacific Island nations, provided a surveillance capability for disaster relief, and conducted numerous search and rescue missions in the South Pacific. RNZAF Force Elements participated in or supported units deploying to exercises with or in

www.airforce.mil.nz



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Australia thereby contributing to a secure and stable Australia. No. 5 Squadron, with transport support from No. 40 Squadron participated in exercises with South East Asian countries and Australia thereby enabling collaborative responses to ensure a secure and stable Asia-Pacific region. The short notice assistance provided by No. 40 Squadron to the tsunami relief operations in Thailand and Indonesia also contributed to this outcome. The ability to provide effective collaborative responses globally was enabled by elements of Nos. 5 and 40 Squadrons participating in advanced tactical training in the United Kingdom and the United States respectively. No. 40 Squadron supported New Zealand and other forces globally, but most notably in the Middle East (where a C-130 aircraft also deployed for two months) thereby contributing to a more secure and stable world. Personnel from throughout the RNZAF also contributed to this outcome by deploying as individuals or small teams to various multinational and United Nations Missions.

Future Direction

The ultimate goal for the RNZAF of the future is expressed in its Vision:

We will be an Air Force that is the best in all that we do.

Under the Defence Sustainability Initiative, the RNZAF aims to regenerate personnel strength to 2916, an increase of 374 on the average paid strength for 2004/2005 of 2542. The first stage of this Personnel Recovery Management Plan is to increase numbers by 160 in 2005/2006, by enhanced recruiting within New Zealand, the targeted re-enlistment of ex-RNZAF personnel and, with downsizing of the RAF, the lateral recruitment of 80-90 personnel from the UK.

The Defence Long-Term Development Plan includes major projects to upgrade most of the Air Force’s capabilities and infrastructure over the next few years:

– Air transport is a critical enabler for a range of military and Government tasks. Each of the new Boeing 757 aircraft will be modified with a cargo door, strengthened floors, and air stairs. The C-130 Hercules will undergo a life extension with upgrades to the avionics and aircraft systems, and some structural refurbishment, to guarantee airworthiness and improve availability and reliability through to at least 2017.

– New sensors, mission management, communication and navigation systems will be fitted to the P-3K Orion fleet to improve its capability and reliability for a wide range of military and civilian tasks.

– The Iroquois will be replaced by the NH90 to fulfil the medium utility helicopter requirement. The Sioux helicopter will be replaced with new aircraft to meet training and light utility requirements.

The project to consolidate the RNZAF’s operational capability at Ohakea (Project TAKITINI) has been validated and a preferred option for the development of the base has been reviewed by Cabinet. Cabinet have confirmed an initial funding allocation for the further investigation of an appropriate procurement strategy, the progression of preliminary design, and the compilation of more accurate costings for the preferred option. A report confirming costs and affordability, within the LTDP, is due to be submitted to Cabinet next year.

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Headquarters Joint Forces New Zealand

The HQ JFNZ vision is:

“To be valued by our men and women at sea, on land and in the air as a world-class operational-level headquarters, and the place where the current and future leaders of the New Zealand Defence Force aspire to serve”

The HQ JFNZ mission is:

“To provide command, leadership and support to our men and women on joint and combined operations and activities, in order to contribute to the security of New Zealand and her interests”

Overview

The primary function of HQ JFNZ is to plan, conduct and sustain operations, exercises and activities by assigned Force Elements. The Headquarters enables and promotes closer cooperation across the three Services and specific government departments and agencies (multi agency operations and tasks) in planning and executing operations. By working together in a joint environment the Navy, Army and Air Force contribute to a Defence Force that is more responsive to international and national contingencies. . HQ JFNZ also has the function of supporting the Environmental Component Commanders in their achievement of DLOC on behalf of Service Chiefs. It has become increasingly clear that Force Elements must deploy as self sufficient as possible, as support from other nations in the form of Memorandums of Understanding cannot and should not always be relied upon.

Outputs and Outcomes

Throughout the year HQ JFNZ planned and commanded a number of major operations and provided support to a wide range of Government and community organisations. Major achievements included:

The repatriation of HMNZS TE MANA to NZ from the Arabian Gulf in support of Operation ENDURING FREEDOM (TG TIKI II).

The employment of a C130 aircraft and 28 NZDF personnel in support of Operation ENDURING FREEDOM and Task Group RAKE (TG TEAL).

The deployment and sustainment of NZDF personnel in support of Operations in Afghanistan (Operation ARIKI), the Solomon Islands (Operation RATA) and Iraq (Task Group RAKE).

Provision of NZDF personnel to assist with disaster relief as a result of the Tsunami in South East Asia (Op Sumatra Assist and Phuket Assistance).

Future Direction

The planning, conduct and sustainment of operations continues to be the main effort for HQ JFNZ. Within this task, sustainment of PRT operations in Afghanistan will require more planning and focus. All missions during the period were successfully achieved, significantly enhancing New Zealand’s standing with coalition partners. The impact of NZDF involvement in the international disaster relief effort in Sumatra and Phuket has resulted in the delay of the NZDF’s major DLOC training exercise (Joint Kiwi 05) during the period. The achievement of DLOC occurred by the substitution and completion of other activities. Options are currently being developed to reprogram Joint Kiwi.

Forces and Locations

During the reporting period, NZDF personnel participated in those United Nations and Multinational peace support operations shown below. Further details regarding these missions are shown under Output Class 16, Operationally Deployed Forces.



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Global Region Contribution Description

Afghanistan The Provincial Reconstruction Team (including National Support Element) now consists of 122 NZDF personnel. Additionally, two NZDF personnel have assisted in the training of the Afghan National Army as part of a British Army Training Team. One staff officer is serving with the United Nations Assistance Mission in Afghanistan (UNAMA). Three personnel support the International Security Assistance Force (ISAF) in Kabul, and two others provide support to the US lead coalition headquarters.

Antarctica 69 NZDF personnel provided terminal and logistics support at Christchurch, McMurdo Station and Scott Base during the period Oct 04 – Feb 05 in support of Antarctic New Zealand. A number of RNZAF C130 flights were conducted in support of the US and NZ Antarctic programmes.

Arabian Gulf HMNZS TE MANA returned from the Arabian Gulf in support of Operation ENDURING FREEDOM. A C130 aircraft and 28 personnel also deployed in Aug/Sep 04 to support OEF operations and extraction of personnel from Iraq. Six NZDF personnel remain in the Arabian Gulf to provide logistical support to NZDF operations in the region.

Bosnia Three staff officers work in the Headquarters of the Liaison and Observation Teams as part of the European Union Force, (EUFOR). An eight-person contingent has also been attached to British units of EUFOR.

Cambodia Two staff officers served in the Cambodian Mine Action Centre (CMAC) HQ in Phnom Penh until April 05.

East Timor Six NZDF personnel have remained in support of the United Nations Mission in Support of East Timor (UNMISET) and the Office of Defence Force Development (ODFD).

Iraq 61 NZDF personnel worked alongside the British led Multi-National Division South East (MND-SE) conducting humanitarian aid tasks and reconstruction projects in Basra until Sep 04. One staff officer remains as an advisor to the United Nations Assistance Mission in Iraq (UNAMI)

Israel / Lebanon / Syria

Eight NZDF personnel served at a variety of locations in Israel, Lebanon and Syria with the United Nations Truce and Supervisory Organisation (UNTSO). One of these personnel is seconded as the Head of Mission

Kosovo One staff officer was attached as a Military Liaison Officer with the United Nations Interim Administration Mission in Kosovo (UNMIK) Headquarters in Pristina.

Mozambique Two NZDF personnel initially supported the Accelerated De-mining Program in Mozambique although this is now reduced to one.

Sierra Leone Two NZDF officers were initially deployed with the United Nations Assistance Mission in Sierra Leone (UNAMSIL) but this is now reduced to one.

Sinai Peninsula

A twenty six-person contingent provided expertise in operations and training to the Multinational Force and Observers (MFO) in El Gorah, Egypt.

Solomon Islands

The early commitment of 88 NZDF personnel has been progressively downscaled. The Infantry platoon of thirty-three personnel and a National support element of three returned to NZ in Feb 05 and only staff officer remains.

South Korea One NZDF officer serves with the United Nations Command Military Armistice Commission in Korea (UNCMAC)

United States of America

Three NZDF personnel provided a NZ National Planning Element (NPE) in Florida. The NZ NPE supports NZDF involvement in both OEF and OIF.

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Headquarters New Zealand Defence ForceWellingtonHQ NZDF (Strategic HQ)

Chief of Defence Force

Vice Chief of Defence Force

Chief of Navy

Chief of Army

Chief of Air ForceTrenthamNZDF Command and Staff CollegeOverseas UnitsNZ Defence Support Unit / South—East Asia (Singapore)

Joint Forces New ZealandTrenthamCommander Joint Forces New Zealand

Headquarters Joint Forces New Zealand

Royal New Zealand NavyAucklandNaval Support Command

RNZN Naval College

Joint Geospatial Support Facility

HMNZS DockyardNaval Combat ForceHMNZS CANTERBURY

HMNZS TE KAHA

HMNZS TE MANALogisticsHMNZS ENDEAVOUR (Fleet Replenishment)HydrographicHMNZS RESOLUTIONDiving SupportHMNZS MANAWANUISea TrainingHMNZS KAHUInshore Patrol CraftHMNZSs MOA, KIWI, WAKAKURA, HINAU

New Zealand ArmyPapakura1 NZ SAS GroupWaiouruArmy Training Group

Officer Cadet School

Land Operations Training Centre

The Army Depot

Queen Alexandra’s Squadron (Armoured Personnel Carriers)LintonHQ 2 Land Force Group

1st Battalion RNZIR (Infantry)

16 Field Regiment (Artillery and Air Defence)

2 Engineer Regiment

2 Signals Squadron

2 Logistics Battalion

2 Health Services Battalion

Operational Welfare UnitTrenthamTrentham Regional Support Centre

Force Intelligence Group

Force Military Police CompanyBurnhamHQ 3 Land Force Group

2nd/1st Battalion RNZIR (Infantry)

3 Logistics Battalion

Tekapo

Military Training Area

Royal New Zealand Air ForceAucklandNo 5 Squadron

6x P–3K Orion

No 40 Squadron

2x Boeing 757

5x C–130 Hercules

No 3 Squadron, Naval Support Flight

5x SH–2G(NZ) Seasprite

Operational Support SquadronOhakeaNo 3 Squadron

14x UH–1H Iroquois

Flying Training Wing

14x Airtrainer

5x Beech King AirWoodbourneGround Training Wing

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New Zealand Defence Force – 30 June 2005

1 The titles Chief of Navy (CN), Chief of Army (CA), and Chief of Air Force (CAF) were adopted in March 2003 to more accurately reflect the focus and role of those appointments. For legal purposes these titles refer to the Chief of Naval Staff, the Chief of General Staff, and the Chief of Air Staff as appointed under Section 28 of the Defence Act 1990.



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Royal New Zealand Navy – 30 June 2005

1 CN retains full command of the RNZN and is responsible for managing the Navy’s capability to deliver operational outputs.

2 COMJFNZ is responsible for the operational command of all assigned force elements on operations and for mutually agreed joint and combined training.

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New Zealand Army – 30 June 2005

1 CA retains full command of the NZ Army and is responsible for managing the Army’s capability to deliver operational outputs.




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Royal New Zealand Air Force – 30 June 2005

1 CAF retains full command of the RNZAF and is responsible for managing the RNZAF’s capability to deliver operational outputs.


3 The Seasprite helicopters are part of the Naval Combat Forces. The RNZAF trains the pilots, observers and crewmen and maintains the aircraft.

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Headquarters Joint Forces New Zealand – 30 June 2005

1 COMJFNZ is responsible for the operational command of all assigned force elements on operations and joint and combined training.



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Personnel Summary

Personnel Composition – as at 1 July 2005

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NZDF Personnel Total Numbers By Year

Defence Expenditure for the year ended 30 June 2005

Defence Expenditure for the year ended 30 Jun 2005 was $1.522 billion, exclusive of GST. Of this total, $282 million (18.5%) was returned directly to the Crown as capital charge for the use of Defence assets.

A summary of expenditure is shown below and the financial statements are shown at Part 6 of this report.



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Statutory Committees

The two statutory NZDF Committees, with the number of meetings during 2004/05, are:

— Chiefs of Service Committee 13 meetings

— Board of Review 5 meetings

Availability of Information

Further information regarding the Defence Force is available to the public from the following sources:

New Zealand Defence Force: www.nzdf.mil.nz

Defence Public Relations:

Defence House 15–21 Stout Street, Wellington

[email protected]

Defence Library:

Defence House 15–21 Stout Street, Wellington

[email protected]

Navy: www.navy.mil.nz

Navy Today

(monthly publication)

Royal New Zealand Navy Museum

Devonport Naval Base, Auckland

www.navymuseum.mil.nz

Army: www.army.mil.nz

Army News

(fortnightly publication)

Queen Elizabeth II Army Memorial Museum

Waiouru

www.armymuseum.co.nz

Air Force: www.airforce.mil.nz

RNZAF News

(monthly publication)

RNZAF Memorial Museum

Sockburn, Christchurch

www.airforcemuseum.co.nz

Ohakea Wing of the RNZAF Museum

RNZAF Base Ohakea

Ministry of Defence: www.defence.govt.nz

www.nzdf.mil.nz

www.navy.mil.nz

www.army.mil.nz

www.airforce.mil.nz

www.defence.govt.nz

www.airforcemuseum.co.nz

www.armymuseum.co.nz

www.navymuseum.mil.nz

mailto:[email protected]

mailto:[email protected]

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Legislation Administered by NZDF

New Zealand Defence Force:

ActsVisiting Forces Act 2004

Armed Forces Canteens Act 1948

Armed Forces Discipline Act 1971

Courts Martial Appeals Act 1953

Defence Act 1990

Military Decorations and Distinctive Badges Act 1918

Military Manoeuvres Act 1915

Regulations and OrdersAir Efficiency Award Regulations 1954

Armed Forces Canteens (Fees and Travelling Expenses) Regulations 1974

Armed Forces Discipline Act Commencement Order 1983

Armed Forces Discipline (Exemptions and Modifications) Order 1983

Armed Forces Discipline (Legal Services Fees and Allowances) Regulations 1991

Armed Forces Discipline (Legal Services Fees and Allowances) Amendment Regulations 1997

Armed Forces Discipline Regulations 1990

Armed Forces Discipline Rules of Procedure 1983

Armed Forces Equivalent Ranks Order 1983

Armed Forces Establishments Road Traffic Bylaws 1978

Courts Martial Appeals Act Commencement Order 1955

Courts Martial Appeals (Fees and Allowances) Regulations 1997

Courts Martial Appeal Rules 1954

Defence Act Commencement Order 1972

Defence Regulations 1990

Efficiency Decoration Regulations 1966

Efficiency Medal Regulations 1966

Kayforce Wills Notice 1953

Medal for Long Service and Good Conduct (Military) Regulations 1959

New Zealand Cadet Forces Medal Regulations 1989

New Zealand General Service Medal (Kuwait) Regulations 1992

New Zealand General Service Medal (Sinai) Regulations 1992

New Zealand General Service Medal (Iraq) Regulations 1994

New Zealand General Service Medal (Peshawar) Regulations 1994

New Zealand General Service Medal (Somalia) Regulations 1994

New Zealand General Service Medal (Cambodia) Regulations 1995

New Zealand General Service Medal (Mozambique) Regulations 1995

New Zealand General Service Medal (Arabian Gulf) Regulations 2001

New Zealand General Service Medal (Bougainville) Regulations 2001

New Zealand General Service Medal (Afghanistan) Regulations 2002

New Zealand General Service Medal (Indian Ocean) Regulations 2002

New Zealand General Service Medal (Korea 1954-57) Regulations 2002

New Zealand General Service Medal (Malaya 1960-64) Regulations 2002

New Zealand General Service Medal (Near East) Regulations 2002

New Zealand General Service Medal (Rwanda) Regulations 2002

New Zealand General Service Medal (Solomon Islands) Regulations 2002



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Legislation Administered by NZDF

New Zealand General Service Medal (Vietnam) Regulations 2002

New Zealand General Service Medal (Thailand) Regulations 2003

New Zealand Special Service Medal (Nuclear Testing) Regulations 2002

New Zealand Operational Service Medal Regulations 2002

New Zealand White Ensign Regulations 1968

Queen’s Medal for Champion Shots of the Air Forces Regulations 1954

Queen’s Medal for Champion Shots of the New Zealand Naval Forces Regulations 1958

Royal Warrants

The East Timor Medal

Air Efficiency Award

Cadet Forces Medal

Efficiency Decoration

Efficiency Medal

Medal for Long Service and Good Conduct (Military)

New Zealand Armed Forces Award

New Zealand Army Long Service and Good Conduct Medal

New Zealand General Service Medal 1992



New Zealand Memorial Cross

New Zealand Meritorious Service Medal

New Zealand Operational Service Medal

New Zealand Service Medal 1946-1949

New Zealand Service Medal 1946-1949 2002

New Zealand Special Service Medal

Queen’s Medal for Champion Shots of the Air Forces

Queen’s Medal for Champion Shots of the New Zealand Naval Forces

Royal New Zealand Air Force Long Service and Good Conduct Medal

Royal New Zealand Naval Reserves Officers’ Decorations

Royal New Zealand Naval Volunteer Reserve Long Service and Good Conduct Medal

Royal New Zealand Navy Long Service and Good Conduct Medal

Vietnam Medal

The activities of the Armed Forces are further regulated by Defence Force Orders issued pursuant to the Defence Act 1990 and the Armed Forces Discipline Act 1971.

Veterans’ Affairs New Zealand:

ActsThe War Pensions Act 1954

The Veterans’ Affairs Act 1999

The Patriotic and Canteen Funds Act 1947

Regulations and OrdersThe War Pensions Regulations 1956

War Pensions (Rates of Pensions and Allowances) Order 2003

War Pensions (Arrangement with Australia) Regulations 1967

War Pensions (Total Deafness) Order 1997

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3

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3

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N



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39



SECTION 3Key Priorities

Introduction

The NZDF focused on five Key Priorities (KPs), as detailed in the Output Plan. These KPs are shown below, while the progress achieved against them is detailed in the following pages.

KP 1: Defence Policy

Provide advice to Government on all military aspects of national security that meet State Sector standards for advice; developing effective NZDF policies and plans to action the Government’s investment and employment priorities for the NZDF; and managing the effective actioning of Government’s priorities for the NZDF.

This KP is linked to the Key Government Goals of National Identity, Economy, and Restore Trust in Government.

KP 2: Personnel

Ongoing capability to effectively deliver defence outputs with a defence team of service personnel, civilian staff and commercial partners.

This KP is linked to the Key Government Goals of Skills, Economy and Addressing Inequality.

KP 3: Military Capability

The development of long-term military capability to meet future security challenges to New Zealand and its interests in accordance with Government policy.

This KP is linked to the Key Government Goals of National Identity and Restore Trust in Government.

KP 4: Defence Diplomacy

Enhanced and ongoing defence diplomacy and defence cooperation with regional countries.

This KP is linked to the Key Government Goals of National Identity, Economy, and Environment.

KP 5: Efficiency and Effectiveness

Improved matching of NZDF organisation and infrastructure with core operational requirements to reflect a “best practice” approach.

This KP is linked to the Key Government Goals of Economy and Restore Trust in Government.

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3

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Key Priority 1: Defence Policy

Provide advice to Government on all military aspects of national security that meet State Sector standards for advice; developing effective NZDF policies and plans to action the Government’s investment and employment priorities for the NZDF; and managing the effective actioning of Government’s priorities for the NZDF.

Targets:

The main objectives of this KP were to: in partnership with the Ministry of Defence (MoD), continue to implement the directive issued by the Government on the approved recommendations of the Review of Accountabilities and Structural Arrangements (RASA) for Defence Organisation governance, accountability and responsibility structures, processes, leadership and cultural change; in concert with the MoD, contribute to the Defence Capability and Resourcing Review (DCARR); undertake transition planning to enable the NZDF to implement the Government’s capability decisions; upgrade required Analysis Tools and Guidance for Setting Training Requirements to Meet Output-related Missions and Tasks, and National Security Outcomes and construct an initial set of Guidance documents;

Performance:

Completion of the DCARR confirmed that gaps in organisational capability within Headquarters New Zealand Defence Force (HQNZDF) and MoD Policy staff was inhibiting the way the two departments could work together. The deficiencies related to staff numbers, skill sets, and deficiencies in the systems and process support for corporate planning. Proposals for a Defence Funding Package include recovery of organisational capability, and such remedial work will generally resolve the issues identified in the RASA.

The DCRR was completed in December 2004 and its findings submitted to Government. In consequence, Government has announced the Defence Sustainability Initiative (DSI). An interdepartmental Defence Funding Package Implementation (DFPI) Project has been established within HQNZDF to implement the systems and processes necessary to provide assurance that the DSI will achieve Government’s objectives.

Work has continued advancing LTDP projects through the Capability Management Framework.

Due to work involved with the DCARR, no further progress has been made on reviewing and generating an updated set of NZDF Employment Contexts relevant to National Security Outcomes.

Significant progress has been made on the Joint Mission Essential Task List (JMETL), with a concept model based on one of the Employment Contexts. Once ratified, the JMETL model will be extended to all other Employment Contexts in order to achieve a completion date of mid to late 2006. A Lessons Learned (LL) application has been trialled for an interim period before global application.

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Key Priority 2: Personnel

Ongoing capability to effectively deliver defence outputs with a defence team of service personnel, civilian staff and commercial partners. (Note that this KP incorporates steps that are consistent with the Government’s social economic priorities by providing opportunities for training and rewarding careers).

Targets:

This involved: implementing personnel policies and practices to remain competitive with the external market and to retain capability; reviewing NZDF service and employment policies; development of an overarching NZDF Strategic Personnel Planning Policy based on a consistent methodology to determine the future personnel requirements of the NZDF; contribute to a safe working environment and maintaining a framework for organisational monitoring.

Performance:

Figure 1: NZDF Total Numbers by Year

Figure 1 indicates that personnel numbers have stabilised over the last 12 months. While there are ongoing concerns about personnel attrition (as reflected in Figure 2) and the loss of experienced personnel (particularly in Army), recruitment targets continue to be met across most trade groups and total attrition has trended only slightly upwards over the last 12 months. Shortfalls in junior to mid-level ranks range from 24% to 40%.

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Figure 2: Regular Force Attrition since July 2003

Figure 3: Satisfaction with employment in the NZDF

Figure 3 reflects that satisfaction with service in the NZDF has remained relatively constant over time.

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The development and refinement of personnel policies aimed at recruitment and retention have continued to be the main focus for Personnel Branch. This has involved the development of a range of options for a targeted pay adjustment for NZDF military personnel, a review of military allowances, the continued refinement of operational allowances payment mechanisms, and the development of a number of significant “wellness” policies in support of increasing operational effectiveness e.g. substance misuse and a mental health strategy.

The 2005 pay adjustment builds on the success of the last four annual adjustments by continuing to close the gap between NZDF median salary levels and those in the wider state and public sectors. The 2005 adjustment is aimed at addressing longstanding internal relativity issues within the Services. It also increases the trainee and minimum salary levels in line with increases to the Minimum Wage Act. Table 1 below shows the increase in average salaries in selected equivalent ranks since 2000.

Table 1: NZDF Average Salaries by Rank 2000 – 2005 Comparison

Rank Equivalent Jan 2000 Average Salary Jul 2005 Average Salary % IncreasePrivate $24,525 $31,200 27.22%Corporal $34,688 $43,700 25.98%Staff Sergeant $44,813 $56,100 25.19%Lieutenant $36,938 $46,260 25.24%Major $62,625 $75,780 21.01%

The mechanism for the payment of operational allowances is under further review with the Inland Revenue Department, with the intent of simplifying the current process of paying operational allowances through the Ministry of Social Development Defence Force Allowance Programme.

There have been a number of initiatives to reinforce the NZDF as a safe working environment.

A recent research paper on the effectiveness of the NZDF’s substance misuse policy has indicated that NZDF personnel want a clear policy on illicit drug use and that they want the policy applied consistently. The majority of those surveyed also said that they did not want to work alongside someone who might be putting them or their unit at risk and that they appreciated working for an organisation that did not condone substance misuse.

The NZDF has recently reviewed its existing substance misuse policy and is in the process of developing a new policy. The new policy is based on the premise that the misuse of substances, such as alcohol and illicit drugs, by members of the Armed Forces, is not compatible with an effective or efficient NZDF. It takes a holistic approach to the use and potential use of illicit drugs by Service members, by including education, training and deterrent components as well as providing for rehabilitation, counselling and administrative and/or disciplinary action to be taken where necessary. The findings of the research paper have been beneficial in that they have confirmed that the NZDF is “going down the right path” with the development of its new substance misuse policy.

In response to allegations of abuse of Regular Force Cadets at Waiouru some years ago, the Government appointed an independent assessor to examine the information from ex-cadets and other sources relating to those alleged abuses. The Minister of Defence also directed that the Ministry of Defence review the NZDF’s policies and practices relating to the prevention of physical, sexual and other abuse and the management of any such events if they do occur. Both reviews are ongoing.

The development of a high-level mental health strategy has been completed in consultation with NZDF health professionals. A set of overarching principles has been developed utilising the New Zealand Health Strategy.

With respect to accommodation assistance, a project has been incorporated into the Defence Sustainability Initiative (DSI) list of projects. A project charter has been developed, which provides for the programme of work, including additional resourcing through the DSI. Workshops to discuss the use of the newly developed Accommodation Assistance Framework Model are scheduled for June 2005, with further workshops scheduled to review the issues relevant to the development of the housing and accommodation assistance policy.

A medals policy cell was established in June 2004. The focus of work has been on addressing outstanding policy issues and grievances. The cell is currently involved in the development of a range of medallic issues including: the review of long service medals, the NZGSM Korea, the offer of the Pingat Malaysian Medal by the Malaysian government, and the development of two NZSSM proposals. In July 2005 ceremonies will be held to recognise the service of personnel who were executed for desertion in WW1. The ceremonies will involve the award of certificates of service, and medals, to surviving family members.

The first full year of activity by a remodelled civilian HR management structure, comprising policy and capability and service delivery directorates, has resulted in a number of projects to ensure best practice conditions of employment for civilian staff as well as equity and health and safety initiatives across the entire NZDF. These have included the promulgation of a policy on civil staff induction and the supporting

Key P

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3

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3

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resources to implement that policy, a new policy on civil staff delegations and the trialling of two pilot courses in the integrated management of civilian staff.

An external agency carried out a review of the progress NZDF had made towards implementing the recommendations of the 1997 Burton Report. The review found that the NZDF had made progress on removing barriers to full gender integration and that the numbers of females across the NZDF had increased in the last seven years. The review noted that the NZDF was ahead of similar organisations here in New Zealand and other western military forces. The review contained a number of recommendations that will be implemented over the next two years that will maintain ongoing progress towards a fully integrated Defence Force. Equal Employment Opportunity infrastructure training has been fully developed and delivered across the entire NZDF during the past year.

Phase 2 of the project to reduce lower limb injuries among regular force personnel is almost complete. This took the form of a pilot study to evaluate whether specialised training with the aim of preventing ankle sprains could be incorporated into the normal training regimen. The next phase will be an examination of what has been learned from the pilot study, so that planning for the final phase of the research can be scheduled. A new health and safety manual has also been developed and introduced.

Collective bargaining was conducted with four unions representing civilian employees in NZDF. Settlement was reached with the Defence Technology Agency Staff Association in September 2004 for a collective agreement through to 30 September 2005. Settlement was reached with the Public Service Association in October 2004 for a collective agreement through to 31 August 2006. Settlement was reached with the National Union of Public Employees for a collective agreement through to 30 September 2005. And settlement was reached with the Nelson Marlborough Westland Combined Unions for a collective agreement through to 30 November 2005.

Salary increases negotiated in these four settlements ranged from 2 to 2.5% for employees covered by the resulting collective agreements.

The development of a revised officer reporting and management tool to support the NZDF Competency Framework has been completed and is currently being trialled for implementation across officer and civilian groups.

The administration of the NZDF Ongoing Attitude Survey continues to provide a valuable source of information to monitor organisational health and as an aid to HR policy development. A NZDF Cohort Study has also been implemented. This survey aims to track selected cohort groups of officer and other rank recruits across the three Services over time, to monitor recruit perceptions and levels of satisfaction and inform future recruitment, training and management practices.

Overseas recruiting efforts for the Services have continued to be hindered by difficulties in meeting immigration requirements in the skilled migrant category. Discussions with the New Zealand Immigration Service to work through these issues continues.

An Archives project was established to implement the recommendations of an internal review of Personnel Archives. The NZDF Personnel Archives at Trentham Camp is the repository for the files of former Service personnel. It contains 1.5 million files relating to over 420,000 personnel who have served in the Armed Forces from the South African War to the present day. The Archives project has begun addressing 23 separate project initiatives arising from the review. These include the transfer of 170,000 pre-1920’s files to Archives New Zealand, the development of a comprehensive IT system, including an electronic index, disaster management plans, compliance with new legislative requirements for archival record keeping and enhanced customer services and standards.

Over the past year, the Defence Employer Support Programme (DESP) has expanded its operations significantly. Territorial and Reserve units conduct a range of activities designed to gain and maintain the support of employers throughout New Zealand. DESP provides funding and expertise, as well as facilitating publicity through links with the NZDF Public Relations Unit. Activities conducted include business breakfasts, ‘Business After Five’ functions, days at sea and visits to military exercises. A further range of activities is under development. Recommendations have been made for the appointment of Territorial Forces Employer Support Council and a decision on this is expected shortly. Developments in overseas employer support programmes are being monitored and incorporated where appropriate.

Key P

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Key P

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3

SEC

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N

3

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N



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N

3

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Key Priority 3: Military Capability

The development of long-term military capability to meet future security challenges to New Zealand and its interests in accordance with Government policy.

Targets:

This involved: in partnership with the MoD, manage and update the Long-Term Development Plan (LTDP); in partnership with the MoD, continue to implement, manage and review the Capability Management Framework (CMF); in partnership with MoD, develop capability options, seek approval to proceed with acquisition, and implement acquisition plans for the purchase of equipment to maintain and develop the NZDF’s capabilities to meet Government’s defence policy objectives within agreed funding guidelines; in partnership with the MoD, continue to upgrade the required analysis tools and guidance for setting future capability requirements; establish a mechanism for assessment of ADF joint operational doctrine publications (ADDP) for applicability to NZDF; develop a Lessons Learned System for the NZDF; review NZDF Contingency Plans; review existing and, where required, develop new Memoranda of Understanding (MOU) with other government departments and agencies covering a wide range of NZDF Support, including Multi-Agency Operations and Tasks (MAO&T) conduct an assessment of each publication on a case-by-case basis for adoption, supplementation or replacement in the NZDF doctrine hierarchy; complete acquisition phases of the Joint Command and Control System (JCCS) project and move to implementation phases; develop implementation plans for the NZDF Project REACHBACK [Theatre High Capacity Communications Systems (THCCS) and New Zealand to theatre communications]; implement military grade messaging system to replace existing signals infrastructure; and implement a phased programme of cryptographic modernisation in concert with allied programmes through to December 2008.

Performance:

An important element of the Government’s approach to strengthen the capability of the NZDF has been the implementation of the Long-Term Development Plan (LTDP). The LTDP was updated in November 2004 and is a planning tool to enable decisions to be taken in the context of current defence policy, the priority of projects and sustainability. The projects identified in the LTDP will provide the NZDF with a range of capabilities that will enable New Zealand to participate in a broad spectrum of deployed operations and assist other government agencies around New Zealand.

– During the past year significant progress has been made on most projects on the LTDP as the following summary shows:

– A contract with L-3 Integrated Systems for the P-3 Systems Upgrade was signed in October 2004. The acquisition process is proceeding on schedule.

– A contract with L-3 Spar for the C-130 Life Extension project was signed in December 2004. The acquisition process is proceeding on schedule.

– Responses from industry for the Boeing 757 modification package have been evaluated.

– March 2005 saw the Government announce that NH Industries’s NH90 Helicopter had been selected to replace the Iroquois.

– An Invitation to Register has been prepared for the training helicopter.

– Discussions with Australian Defence officials has occurred on the analysis of options for the upgrade of the P-3 Orion and C-130 Hercules Self-Protection Systems.

– NZDF personnel have contributed to a study led by Ministry of Fisheries into options for a short-medium range aircraft to meet aircrew training and aerial patrol requirements. Further involvement by NZDF is dependent on future Cabinet decisions.

– A preliminary investigation into options to address a possible shortfall in tactical airlift capability has been completed.

– The proposals for a Multi-Role Vessel, Offshore Patrol Vessels, and Inshore Patrol Vessels were completed early 2004 and the contract for the supply of one MRV, two OPVs and four IPVs was awarded to TENIX in July 2004.

– Comprehensive documentation relating to the Australian upgrade for their ANZAC Class frigates was received in December 2004 and is under evaluation. Further information is to be sought from industry partners in the ANZAC Ship Alliance; TENIX and SAAB (Australia) during 2005. The ANZAC Ship Self Defence Upgrade Project is currently on the LTDP for 2011/12.

– The final acceptance into service testing is being conducted on the LAVs. Army continues training towards the goal of having a LAV equipped Battalion at DLOC by Dec 05.

– The LOV project remains in the introduction into service phase with most of the first batch of vehicles now in country and beginning acceptance into service by Army.

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– The Medium Range Anti-Armour Weapon (MRAAW) project’s acquisition phase is ongoing with a forecasted introduction into service during 2006.

– The Direct Fire Support Weapon project remains in the acquisition phase. A number of weapons and sights systems are under review as part of this process.

– The Very Low-Level Air Defence project is in the acquisition phase. A contract was signed in May 04 for the delivery of radar and support systems from the Spanish Company Indra with an agreed introduction into service date of mid 06.

– The Special Operations Equipment, Army Engineering and Combat Service Support Vehicle Projects are still ongoing.

– Acquisition of the Joint Command and Control System (JCCS) was delayed. Cabinet approval to proceed with industry invitations to register interest was given in May 05. JCCS is forecasted to achieve baseline operational capability by Dec 07.

– The NZDF Intelligence, Surveillance and Reconnaissance (ISR) study was completed in June 2004. Personnel shortages prevented further action until Mar 05 when the Command, Control, Communications and Computers ISR (C4ISR) Programme Office has developed the ISR 2010 Programme. This program is designed to action recommendations from the report and delivers an integrated ISR capability that addresses New Zealand’s strategic, operational and tactical environment, and is Complementary to whole of government and strategic partner’s ISR capability. Linked to this, the Land ISR Project requirements studies have commenced but acquisitions are unlikely before 2008.

– Cabinet considered a progress report in Dec 04 on the business case for consolidation of RNZAF operational capability at Ohakea Air Force Base. In March 2005 the Cabinet noted the findings of the Ohakea consolidation business case and approved funding for the purchase of land and to commence planning and design, evaluation of procurement methodologies and preparation of detailed cost estimates. A further report back to Cabinet is expected to be made next year.

The Capability Management Framework (CMF) is being utilised for all current projects on the LTDP with projects being aligned to the process depending on progress prior to the introduction of CMF. The review of the CMF, as required on its introduction, is under way. The review requirements have been superseded by the DSI project, requiring a more substantive review than originally foreseen.

The NZDF continues to make progress towards upgrading systems and processes to operate in a joint, integrated, multi-national and multi-agency environment.

A further draft of the Strategic NZDF vision (encapsulating the strategic capability concepts of a knowledge edge, tailored joint, multi-mission and network force) has been completed and is currently being reviewed. The draft charter for the strategic operational concept and generic NZDF missions and possible effects has been completed.

The project charter for the assessment of Australian Defence Force (ADF) joint operational doctrine publications for applicability to the NZDF has been completed and approved. Recruitment is underway to permanently man the Joint Doctrine Management Cell.

The acquisition phase to develop a lessons learned system is now anticipated to be completed during 2006. A review of NZDF contingency plans will be progressed once staff are available. A MOU between the NZDF and NZ Police concerning the deployment of police was concluded in Mar 05. A MOU between the NZDF and Antarctic NZ Ltd is being entered into, and several existing MOUs are being updated.

The strategy for Project REACHBACK has been endorsed by the Defence Coordinating Committee and the project to implement a military grade messaging system is on target for completion during 2005. The project to implement a phased programme of cryptographic modernisation is progressing.

Handing Over Ceremony Longueval, France – Return of the Unknown Warrior

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Key Priority 4: Defence Diplomacy

Enhanced and ongoing defence diplomacy and defence cooperation with regional countries.

Targets:

This will involve: conducting policy level discussions and meetings with key regional partners: providing defence representation and coordination in respect of ASEAN Regional Forum activities; contributing policy input to the ongoing campaign against terrorism; contributing to ongoing developments in respect of Closer Defence Relations (CDR) with Australia and the Five Power Defence Arrangements (FPDA). Continuing to manage and develop our defence relationships with regional countries, with the focus on the South Pacific and Asia; further calibrating Mutual Assistance Programme (MAP) policy to meet current security requirements; continuing to develop specific country guidance papers for our security relationships and international activities; reviewing the policy for Chiefs of Staff Overseas Visit Programme; and developing a programme of overseas representational visits for units.

Performance:

There have been a number of successful bilateral defence visits, political/military talks and security discussions with key partners in the region. The Chief of General Staff PLA, China, CDF Brunei, The NATO Secretary General and the Commander of UN and US Forces in Korea visited during 2004/05 and bilateral discussions with Australia, Singapore, Malaysia, Fiji and Japan have taken place this year. CDF attended the BRITANZ biennial Defence Chiefs meeting with his counterparts from UK and Australia. Defence has been represented at the annual round of ASEAN Regional Forum (ARF) meetings including the annual Security Policy Conference. Defence has sent representatives to the Operational Working Group meetings of the Proliferation Security Initiative (PSI) and participated in exercises. Table 2 below summarises the overseas diplomacy visits carried out by the Chief of Defence Force, Vice Chief of Defence Force and Service Chiefs, and those countries where diplomacy visits and major exercises were conducted by NZDF force elements during the reporting period. Table 3 summaries the MAP countries the NZDF engaged with over the same period.

Table 2: Summary of Overseas Defence Diplomacy Visits and Exercises by Country

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Chi

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Chi

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Com

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Join

t Fo

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Maj

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an

d D

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s by

For

ce

Elem

ents

Force Elements Involved

Afghanistan X X X X

Australia

X X X X

HMNZ Ships Te Mana, Endeavour, Canterbury, P-3K Orion, C-130H, 1RNZIR, Land Combat and Support Forces

Bougainville X

Brunei X Land Combat Support Elements

CanadaX X

P-3K Orion, C-130H,

NZSAS

ChinaX X X

HMNZ Ships Te Kaha,Te Mana, Endeavour

Cook Islands X HMNZS Resolution

Federated States of Micronesia

XP-3K Orion

FijiX

HMNZS Resolution, Land Combat Support Elements

France X

Hong KongX

HMNZ Ships

Te Mana, Endeavour

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Chi

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JapanX X X X

HMNZ Ships Te Mana, Endeavour, P-3K Orion

MalaysiaX X

HMNZ Ships Te Kaha, Te Mana, Endeavour, P-3K Orion, Land Combat and Support Forces

Marshall Islands

XP-3K Orion

Middle East X X X HMNZS Te Mana

Noumea X Land Combat Force

NuieX

HMNZS Resolution, Land Combat and Service Support Forces

Philippines X HMNZ Ships Te Kaha, Endeavour

Republic of Korea

X XP-3K Orion

RussiaX

HMNZ Ships

Te Mana, Endeavour

Samoa X HMNZS Resolution

SingaporeX X X X

HMNZ Ships Te Kaha, Te Mana, Endeavour, P-3K Orion, Land Combat and Support Forces

Solomon Islands

X X XP-3K Orion

Thailand X X X HMNZ Ships Te Kaha, Endeavour

Timor Leste X

Tonga X HMNZS Resolution

Tokelaus X HMNZ Ships Te Kaha, Resolution

Turkey X

United Kingdom

X XP-3K Orion

United States X X X X C-130 Hercules

Vanuatu X P-3K Orion

Vietnam X X HMNZ Ships Te Kaha, Endeavour

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Table 3: Summary of MAP Training Conducted by Country

Bru

nei

Coo

k Is

Fiji

Mal

aysi

a

Niu

e

PN

G

Phi

lippi

nes

Sam

oa

Sing

apor

e

Sol

omon

Is

Thai

land

Tong

a

Vanu

atu

NZDF Command and Staff College (1) 1 1 1 1 1 1 1

Training in NZ (RNZN) (1) 13 2 3 4 3 2 1 5 3 7Training in NZ (NZ Army) (1) 11 5 6 18 6 4 6 4 3 23 13

Training in NZ (RNZAF) (1) 2 1 6 1 4 3 10 3 2 1

Attachments in NZ (1) 2 3 1 5 4 2 2 2

NZDF Technical Advisers (2) 1 3 1 1 2

Mutual Assistance Training Teams visiting (3) 1 3 2 1 1 1

Visits (MAP Talks) X X X X X X XMAP Talks in NZ X X X

Ministerial and Cabinet submissions have been made in respect of Operation Enduring Freedom and a range of other deployments including the UN missions to Sudan, Iraq and Afghanistan. Defence has been working closely with MFAT on coordinating policy approaches to a range of Pacific issues and particularly our continuing commitment to the Regional Assistance Mission to Solomon Islands (RAMSI).

The ANZ Consultative Committee and Ministerial meetings were held in May. The various working groups met throughout the year and reported to the ANZ DCG meeting in April 2005. The replacement Visiting Forces Act was passed in 2004 enabling the final ratification of the Status of Forces Agreement (SOFA) with Australia. In 2004 Defence Ministers endorsed a paper on the future direction of the FPDA and the first exercise to include a non-conventional threat scenario was held in September 2004. A range of MAP talks with our partners in Asia and the Pacific were conducted throughout the year.

Some country guidance papers have been completed, and others are under action. Delays have occurred because staff have been allocated to higher priority tasks

1 Where a number is expressed that is the number of people from that country who took part in training2 On long term (2-3 yrs) in-country3 Denotes number of NZDF teams, not people

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Key Priority 5: Efficiency and Effectiveness

Improved matching of NZDF organisation and infrastructure with core operational requirements to reflect a “best practice” approach.

Targets:– continuing the NZDF Efficiency Review Programme;

– establish a NZDF Programme Support Office to coordinate the planning, prioritisation, support and monitoring of NZDF Projects;

– developing a Corporate Performance Management System (CPMS);

– implement the results of the 2003 Commercial Line (CL) Vehicle Audit;

– implement Integrated Logistics Support (ILS) as the materiel management methodology for the NZDF;

– review the new Defence Public Relations Unit structure;

– developing a consistent NZDF-wide Information Technology and Communications Architecture and Strategy, and undertaking a progressive programme of establishing compliance with architecture, and implementing this through a systems replacement programme;

– reviewing progress of the new Defence Public Relations structure;

– conducting complementary external and internal NZDF communications (public relations) programmes;

– developing policy and an implementation strategy for the management of Intellectual Property projects from concept to commercial realisation;

– continue the comprehensive review of the Military Justice System to assimilate development in New Zealand law - with particular reference to the New Zealand Bill of Rights Act and other major social legislation and international developments in military law;

– implement a mid-life upgrade to the ATLAS personnel management system. Focus of upgrade is to implement enhanced functionality for the management of personnel on deployment, to improve the graphical user interface, provide more effective integration with other NZDF systems (particularly SAP - in preparation for longer term migration to SAP), and to improve the user interface for greater effectiveness;

– complete the implementation of the Defence Medical Information System (DMIS);

– enhance existing performance management and business intelligence capabilities through the continued implementation of the NZDF Data Warehouse;

– implement CIS integration between the NZDF and the MOD to the extent required;

– develop strategy for the implementation of tools and techniques that support greater military and corporate effectiveness through enhanced information and knowledge management;

– provide a common application to meet the recruiting needs of all three Services, both military and civilian, and of HQ NZDF, integrated to NZDF current systems;

– implement the Joint Logistics Support Organisation (JLSO) that integrates and streamlines the NZDF internal Logistics Chain and Support functions for non-military specialist equipment and services, infrastructure (Works Services) and personnel and administrative support investigating the creation of a NZDF Joint Logistics Support Organisation;

– continuing with procurement initiatives (such as e-procurement, whole of government purchasing and inventory optimisation);

– review NZDF Supply Chain with a view to improved use of SAP materials management functionality and improve operational readiness and sustainment and inventory reductions; and

– re-organise catering and hospitality services.

Performance:

The NZDF has continued to make significant progress towards improving effectiveness and efficiency.

The Directorate of Capability Programme Support (DCPS) within Development Branch has undertaken the role of de facto NZDF office for those projects within the LTDP programme; assisting teams with the utilisation of the CMF and setting standards for project templates and reporting requirements. The consolidation and presentation of reporting data to governance meetings has proved beneficial. The reporting requirements have now been extended to include efficiency and effectiveness projects.

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DCPS is evolving the project management methodology for adoption within NZDF and coordinating project management training. More recently, the DCPS has trialled a new process for the CP–Minor programme to increase visibility and accountability of resource allocation to projects. It is expected that the DCPS will be the cornerstone of the NZDF Programme Support Office to be created within the DSI project.

The CPMS project has now been subsumed within the DFPI project.

Resources have been obtained to progress Knowledge Management. A knowledge management framework, high-level requirements and a draft work programme are expected to be delivered during 2005.

Policy has been rewritten to reflect a best practice approach to CL Vehicle Management and policies and procedures. The implementation of the CL vehicle audit is being held in abeyance pending the conclusion of other major projects and the release of resources.

The review of the new Defence Public Relations Unit structure has been completed and implemented. The review of the Military Justice System is continuing, with approval being sought to roll over the bid on the legislative programme for 2005.

Delivery of the first release of the upgrade to the ATLAS personnel management system is on target for 2005. The vaccination module of the Defence Medical Information System has been fully implemented. A contract has been signed for delivery of the patient information module.

Development of phase 2 of the Corporate Management Information System (CMIS) is progressing with the first release of the Navy Scorecard. The implementation of the Joint Engineering Management System (JEMS) is due for final release during 2006.

The implementation of Corporate Information System (CIS) integration between the NZDF and MoD is progressing. The progress towards a Joint Recruiting System has slowed due to insufficient resources.

The development and embedding of Integrated Logistics Procedures (ILS) disciplines in NZDF materiel acquisition and management methodologies continues. There is also continued migration of legacy systems and platforms onto the ILS framework.

All project documentation for the implementation phase of the Joint Logistics Support Organisation has been completed.

Opportunities to streamline or optimise procurement processes have been developed for example: forms, cell phone charges, freight charges, and rations. Participation in whole of government purchasing processes continues. Inventory optimisation has progressed, in particular the Inventory Management and Procurement Optimisation review has been instigated to provide options for further optimisation. A SAP solution to automate and upgrade purchase and payment for travel services is due for implementation late 2005.

The NZDF is currently validating the effectiveness of current initiatives and development for catering and hospitality services, prior to possible further rationalisation and enhancement.

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SECTION 4NZDF Statement of Service Performance

Military Capability

The annual Outputs of the NZDF fall into two categories: performing predictable or routine tasks, such as providing policy advice or continuing to support existing peace support operations; and maintaining an ability to respond to unknown future security events.

The latter preparedness requirement is specified in the NZDF Purchase Agreement by detailing the level of military capability that must be maintained against the five Employment Contexts (ECs), depicted in Section 2 of this Report. These ECs identify representative security events that would pose a threat to New Zealand’s national security outcomes, and to which the Government would expect to provide a military response. The ECs provide the guidance to determine the Operational Level of Capability (OLOC) required to conduct such military tasks effectively and safely. Because of the high costs of maintaining OLOC, the NZDF is funded to routinely maintain a lower Directed Level of Capability (DLOC). This allows force elements to be raised to OLOC within specified warning times, before being deployed on operations.

Raising forces to OLOC generally includes additional training and personnel preparation appropriate to the environment and task, additional equipment maintenance, any necessary upgrades to military equipment, and logistic support planning. Extra costs for OLOC generation and operational deployments are covered either by offsets within the existing vote (for example where operational tasks fulfil some of the routine DLOC training requirements); or by supplementary funding under Output Class 16, Operationally Deployed Forces.

Performance Measurement

The following performance measurement is applicable to Output Classes 2 to 4, 7 to 10, and 12 to 14. Specific output performance measures are provided with Output Classes 1, 6, 15 and 16.

Assessment of Output Performance by the Ministry of Defence

The Evaluation Division of the Ministry of Defence confirms that the output specifications are consistent with Defence policy and examines whether the outputs are being delivered in the quantity and quality that meets policy objectives. Policy validation is available from current strategic guidance, existing Defence policy and Service documentation relevant to the Force Element.

Assessment of Output Performance by the NZDF

The NZDF evaluates military capability through the NZDF Operational Preparedness Reporting System (OPRES). Output delivery is evaluated in both quantity (force structure) and quality (preparedness) terms with emphasis being on the quality dimension.

The OPRES reporting regime includes Biannual Operational Preparedness Reports, Quarterly Reports to the Minister of Defence and Special Reports on a change of preparedness state. Where appropriate and practicable, operational Service Performance evaluation will be conducted by external agencies, e.g. by Allied Forces. Operational commanders also draw on a range of routine inspections and other activities. The standards to be achieved are detailed in the applicable directive or instruction, but generally a 90 per cent or better achievement rate is expected.

Measurement Areas

The quality dimension is assessed against the Force Element’s preparedness to perform in four Key Measurement Areas (KMAs): Readiness, Combat Viability, Deployability and Sustainability. The objective for each force is to achieve a P1 assessment (fully prepared at the required level of capability) in each of the four KMAs used to measure military preparedness.

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Measures

The three Services have separate but similar Key Performance Indicators (KPIs). Indicative KPIs and Performance Measures used to quantify performance in achieving preparedness relative to DLOC are contained in the NZDF OPRES Directive.

Each Force Element is assessed against:

– Readiness–having completed the required individual and unit training to bring it to a state where the force can complete final preparation within the designated Response Time for applicable Employment Contexts. This requires each Force or Force Element to conduct a programme of readiness training against Mission Essential Tasks for the applicable Employment Contexts in accordance with Service Directives and Training Instructions.

– Combat Viability–the in–theatre ability to achieve its military tasks for applicable Employment Contexts using current resources. This is assessed with reference to collective proficiency and equipment condition in accordance with the operational readiness criteria statement.

– Deployability–capable of reaching the OLOC (OLOC generation) and completing final preparation for appropriate Employment Contexts, thereby becoming available for deployment. This requires extra readiness training and stores in accordance with the appropriate operational readiness criteria statement.

– Sustainability–with personnel and resources available for the sustainment/ rotation of deployed elements for a given period of operations, in accordance with the appropriate operational readiness criteria statement.

Assessment of Output Performance by the Office of the Controller and Auditor General

The role of the Office of the Controller and Auditor General (Audit New Zealand) is to audit the NZDF’s Statement of Service Performance and to express an independent opinion as to whether it fairly reflects the NZDF’s service performance achievements in relation to performance targets set out in the NZDF Departmental Forecast Report.

Arrival in New Zealand - Return of the Unknown Warrior

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Output Class 1: Military Policy Development, Coordination and Advice

Output Class Components

Provide military advice to the Minister of Defence on:

– New Zealand’s defence interests (including intelligence);

– military options for safeguarding and advancing New Zealand’s security interests;

– military options available for contributions to collective and regional security; and

– advice on the military capabilities required to meet the Government’s defence policy objectives and to support its defence strategy.

Outputs Within Output Class 1

Output 1.1: Collection, Collation, and Dissemination of Military Intelligence

The collection, collation and dissemination of military intelligence on areas of interest to New Zealand and as specified in the NZDF Intelligence Plan.

Output 1.2: Development and Production of Military Policy

The development and production of military policy and the provision of military advice to the Minister of Defence.

Output 1.3: Operational Military Policy Advice

The provision of advice on operational military policy to the Minister of Defence.

Output 1.4: Ministerial Correspondence and Parliamentary Questions

Draft responses to Ministerial Correspondence, to requests under the Official Information Act and to Parliamentary and other questions on behalf of the Minister.

Above: A Defence Sustainability Initiative (DSI) planning meeting in progress

Below: Researching a response to an official information request

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Performance

Output performance will be measured by the degree of satisfaction expressed by the Minister, or by the appropriate committee or agency against the seven characteristics of quality advice: Purpose, Logic, Accuracy, Options, Consultation, Practicality and Presentation.

– 95% of the first drafts of all policy papers accepted by the Minister.

– 90% of all other responses accepted without amendment.

The aim is the provision of a comprehensive service: the capacity to react urgently; the regular evaluation of military policy for effectiveness in achieving required outcomes and timely briefings on significant issues; and support for the Minister as required in Cabinet Committees, Select Committees and in the House.

Targets Performance AchievedQuantity:

The number of occasions that the Minister will seek advice, or the CDF feels the need to offer it, will depend on a range of external and internal factors beyond the control of the NZDF.

The anticipated range of key written submissions includes:

– Statutory Reports to Parliament: 2

– Submissions to Cabinet: 20–30

– Reports and Briefing Papers: 250–300

– Ministerial Correspondence: 450–550

– Parliamentary Questions: 350–500

– Select Committee Reports: 5–10

– Select Committee (FADT and F&E) Questions: 200–300

– Oral Briefs: Numerous

2

24

437

364

335

No separate reports were required

478

NumerousIntelligence products will include an Annual Strategic Assessment, Quarterly Strategic Intelligence Survey, routine Intelligence Estimates and Summaries and regular briefings. Military Intelligence Notes, Indications and Warning Notices, and special briefings will be provided as necessary when new situations develop. In addition, the NZDF seconds intelligence personnel to various Government agencies.

Annual Strategic Assessment 1

Biweekly Intelligence Summaries 51

Contributions to National Assessment Papers 75

Contributions to Foreign Intelligence Requirements Committee Papers 6

Intelligence Notes/Reports 3

Military Threat Assessments 20

Periodic Intelligence Summaries 90

Security Surveys 4

Security Inspections 4

Security Threat Assessments 11

Southern Oceans Fisheries 13

Numerous on–demand oral briefs and debriefs were conducted during the year.

One Intelligence Analyst was seconded to the Combined Threat Assessment Group during the reporting period.

Quality:All reports and oral advice will be delivered within the agreed or statutory time frame.

75% of draft replies to Parliamentary Questions were provided within five working days of receipt. 68% of draft replies to Ministerial Correspondence were provided within 20 working days of receipt. The reasons for this were the requirement to allocate existing personnel resources to higher priority tasks and a shortage of key staff.

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Targets Performance AchievedThe aim of the advice will be clearly stated and it will answer the questions set; the assumptions behind the advice will be explicit and the argument logical and supported by the facts; the facts provided will be accurate and all material facts will be included; an adequate range of options will be presented and the benefits, costs and consequences of each option to the Government will be assessed; other Government agencies and affected parties will be consulted and possible objections to proposals will be identified; and the problems of implementation, technical feasibility, timing and consistency with other policies will have been considered.

All advice provided options considered with the preferred option as a recommendation. Full consultation took place with all parties and details of the preferred option were consistent with Government policies.

The format will meet Cabinet Office requirements; the material will be effectively, concisely and clearly presented and will be free of spelling or grammatical errors; replies within 20 days of request, if not otherwise specified; and intelligence documents will follow agreed international formats.

Formats generally complied with Cabinet Office requirements and were only re–presented when subsequent information was provided by other departments after Ministerial consultation had taken place.

95% of the first drafts of all policy papers accepted by the Minister.

98% of first drafts were accepted by the Minister.

90% of all other responses accepted without amendment.

96% of all responses were accepted without substantive amendment.

Costs for Output Class 1 (GST Exclusive)

Actual 2003/04

($ million) Category

Main Estimates ($ million)

Supplementary Estimates ($ million)

Actual 2004/05

($ million)

Expenditure6.399 Personnel 6.198 8.879 7.2862.119 Operating 2.595 2.249 2.2580.140 Depreciation 0.124 0.143 0.1590.160 Capital Charge 0.161 0.181 0.1818.818 Total Expenses 9.078 11.452 9.884

Revenue8.732 Revenue Crown 9.026 11.207 9.7840.052 Revenue Other 0.052 0.245 0.0538.784 Total Revenue 9.078 11.452 9.837

(0.034) Net Surplus (Deficit) – – (0.047)

Cost by Output4.557 Output 1.1 4.425 6.499 4.9031.971 Output 1.2 1.765 2.184 2.2580.936 Output 1.3 1.058 1.011 0.9921.354 Output 1.4 1.830 1.758 1.731

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Output Class 2: Naval Combat Forces


Provide Naval Combat Forces prepared for the conduct of maritime operations under Employment Contexts 1, 2, 3, 4, and 5.

Contribute to a range of services in support of other government departments, the community, and foreign and defence policy objectives when not committed to operations, using the capabilities developed for the operational role.

Overview

At the start of the financial year the Naval Combat Force (NCF) comprised two ANZAC Class Frigates (HMNZS TE KAHA and TE MANA), one Leander Class Frigate (HMNZS CANTERBURY), and five SH–2G Super Seasprite helicopters. CANTERBURY was decommissioned in March 2005.

These ANZACS, with embarked helicopters, are able to operate in New Zealand and around the world. They have a wide range of combat capabilities and communications capacity that enable them to participate in multi–national coalitions and up to the ‘high end’ of the spectrum of operations1.

The principal role of the ANZACs is to conduct military tasks, in support of the Government’s regional and international security objectives. They are able to contribute to the protection of New Zealand/Australian territorial sovereignty, to participate in Five Power Defence Arrangement (FPDA) activities, support defence diplomacy objectives with regional partners, and undertake operations in the Asia–Pacific region and beyond.

CANTERBURY was the principal provider of the Navy’s sea training capability and provided support to defence diplomacy objectives in the South Pacific; as well as supporting the work for a range of Government agencies within the NZ EEZ and South Pacific.

A project has been included within the Long Term Development Plan (LTDP) to ensure that the ANZAC frigates’ self–defence systems retain a credible capability into the future.

Highlights at a Glance

Operation Enduring Freedom. As part of New Zealand’s contribution to Operation Enduring Freedom (OEF), the global war on terror, and under the continuing NZ Operation Ariki; TE MANA was deployed to the Middle East from 7 April until 28 August 2004. The primary purpose of the deployments was for the ship to participate in Maritime Interception Operations (MIO) within the Gulf of Oman and South Arabian Gulf. These Operations are intended to restrict the ability of Al Qaeda and Taleban terrorist forces or their supporters use of the sea for their purposes.

Prime Minister’s Tour of Tokelau. HMNZS TE KAHA was able to support the Prime Ministers visit to Tokelau, visiting the remote atolls of Atafu, Nukunono and Fakaofu. This was the first visit to Tokelau by a New Zealand Prime Minister since David Lange’s visit in 1985, and only the third by a New Zealand Prime Minister.

1 The ‘high end’ of the spectrum of operations includes combat operations.

Above: HMNZS Te Mana in Vladivostok alongside a Russian cruiser

Below: Seasprite helicopters on display

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Performance

Performance measurement for this Output Class is in accordance with the standard measures for operational force outputs shown earlier in this Section.


Two frigates with embarked helicopter available for military tasks. One frigate to be available for regional or collective security tasks, and the second frigate to be available to deal with low–level security challenges in New Zealand or South Pacific waters.

Two frigates were available, with embarked SH–2G Super Seasprite helicopters, throughout the reporting period for regional or collective security tasks.

A third frigate with embarked helicopter to be available, given longer preparation time.

This requirement ceased with the decommissioning of HMNZS CANTERBURY in the last quarter of 2004/05.

A third frigate was available until 31 Mar 05 when CANTERBURY decommissioned. Due to the shortages of Aircrew and a higher priority being given to the training of replacement Aircrew an SH–2G Super Seasprite was not embarked in CANTERBURY continuously throughout the period.

Crews at manning levels as specified in the RNZN Funded Personnel Level.

Shortages in key positions and branches particularly Aircrew, Bridge Watch–keeping and Warfare Officers, technicians and some Operations Branch personnel, continue to provide challenges in manning the Naval Combat Force (NCF). The high operational tempo has necessitated careful HR management to keep the NCF fully mission capable; albeit only manned to an average of 93% of the established personnel level. The priority afforded to the ships has meant that shore posts are manned to around 70–80% of the established level.

Because manning the operationally deployed ANZAC Class frigates has been the priority, CANTERBURY (until her decommissioning on 31 Mar 05) carried the greatest personnel risks (predominantly in the areas of Operations and Weapons Engineering).

The number of trained Helicopter Air Controllers and Flight Deck Officers still remains lower than required. However, remedial plans have started to redress the shortages.

Equipment types and numbers as specified in the Master Equipment Index and the Consolidated Onboard Stores Listing (COSAL).

Current equipment and stores support is being maintained as specified in the Master Equipment Index and COSAL and is suitable for the tasks conducted. Equipment obsolescence is being addressed as an integral part of the Long Term Development Plan (LTDP) and the NZDF Capital programme. There is some operational and logistic risk being carried across the ANZAC Class. However, plans are in place to mitigate these risks.

The equipment types and availability of stores support did not preclude the Naval Combat forces from achieving the required operational outputs.

Readiness:Frigates that meet the DLOC readiness criteria in accordance with Schedule 4 to the NZDF Output Plan

DLOC criteria were met until 31 March 05 when CANTERBURY decommissioned. For the remainder of the financial year TE KAHA and TE MANA shared the DLOC requirement responsibilities.

Frigates carry out a range of training activities in accordance with the NZDF MAS, and the NZBR 99–RNZN Operational Sea Training Instructions to achieve DLOC for designated Navy METLs.

The continuing commitment to MIO operations in the Middle East allowed TE MANA to maintain OLOC until the third quarter of the financial year. The Maritime Operational Evaluation Team (MOET) coordinated and assessed all DLOC and OLOC training with the two ANZAC Class frigates and confirmed the ships were at the required Level of Capability during the year.

CANTERBURY maintained a level of training consistent with her allocated DLOC. This was validated by MOET during the year.

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Targets Performance AchievedTo conduct DLOC Readiness training and Combat Viability exercises, planned sea–days are:

– HMNZS TE KAHA will spend 140 to 150 days at sea

– HMNZS TE MANA will spend 135 to 145 days at sea

– HMNZS CANTERBURY will spend 138 to 148 days at sea until decommissioning.

HMNZS TE KAHA achieved 132 sea days.

The slight decrease in actual sea days achieved was attributable to propulsion diesel engine defects.

TE KAHA commenced the year with a Defence Diplomacy visit to the Tokelau’s in support of the Prime Minister’s visit to the atolls and Key Priority 4. The ship subsequently deployed to Singapore via Cairns and Darwin for the FPDA exercise BERSAMA LIMA (BL04). This joint and combined exercise provided valuable DLOC generation opportunities and significantly improved interoperability between the Five Power nations; Australia, Malaysia, New Zealand, Singapore and the United Kingdom.

Following this exercise TE KAHA conducted Defence Diplomacy visits to Thailand, Vietnam, Hong Kong and the Philippines. During this phase of the deployment the rare opportunity to conduct a PASSEX with the Royal Thai Navy en route to Manila was taken.

TE KAHA concluded the deployment with the bilateral anti–submarine warfare training exercise ASWEX and support to the RAN Principal Warfare Officer (PWO) course in the West Australian Exercise Areas (WAXA). Provision of support to the PWO course provides a funding offset for RNZN students undergoing training in Australia.

In early 05 TE KAHA participated in the bilateral exercises OCEAN PROTECTOR and TASMANEX. Both these exercises provided significant opportunities for DLOC generation and improved interoperability with the RAN.

TE KAHA commenced a scheduled maintenance period for the remainder of the financial year.

HMNZS TE MANA achieved 154 sea days.

The slightly higher than planned sea days figure was due to the ship’s Output 16 tasking for Operation Ariki and a requirement to conduct additional DLOC training in support of the RNZN’s GAP training initiative.

TE MANA arrived back in NZ from MIO operations during early September 04. The ship then started a scheduled maintenance period and sea trials prior to a regeneration period alongside in Auckland.

In early 05 TE MANA participated in the bilateral exercises OCEAN PROTECTOR and TASMANEX. Both these exercises provided significant opportunities for DLOC generation and improved interoperability with the RAN. Following a short maintenance period TE MANA deployed to South East Asia to participate in FPDA exercises and conducted Defence Diplomacy visits to China, Malaysia, Russia and Japan. During the deployment there were three “firsts” a bi–lateral exercise with Malaysia, an exercise with the PLA(N) and the visit to Russia.

HMNZS CANTERBURY achieved 89 sea days.

Unexpected defects and early decommissioning resulted in CANTERBURY conducting fewer sea days than planned.

CANTERBURY began the year in scheduled maintenance, completing sea trials before passage to Australia for DLOC generation activities and support

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Targets Performance Achievedto two RAN ship Unit Readiness Evaluations (UREs). The ship then provided support to Ministry of Fisheries and NZ Customs during a series of EEZ patrols completing the calendar year with DLOC training in Australia and New Zealand. CANTERBURY then deployed to Australia for the bilateral exercise OCEAN PROTECTOR and TASMANEX in company with the ANZAC frigates and a number of RAN ships.

These exercises provided significant DLOC training opportunities prior to CANTERBURY’s decommissioning at the end of March 05.

The Seasprite helicopters will be under operational control of the RNZN (Maritime Component Commander) when embarked.

Planned total Seasprite flying hours are:

– For flying while embarked with the Naval Combat Force or any maritime force – a total of about 745 hours (target range 700–780 hours)

– For shore–based DLOC readiness training – a total of about 792 hours (target range 750–840 hours).

Seasprite helicopters flew a total of 378.7 hours in support of embarked operations, and 491.9 hours in support of shore–based readiness training. The hours flown were significantly reduced from those planned as a result of:

– critical shortages in aircrew availability preventing a SH–2G from embarking in CANTERBURY for much of the period;

– a reduction in shore–based flying as a result of reduced aircrew numbers; and

– SH–2G serviceability issues with the manufacturer that reduced the availability of shore–based helicopters.

Combat Viability:Crews that meet the collective training standards, experience levels and qualification requirements for military tasks.

The required standard for continuation training in core competencies has been met; although the nature of OEF MIO tasking resulted in reduced training opportunities for, particularly, the higher–level combat capabilities.

Equipment performance, reliability and technology that meet required standards for commitment to military tasks.

The previously reported outstanding magnetic signature treatment for TE MANA is programmed in FY 05/06.

Further progress in C4I technologies has been accelerated by the New Zealand hosted exercise TASMANEX 05. This saw an improvement in command and control functions within the bilateral community and increased interoperability with the RAN.

The SH–2G Seasprite has effectively proved its range of capabilities, particularly in night operations, and during embarked operations generally.

Spares support from the manufacturer, particularly composite main rotor blades, have had a significant impact on the provision of helicopters for embarkation and shore–based training.

The current Ship Helicopter Operating Limits (SHOL) are having a significant negative impact on embarked flying operations. Plans are being developed to resolve the operational limitations this has created.

Effective standardisation when working with friendly forces.

Standardisation has been proven in multi–national operations in the Middle East and during regional exercises. There are some areas of tactical communications interoperability with the RAN that require improvement.

Deployability:Frigates capable of generating OLOC within designated response times, as specified in Schedule 4 to the NZDF Output Plan.

During the reporting period TE MANA remained at OLOC for OEF MIO until the programmed regeneration period during the third quarter of the FY. TE KAHA was capable of generating OLOC.

Expendable and technical stores available, and munitions, as specified in the Warrant of Armament Stores.

No major difficulties with the availability of munitions for the generation of OLOC have been experienced.

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Targets Performance AchievedSustainability:

Munitions, expendable and technical stores available, as specified in the Warrant of Armament Stores and to maintain OLOC for the designated operational period.

Whilst there are some risks with respect to the sustainability of the NZDF munitions, the current levels of munitions enabled the Naval Combat forces to achieve the required operational outputs.

Personnel available for sustainment / rotation of crews.

The training system continues to produce sufficient replacement personnel to sustain the frigates on–task, although the capacity to sustain this is fragile in some key areas and has severely impacted on some important support functions ashore.

Contribution to Services Provided to Government and the Community

A consolidated NZDF summary of the availability to provide services to the government and community, and of services provided during the year, is shown at the end of this Section.


Actual 2003/04




Actual 2004/05

($ million)


Revenue494.574 Revenue Crown 475.445 496.132 484.309

1.682 Revenue Other 2.572 2.727 2.449496.256 Total Revenue 478.017 498.859 486.758(6.455) Net Surplus (Deficit) – – 3.770

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Output Class 3: Naval Support Forces


Provide a Replenishment Ship prepared for the conduct of maritime logistic support operations under Employment Contexts 1, 2, 3, 4, and 5.

Prove Military Sea–lift capability when required by charter until the Multi–Role Vessel (MRV) procured under Project Protector is in service in 2007.

Undertake Multi–Agency Operations and Tasks (MAO&T), contribute to a range of services in support to other government departments, the community, and foreign and defence policy objectives when not committed to operations, using the capabilities developed for the operational roles.

Overview

Until the arrival of the MRV purchased under Project Protector in financial year 06/07, the Naval Support Force (NSF) consists of the replenishment tanker, HMNZS ENDEAVOUR. The ship’s primary role is to provide fuel at sea to the RNZN frigates or other allied Naval ships. It is also capable of providing a degree of other logistics support such as food and stores.

The unique nature of the ship’s main engine has made it necessary to conduct a series of engine trials in consultation with the contractor throughout the year in an attempt to resolve the main machinery defects that have plagued the ship’s operational availability. These efforts have been successful and it is expected that ENDEAVOUR will see out her service in the RNZN with only the normal maintenance anticipated for a marine engine. As a result of the lifeboat accident in Sydney in August 04 a new lifeboat has been installed on the ship.


Support to operations. In addition to supporting the separate deployments of HMNZS TE KAHA and HMNZS TE MANA to Asia, HMNZS ENDEAVOUR has provided support for two major combined exercises in Australian and New Zealand waters (Ex Ocean Protector and TASMANEX) as well as two Five Power Defence Arrangements (FPDA) exercises in the South China Sea, namely, exercises BESAMA LIMA 04 and BERSAMA SHIELD 05. During BESAMA LIMA, HMNZS ENDEAVOUR replenished 1000 tonnes of fuel to participating units.

Support to Defence Diplomacy. During the reporting period HMNZS ENDEAVOUR deployed to Asia and conducted Defence Diplomacy visits to; Australia, Singapore, Thailand, Vietnam, Hong Kong, Philippines, Japan, Russia and China. Throughout the deployment the ship was in company with HMNZS TE MANA to which it provided fuel and logistics support.

Above: HMNZS Endeavour refuels HMNZS Te Mana with HMAS Parramatta in the background

Below: A view from HMNZS Endeavour

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Performance



HMNZS ENDEAVOUR available for military tasks. With the exception of a period after the lifeboat accident in August 04, the ship was available to support all planned military tasks throughout the reporting period.

Crew at manning levels as specified in the RNZN Funded Personnel Level.

ENDEAVOUR was manned to the Funded Personnel Level consistent with the ship’s employment throughout the period.


Provision of equipment and spares has been in accordance with the prescribed scale of supply suitable to achieve readiness targets.

Readiness: Replenishment Ship that meets DLOC readiness criteria in accordance with Schedule 4 to the NZDF Output Plan.

ENDEAVOUR’s DLOC readiness was confirmed through an evaluation by the MOET in Feb 05 and the high level of exercise participation and time accompanying ships has ensured this level has been maintained for the whole reporting period.

Ship carries out a range of training activities in accordance with the NZDF MAS, and the New Zealand Book of Reference (NZBR) 99 – RNZN Operational Sea Training Instructions – to achieve DLOC for designated Navy METLs.

ENDEAVOUR was able to maintain DLOC status throughout the reporting period having been assessed by MOET staff and participating in a number of major warfare exercises, providing support for two major combined exercises in Australian and New Zealand waters (OCEAN PROTECTOR and TASMANEX) as well as two Five Power Defence Arrangements (FPDA) exercises, BESAMA LIMA 04 and BERSAMA SHIELD 05, in the South China Sea.

To conduct DLOC Readiness training and Combat Viability exercises, planned days at sea for HMNZS ENDEAVOUR will be 175 to 185 days.

The ship spent 180 days at sea of which 153 were in company or on exercise.

Combat Viability:Crew that meet the collective training standards, experience levels and qualification requirements for military tasks.

Whilst at sea, ENDEAVOUR has been manned to the required capacity but levels of training and experience have varied.


ENDEAVOUR’s performance during the year has improved markedly over that in recent years. Confidence in the reliability of the main engine is restored due to many of the issues regarding high levels of main engine lubrication, oil consumption and turbo charger performance having been rectified by implementing a series of modifications.


Standardisation was achieved and verified by external agencies in exercises with RAN units. Communications interoperability with Allied and national forces has provided some areas for improvement. Plans are in place to have this addressed.

Deployability:Replenishment Ship capable of generating OLOC within designated response time as specified in Schedule 4 to the NZDF Output Plan.

OLOC generation was possible throughout the reporting period.

Expendable and technical stores available to generate OLOC, and munitions as specified in the Warrant of Armament Stores.

The ship maintained a full munitions and technical stores scale of allowance throughout the reporting period. There were no OLOC stores related shortfalls.

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Targets Performance Achieved Sustainability:

Munitions, expendable and technical stores available, as specified in the Warrant of Armament Stores, to maintain OLOC for the designated operational period.

No problems were encountered with the provision of these munitions and stores.

Personnel available for sustainment of Naval logistic support tasks.

The shortfalls in some key personnel areas across the Navy require careful management to ensure that sustainment issues are catered for in priority order.




Actual 2003/04




Actual 2004/05

($ million)

Expenditure9.014 Personnel 8.906 9.079 9.176 8.054 Operating 8.407 9.692 8.984 3.362 Depreciation 2.965 3.109 3.026 6.758 Capital Charge 6.373 8.040 8.040

27.188 Total Expenses 26.651 29.920 29.226

Revenue 26.689 Revenue Crown 26.440 29.676 29.232

0.139 Revenue Other 0.211 0.244 0.234 26.828 Total Revenue 26.651 29.920 29.466 (0.360) Net Surplus (Deficit) – – 0.240

Cost by Output27.160 Output 3.1 26.626 29.893 29.2000.028 Output 3.2 0.025 0.027 0.026

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Output Class 4: Mine Countermeasures, Diving and Diving Support Forces


Provide Mine Countermeasures (MCM) and Diving Forces prepared for the conduct of MCM operations under Employment Contexts 1, 2, 3, 4 and 5.

Undertake Multi–Agency Operations and Tasks (MAO&T), contribute to a range of services in support of other government departments, the community, and defence policy objectives when not committed to operations, using the capabilities developed for the operational role.


Output 4.1: Mine Countermeasure (MCM) Forces

The provision of Inshore Patrol Craft (IPC) prepared to conduct MCM operations in New Zealand. This output also includes contributions by MCM Forces to other government departments, including MAO&T, and the community.

Output 4.2: Operational Diving Team

The provision of the Operational Diving Team (ODT), including two integral IEDD Teams, prepared to classify and clear mines within surveyed Q–Routes using explosive techniques, and to conduct independent diving tasks – such as clearance diving. This output also includes contributions by Navy Divers to other government departments, including MAO&T, and the community.

Output 4.3: Diving Support Forces

The provision of a MCM Support Vessel HMNZS MANAWANUI prepared to support MCM and diving operations. This output also includes contributions by the MCM Support Vessel to other government departments, including MAO&T, and the community.

Overview

Mine Counter Measures

The MCM Route Survey capability (achieving a picture of bottom topography) has been transitioned from the RNZNVR to the Regular Force and, until the MCM Project reaches maturity in FY 2007/08, will be provided by MANAWANUI, using the containerised MCAIS system, and KIWI. The procurement of Autonomous Underwater Vehicle (AUV) technology is being investigated in conjunction with the Defence Technology Agency (DTA), with a view to augmenting the current MCAIS system and providing a key element of the Navy’s future MCM capability. MCM Route Conditioning (identifying and removing ‘mine–like’ objects) will continue to be conducted by the ODT using a Remotely Operated Vehicle (ROV) and divers.

Operation MANTA III 04 – 29 October 2004. The search for the sunken fishing vessel IRON MAIDEN was conducted from MANAWANUI over a three week period in the vicinity of Pandora Banks.

Above: Deploying a Remotely Operated Vehicle from the deck of HMNZS Manawanui during the search for the wreck of the Iron Maiden

Below: HMNZS Manawanui crew train Ministry of Fisheries personnel in sea survival skills prior to an operation

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The RNZNVR provided qualified MCM Supervisors to assist in the search whilst the ODT embarked with the Remotely Operated Vehicle (ROV). The sunken vessel was located in 43m of water approximately 2NM south of Pandora Banks.

Operation NIAGARA 1/05 – 21 Mar – 8 Apr 05. MCM and ODT elements embarked in MANAWANUI with the MCM Container and ROV equipment to conduct Q Route conditioning operations in the vicinity of Whangarei and Auckland. A total of 80 contacts were investigated and a great deal of information gathered to populate the MCM database.

Diving

The RNZN divers have a range of capabilities that allow them to perform a variety of tasks in both the land and maritime environments. (During the reporting period a member of the ODT was deployed to Afghanistan to assist with the conduct of Explosives Ordnance Disposal – EOD) While the ODT primary role is in MCM operations, their diving skills make them available to contribute to a number of other operational activities, such as obstacle clearance, both in New Zealand and overseas, and tasks for other Government departments to a maximum depth of 90m. Navy divers also continue to contribute to the NZDF IEDD response.

MANAWANUI is the primary diving support platform and is capable of multi–point mooring, to keep it directly over the diving area. It carries a diving bell and a recompression chamber and is capable of supporting MCM and other diving operations in New Zealand and overseas.

During the period MANAWANUI has:

– deployed for EXERCISE TASMANEX 05 in conjunction with HMNZS RESOLUTION conducting Advance Force Operations, and

– deployed for OPERATION MANTA 111(search for fishing vessel IRON MAIDEN)

HMNZS KAHU is the standby Diving Support vessel. It has less capability, but can carry a portable recompression chamber. It is capable of supporting MCM and other diving operations only in New Zealand.

Performance



Diving Support Vessel (MANAWANUI), four Inshore Patrol Craft (HMNZ Ships MOA, KIWI, WAKAKURA, and HINAU) and an Operational Diving Team available for military tasks.

All listed Force Elements were available for military tasks.

Crews and Diving Team at manning levels as specified in the RNZN Funded Personnel Level.

The ODT remained below the RNZN Funded Personnel Level and it is currently at 62% of established levels and only one of the two teams is manned. However, some progress is being made in addressing the shortfall.

The RNZNVR units continue to be under strength and have frequently needed to draw personnel from across VR units to complete assigned tasks.


With the exception of KIWI, all the IPCs have had the MCAIS equipment removed and returned to the Naval Supply Depot (NSD) in Auckland where they are stored to support the MCM capability being retained within the MCM container and KIWI.

A MCM mission capable ROV has been purchased and currently under acceptance trials.

The SIVA 55 Clearance Diving Breathing Apparatus is at the end of its effective life and is being replaced.

Readiness:IPC, Diving Support vessels and Operational Diving Team that meet specified DLOC readiness criteria in accordance with Schedule 4 to the NZDF Output Plan.

The Diving Support Vessel and IPC have been maintained at DLOC.

Due to personnel shortages, one of the two Diving Teams did not achieve DLOC during the reporting period. However, ODT manning is projected to increase.

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Targets Performance AchievedIPC, Diving Support vessel and Operational Diving Team carry out a range of training activities in accordance with Navy METLs and the NZ Book of Reference (NZBR) 99–RNZN Operational Sea Training Instructions.

Training activities were conducted in accordance with NZBR 99.

The five IPC’s conducted a squadron exercise (SQUADEX) during the period. This exercise was sponsored by MCC JFNZ and DLOC capability was evaluated by the MOET and IPC readiness to conduct MAO&T was verified.

The planned acquisition of a Versatile Exercise Mine (VEM) or Diver Evaluation Unit (DEU) will allow a more complete evaluation of ODT personnel and equipment capabilities and training effectiveness.

To conduct DLOC Readiness training and Combat Viability exercises:

– HMNZS MANAWANUI will spend 127 to 137 days at sea.

– Inshore Patrol Craft will spend a total of 325 to 335 days at sea.

– HMNZS KAHU will spend 100 to 120 days at sea.

MANAWANUI spent 133 days at sea.

The IPC’s spent a total of 332 days at sea.

HMNZS KAHU spent 129 days at sea.

– The Diving Team will spend approximately 360 hours (target range 340–380 hours) on operational dive training, including a Heliox work–up, and MCM readiness training in diving techniques for the disposal of mines and other explosive devices.

The Diving team conducted 337.5 hours dive training. The reason for the slight under achievement in diving hours was the lack of divers.

Combat Viability:Ships’ crews and Diving Team that meet the collective training standards, experience levels and qualification requirements for military tasks.

The removal of the MCM function from all but one of the IPCs will dilute the MCM capability across the RNZNVR in general. However, there will be sufficient trained strength at MCAIS supervisor level to undertake all MCM tasks until MCAIS activities are replaced. KIWI will conduct continuation training on the MCM associated equipment to prevent skill fade.

All RNZNVR Units, MANAWANUI and the ODT met the required collective training standards.

The Royal Navy Diving Standards unit conducted an external audit on the ODT in April 05. This highlighted a number of areas for improvement.

The ODT and RNZNVR personnel shortfalls have meant the pool of trained personnel available for operational tasking is lower than is desirable.


The MCAIS equipment is in a fragile state and concerns regarding it’s availability, reliability and maintainability (ARM) are recognised. These concerns are being addressed both in the medium and longer term through the NZDF capability acquisition process.


This was most recently tested during Exercise BERSAMA LIMA in Singapore (Sep 2004) and during the Royal Navy Diving Standards Advisory evaluation conducted in April 05. The MCM Project has generated several opportunities to engage in MCM related activities during 2005/06 such as The Technical Co–operation Programme (TTCP) MAR 13 discussions, the Rapid Environmental Assessment Workshop and the Battlefield Experiment KERNEL BLITZ 07. Standardisation with friendly forces continues to be developed.

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Targets Performance AchievedDeployability:

Ships and Diving Team capable of generating OLOC within designated response time in accordance with Schedule 4 to the NZDF Output Plan.

No MCM force elements were required to generate OLOC during the reporting period. The personnel shortages and equipment deficiencies outlined above would have made concurrent full OLOC generation for all MCM Force Elements unachievable. With allied support, OLOC generation for some Force Elements would be feasible.

Expendable and technical stores available to generate OLOC, and munitions as specified in the Warrant of Armament Stores.

With the exception of difficult to source stores for the MCM computer system, sufficient stocks were available.

Sustainability:Expendable and technical stores available, and munitions, as specified in the Warrant of Armament Stores, to maintain OLOC for the designated operational period.

Sufficient stocks were available during the reporting period. However, the reliability of the MCAIS and the ability to source spares for it leaves the system vulnerable to extended unavailability. This vulnerability will, however, be reduced with the pooling of spares removed from three of the IPC’s.

Personnel available for sustainment of crews and Diving Team.

The ODT is currently at 62% manning.

RNZNVR units are now only required to man HMNZS KIWI, and an increased tempo of operational capability is anticipated.


The following services have been provided to Government and the Community:

– Defence Technology Agency support 6 days

– Community 13 days

– Multi – Agency operations 131 days1


Actual 2003/04




Actual 2004/05

($ million)

Expenditure12.988 Personnel 12.729 12.674 13.385

8.941 Operating 10.391 10.324 10.0463.721 Depreciation 3.196 3.363 3.1884.903 Capital Charge 4.606 4.301 4.301

30.553 Total Expenses 30.922 30.662 30.920




12.698 Output 4.3 13.320 12.549 12.482

1 This includes 12 days in support of the Transport Accident Authority

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Output Class 6: Hydrographic Data Collection and Processing for LINZ and Third Parties


Provide the Hydrographic and Oceanographic Survey Ship and infrastructure prepared for hydrographic data collection and processing in accordance with contractual arrangements with Land Information New Zealand (LINZ) and third parties.

Additionally, Multi–Agency Operations and Tasks (MAO&T) and support to other government departments and defence policy objectives when not committed to LINZ operations.

Overview

HMNZS RESOLUTION is an ocean–going offshore survey vessel, capable of operating across the NZ EEZ, from the Ross Sea to the Pacific Islands and is the main hydrographic data collector for the RNZN. Hydrographic survey work is also undertaken in the inshore areas by the Survey Motorboat (SMB) ADVENTURE as required. Hydrographic data is processed either onboard or ashore with some assistance provided by the Joint Geospatial Support Facility (JGSF) to meet the contractual requirements of LINZ. Additionally, some RESOLUTION sea time is made available to the Defence Technology Agency (DTA) to advance oceanographic research on behalf of the NZDF and a significant portion of sea time is allocated to supporting RNZN training, including the provision of a military hydrography capability.

The JGSF provides geospatial intelligence and products to support NZDF planning for military operations at all levels of command within the NZDF. Its products range from marine, topographical and aviation maps and charts, to sophisticated 3D digital models.

The contracted 110 days have been undertaken in accordance with the LINZ MOU for RESOLUTION services.


LINZ Northern Shipping Lanes Hydrographic Survey. This extensive survey commenced in 1999 and was completed in October 2004. In total, over 21,000 nautical miles of sounding data was collected, taking 542 LINZ sea days, representing the largest single survey undertaken by the RNZN in the last 30 years.

Exercise TASMANEX 05 14 – 24 February 2005. RESOLUTION conducted combined Advance Force Operations incorporating military hydrography and geospatial support in conjunction with HMNZS MANAWANUI and HMAS MELVILLE, a specialist Royal Australian Navy hydrographic vessel.

Operation Calypso – South Pacific Deployment – 11 Apr – 28 May 05. RESOLUTION visited 6 Pacific Island countries in this 6–week Defence Diplomacy deployment, delivering humanitarian aid to cyclone–hit areas including Niue and the Northern Cook Islands. SMB ADVENTURE and geospatial detachment was landed in Samoa to conduct military hydrographic training during the deployment.

Above: A hydrographic survey boat on in-shore operations

Below: HMNZS Resolution

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Performance

Output performance of the delivery of the hydrographic capability is measured by the achievement of contract requirements for Hydrographic Survey to the satisfaction of the requesting organisation, and the delivery of hydrographic data that meets international standards. Measurement includes quality feedback from recipients, and completion of the contracted Hydrographic programme for LINZ and third parties.


RESOLUTION available for LINZ and third party hydrographic tasks under contract.

RESOLUTION spent 107 days at sea on hydrographic tasks for LINZ. This meets the requirement of the Memorandum of Understanding (MOU) with LINZ (when carrying over excess LINZ days from the previous year).

The Hydrographic Business Unit (Joint Geo Spatial Support Facility (JGSF) was available to support the collection and processing programmes.

Throughout the year, the JGSF provided the required support to meet LINZ MOU and third party requirements for RESOLUTION and ADVENTURE.

Crew at manning levels as specified in the RNZN Funded Personnel Level.

Shortfalls in manning levels encountered last financial year in the areas of qualified Survey Officers for RESOLUTION, and Leading Hydrographic Survey Technicians are still below required levels. These shortfalls also effect the manning of ADVENTURE and its availability for survey tasks.

Equipment types and numbers required to meet contractual commitments and as specified in the Master Equipment Index and the Consolidated Onboard Stores Listing (COSAL).

Equipment status met requirements for contractual commitments. However, an increase in maintenance of some key hydrographic equipment is becoming evident as this equipment ages.

HMNZS RESOLUTION will spend approximately 130 days at sea on hydrographic tasks for LINZ. HMNZS RESOLUTION will also spend approximately 44 days at sea on Navy support tasks and 34 days at sea in support of Defence Technology Agency (DTA) tasks.

RESOLUTION spent 198 days at sea, 107 days of which were in support of the LINZ Contract. The balance (91 days) were spent on Navy support tasks and tasks in support of the DTA.

During sea time under contract to LINZ the hydrographic vessels will maintain sea operational efficiency.

Training to maintain operational effectiveness was achieved in accordance with New Zealand Book of Reference (NZBR) 99.

Quality:Ship meets readiness and sustainment standards in accordance with LINZ and any other contract requirements. In addition the ship will report a military LOC to reflect the ability of the ship to contribute to NZ and South Pacific ECs.

Readiness and sustainment standards were achieved in accordance with contract requirements.

Crew that meets the collective training standards, experience levels and qualification requirements for the tasks.

Personnel met the collective training standards, experience levels and qualification requirements for the tasks. This was partly achieved by external training courses.

Equipment performance and reliability that meet required standards for commitment to tasks.

Equipment performance and reliability was suitable to achieve all task commitments.

Replacement personnel available for the sustainment of programmes.

Insufficient replacement personnel were available to fill established Senior Hydrographic Technician positions on RESOLUTION. The requirement to replace these personnel will have a direct impact on outputs from ADVENTURE, important Naval Support functions, or possibly other Output Classes.

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Actual 2003/04




Actual 2004/05

($ million)


Revenue0.230 Revenue Crown 0.171 1.342 1.3426.974 Revenue Other 6.789 6.520 6.3987.204 Total Revenue 6.960 7.862 7.740

(0.589) Net Surplus (Deficit) – – 0.120

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Output Class 7: Land Combat Forces


Provide land combat forces (command, control and intelligence, and infantry, armoured, and reconnaissance force elements) prepared for the conduct of land operations under Employment Contexts 1, 2, 3, 4 & 5.



Output 7.1: Command, Control and Intelligence

The provision of a deployable headquarters prepared to provide operational command, control and intelligence for deployed land forces and for formation training in New Zealand. This output also provides command of contributions, as required, to a range of services provided to the Government and the community.

Output 7.2: Manoeuvre Elements

The provision of manoeuvre elements (infantry and reconnaissance) prepared for the conduct of land combat operations. It includes the provision of these elements for a force of up to infantry battalion group size. It also includes the requirement to maintain the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Overview

The Land Combat Forces are based on two light Infantry Battalions (1 RNZIR and 2/1 RNZIR) and a Reconnaissance Squadron (Queen Alexandra’s Squadron (QA Sqn), equipped with MII3 APCs1). The Territorial Force provides additional capability for reinforcement and rotation of these Regular Force units.

The priority of effort for 1RNZIR has been the introduction and integration of the New Zealand Light Armoured Vehicles (NZLAV). 2/1 RNZIR has focused on supporting current operational commitments and the maintenance of light infantry capabilities. QA Sqn has the role of maintaining armoured vehicle crew skills as part of the introduction into service of new vehicles and developing a mounted reconnaissance capability.

The Land Combat Forces have commenced a significant transformation that will continue over the coming years as the Army modernises. This modernisation will enhance the mobility, firepower and protection necessary for combat or peace support operations.

Projects in the Long Term Development Plan that relate to the Land Combat Force include, the Medium Range Anti–Armour Weapon, Direct Fire Support Weapon and the Land intelligence, surveillance and reconnaissance capability.

1 Until Nov 05

Above: NZ Army infantry personnel during a training exercise

Below: A NZ Army Light Armoured Vehicle

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Performance



Army, drawing on HQ 2 LFG, HQ 3 LFG, 1 RNZIR, 2/1 RNZIR, QAMR and intelligence elements, and with supplementation from the TF Regiments, as required, will provide the initial and rotation land combat force elements to constitute:

– An Infantry Company Group (motorised or non–motorised) for tasks under ECs 1 and 2

– Up to an Infantry Battalion Group (motorised or non–motorised) for tasks under ECs 2 – 5 (inclusive)

– Sub–unit elements as options for independent contribution to a combined force

– An appropriate headquarters (including intelligence and communications support) for command and control of a deployed force

An Infantry Company Group was substantially prepared for concurrent tasks under ECs 1 and 2, while the Land Combat Forces continued to support UN and other coalition operations around the world.

A composite infantry battalion was prepared to meet lower – end operational spectrum contingencies. Battalion Group responses for ECs 3 – 5 could not be fully met without significant risk.

Selected Sub–unit elements are available to provide independent contributions to a combined force but this is at a cost to modernisation and re–equipping.

An appropriate headquarters can be provided noting that projects on the LTDP will enhance this capability.

Army will also provide an appropriate Brigade – level headquarters, and the framework for an Infantry Brigade Group for combined–arms training. The framework for an Infantry Brigade Group requires supplementation by TF Regiments.

Army remained substantially prepared to provide a contribution to a National Command Element. HQ 2 LFG is capable of providing an appropriate headquarters and the framework of a light infantry brigade group for training. However, it would need significant equipment support from other HQ NZDF resources.

Elements contributing to the above forces available at manning levels as specified in Army Tables of Organisation and Equipment (TOE).

Most units are staffed at below 80% of establishment. Ongoing composite deployments continue to highlight the shortages of infantry personnel and equipment available for rotation.

Readiness:Designated force elements that meet specified readiness criteria in accordance with Schedule 4 to the NZDF Output Plan:

– DLOC for Company and Battalion Group

– BLOC for Brigade Group framework units (TF Regiments)

– Land Combat Forces carry out a range of training activities in accordance with the NZDF Master Activity Schedule (MAS), Army Mission Essential Task Lists (METLs), and Formation and Unit Training Directives. This will include participation in Battalion Group and Formation level exercises.

A Company Group was maintained at DLOC for ECs 1 and 2. The personnel and equipment required for a Battalion Group can only be met for low–level contingencies.

BLOC was sustained for TF units.

The Land Combat Forces conducted a range of training activities, including unit and sub–unit exercises. A number of Brigade–level Command Post Exercises were conducted. These activities highlighted that additional equipment, personnel and training time would be needed to ensure units fully meet DLOC for larger formation activities.

Combat Viability: Personnel that meet the collective training standards, experience levels and qualification requirements for military tasks.

The trained state of the Army force elements is sufficient to meet this target for low–level contingencies.

The collective combined–arms training requirement was unable to be exercised due to the postponement of Exercise Joint Kiwi 05.

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Targets Performance AchievedEquipment performance, reliability and technology that meet required standards for commitment to military tasks.

Army Force Elements were substantially prepared for low–level conflict but not for higher–threat situations under ECs 3–5. Deficiencies in firepower, communications and mobility would impair effectiveness in conventional military operations and the more demanding peace support operations. The introduction of NZLAV, light operational vehicles, communications equipment and direct fire support weapons will address a number of these deficiencies.


Army continues to experience difficulties when working with other coalition forces as a result of degradation in the trained state of Forward Air Controllers for the provision of Close Air Support. This deficiency is being addressed.

Deployability:Force elements capable of generating OLOC within the designated response time, as specified in Schedule 4 to the NZDF Output Plan.

Army force elements were substantially prepared to meet the specified readiness standards for low–level operations.

Munitions, stores and equipment available for OLOC generation, as specified in unit TOE / Contingency Plans (CONPLANS.)

Ongoing equipment refurbishment and replacement requirements have limited the support available for OLOC generation. There remain shortages in a range of protective equipment, tentage, radios and night vision equipment which will begin to be addressed with the commencement of the Defence Sustainability Initiative.

Sustainability:Munitions, expendable and technical stores available, as specified in CONPLANS to maintain OLOC for the designated operational viability period.

Munitions, expendable and technical stores could be provided from within total Army resources.

Personnel available for reinforcement and rotation of deployed forces for continuous operations in accordance with Schedule 4 to the NZDF Output Plan.

The Army would not have been capable of providing all the personnel required for reinforcement and rotation if all force elements had been deployed concurrently.




Actual 2003/04




Actual 2004/05

($ million)

Expenditure110.988 Personnel 110.699 117.505 119.33658.420 Operating 65.264 68.789 67.96317.530 Depreciation 22.027 20.331 29.03922.089 Capital Charge 35.240 35.809 35.809

209.027 Total Expenses 233.230 242.434 252.147



Cost by Output18.233 Output 7.1 19.643 19.446 18.020

190.794 Output 7.2 213.587 222.988 234.127

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Output Class 8: Land Combat Support Forces


Provide land combat support force elements (artillery, engineers and communications, including strategic communications) for the support of land operations under Employment Contexts 1, 2, 3, 4, & 5.



Output 8.1: Artillery

The provision of artillery units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide artillery elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Output 8.2: Engineers

The provision of engineer units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide engineer elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Output 8.3: Communications

The provision of communications units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide communications elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Overview

The Land Combat Support Forces are provided from 16 Field Regiment, 2 Engineer Regiment, 2 Signals Squadron and 3 Signals Squadron, with additional support from the Territorial Force for reinforcement and rotation of these Regular Force units. These forces are integrated with and complement the core infantry forces.

They include artillery and air defence to enable manoeuvre, engineers to enhance mobility and survivability of friendly forces and to obstruct enemy movement, and communications to support command, control and the passage of information.

Above: NZ Army personnel preparing to fire a 105mm Light Gun

Below: NZ Army engineers working on a humanitarian aid task in Iraq

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The priority of effort for 16 Field Regiment over the last year was the maintenance of the artillery fire support capability for conventional combat operations. The priority of effort for engineers and signals personnel was support to UN and other coalition operations. Engineers also deployed to other theatres, including Iraq to assist with humanitarian aid tasks (see Output Class 16 for further details).

The fielding of Communications equipment acquired under the Tactical Mobile Communication System (TMCS) continues to progress. Capability enhancements included in the Long Term Development Plan include the upgrade or replacement of Army Tactical Trunk Communications and acquisition of Army Engineering Equipment to support increased mobility of the motorised Land Combat Force.

Performance



Army, drawing on 2 LFG and 3 LFG Regular Force artillery, engineer and communications units (16 Field Regt, 2 Engineer Regt, 2 Signal Sqn and 3 Signal Sqn, respectively), and with supplementation from the Territorial Force (TF) Regiments, as required, will provide the initial and rotation land combat support force elements to support, as applicable:

– An Infantry Company Group (motorised or non–motorised) for tasks under ECs 1 and 2.

– Up to an Infantry Battalion Group (motorised or non–motorised) for tasks under ECs 2 – 5 (inclusive).

– Sub–unit elements as options for independent contribution to a combined force.

Army was partially prepared to provide the engineer elements and communications required to support an infantry company group for low–level tasks.

An artillery battery (of six guns) was fully prepared to support an infantry battalion group.

The Very Low Level Air Defence Troop remains unable to reach the required level of capability as it is still not fully equipped to integrate effectively on the battlefield with other air defence capabilities. This capability is under procurement action and is expected to be at DLOC by Dec 06.

Engineer elements with limited assets were available for deployment.

Signals assets are partially prepared to support these ECs.

Artillery and limited Engineer elements were available (due to the Engineer deployment to Iraq).

Army will also provide artillery, engineer and communications force elements to support the framework for an Infantry Brigade Group for combined–arms training; this will require supplementation by TF Regiments.

Shortfalls in personnel and equipment would require considerable lead–time to prepare to support a Brigade Group for combined–arms training.

Land Combat Support Force elements contributing to the above forces available at manning levels as specified in Army Tables of Organisation and Equipment (TOE).

Most Land Combat Support units were staffed at below 70% of establishment (target is 85%). Ongoing support to deployments has highlighted shortages in specialist communications trades in particular. Communications sustainability remains difficult with concurrent missions.


– DLOC for units contributing to Company and Battalion Groups.

– BLOC for Brigade Group framework units (TF Regiments).

An artillery battery (of 6 guns) was available at DLOC. Engineer and communications elements were available at DLOC to support Company Group tasks for EC1 and EC2 only.

Basic Level of Capability (BLOC) was maintained.

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Targets Performance AchievedLand Combat Support Forces carry out a range of training activities in accordance with the NZDF Master Activity Schedule (MAS), Army Mission Essential Task Lists (METLs), and Formation and Unit Training Directives. This will include participation in Battalion Group and Formation level exercises.

Land Combat Support Forces conducted a range of training activities, including sub–unit or specialist troop exercises. Because of operational commitments, opportunities for training in a combined–arms environment were limited to Command Post Exercises.

Combat Viability:Personnel that meet the collective training standards, experience levels and qualification requirements for military tasks.

The trained state was sufficient to meet the requirements with the exceptions noted above.


Land Combat Support Force elements were substantially prepared for low–level conflict. There are limitations on the ability to respond to contingencies involving a higher threat environment, due to deficiencies in communications, mobility and combat field engineer equipment. These deficiencies still impair the Army’s effectiveness in conventional combat operations and more demanding peace support operations. These issues will begin to be addressed within the commencement of the Defence Sustainability Initiative.


There have been no significant problems with interoperability and standardisation, except for the lack of cueing and identification equipment for the Air Defence capability which is under action.

Forward Air Control (FAC) degradation is critical and also affects this output.

Deployability: Force elements capable of generating OLOC within designated response time, as specified in Schedule 4 to the NZDF Output Plan.

The Artillery was capable of generating OLOC within the response time. The engineers and communications elements were capable of generating OLOC for a partial response within designated response times to meet lower–end operational spectrum contingencies. Engineer and communications equipment included in the LTDP is necessary to ensure combat viability.

An engineer troop achieved DLOC and was deployed on operations in Iraq during the reporting period.

Munitions, stores and equipment available for OLOC generation, as specified in unit TOE / Contingency Plans (CONPLANS).


Sustainability:Munitions, expendable and technical stores available, as specified in CONPLANS, to maintain OLOC for the designated operational viability period.


Personnel available for reinforcement and rotation of deployed forces for continuous operations in accordance with Schedule 4 to the NZDF Output Plan.

The Army would have been incapable of providing all the personnel required for reinforcement and rotation if all force elements had been deployed concurrently.

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Actual 2003/04




Actual 2004/05

($ million)


135.472 Total Expenses 141.533 134.927 136.115


0.179 Revenue Other 0.274 0.372 0.253134.358 Total Revenue 141.533 134.927 136.853

(1.114) Net Surplus (Deficit) – – 0.738

Cost by Output47.360 Output 8.1 48.727 45.494 45.81558.575 Output 8.2 61.859 58.466 60.37329.537 Output 8.3 30.947 30.967 29.927

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Output Class 9: Land Combat Service Support Forces


Provide land combat service support force elements (transport, including a strategic movements element, medical, supply, repair and military police) required for the support of land operations under Employment Contexts 1, 2, 3, 4, & 5.



Output 9.1: Transport / Movement

The provision of transport units, including strategic movements and terminal operations staff as required, prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide transport elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Output 9.2: Medical

The provision of medical units, including dental elements, prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide medical elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Output 9.3: Supply

The provision of supply units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide supply elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Output 9.4: Repair

The provision of repair units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide repair elements to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services. This output includes the provision of recovery assets.

Output 9.5: Military Police

The provision of military police units prepared for the support of land operations and capable of supporting up to an infantry battalion group sized force. It also includes the requirement to provide military police units to the framework of an infantry brigade group for training in New Zealand, and the provision of some community support services.

Above: A NZ Army Light Operational Vehicle

Below: NZ Army medical personnel provide humanitarian assistance in Indonesia after the tsunami disaster

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Overview

Combat Service Support (CSS) is an integral part of the planning, preparation and execution of any operation. Logistics support for Land Combat and Land Combat Support forces includes transport, movement control, supply, repair, medical and military police elements. These elements are drawn from two Logistics Battalions (2 Log Bn and 3 Log Bn), 2 Health Services Battalion, and the Force Military Police Company. All of these elements (particularly specialist medical support) would rely on the Territorial Force to supplement and sustain any major deployment.

The Logistics elements continued to make a significant contribution to ongoing operations (see Output Class 16 for further details). The focus for all CSS elements has been on the continued regeneration of capability (equipment refurbishment and training) for conventional operations, while transitioning to support the implementation of new capabilities.

Under the Long Term Development Plan, the acquisition of CSS vehicles, including fuel, water and bulk handling equipment, and the replacement of the current general service trucks, are critical enablers for NZLAV motorised operations.

Performance



Army, drawing on 2 LFG and 3 LFG Regular Force transport, medical, supply, repair and military police units (2 Logistics Battalion, 3 Logistics Battalion, 2 Field Hospital, and Force Military Police Company, respectively), and with supplementation from the TF Regiments, as required, will provide the initial and rotation combat service support force elements to support, as applicable:

– An Infantry Company Group (motorised or non–motorised) for tasks under ECs 1 and 2.

– Up to an Infantry Battalion Group (motorised or non–motorised) for tasks under ECs 2 – 5 (inclusive).

– Sub–unit elements as options for independent contribution to a combined force.

Army was able to sustain CSS elements to support short duration EC1 and EC2 operations, but with personnel and equipment limitations as detailed in the responses below.

Army was capable of providing the CSS required to support an Infantry Company Group for low–level tasks.

The Army is only partially able to provide the Medical support for a Battalion Group because of limitations with the surgical capability.

With current commitments only limited CSS elements were available to contribute to other combined forces.

Army will also provide combat service support elements to support the framework for an infantry brigade group for combined–arms training; this will require supplementation by the TF Regiments.

Reconstitution from operational commitments and the ongoing shortages of personnel and equipment means that considerable lead time would be required to generate the CSS capabilities to support a Brigade Group for combined–arms training. This could affect DLOC generation by increasing response times.

Land Combat Service Support Force elements contributing to the above forces available at manning levels as specified in Army Tables of Organisation and Equipment (TOE).

Most units were staffed at below 80% of establishment. The Army was partially prepared to provide the personnel required as specified in the Army TOE for an initial deployment of ECs 3–5.


– DLOC for units contributing to Company and Battalion Groups.

– BLOC for Brigade Group framework units (TF Regiments).

Army CSS elements provided logistics support to ongoing deployments.

TF elements were at BLOC.

Land Combat Service Support Forces carry out a range of training activities in accordance with the NZDF MAS, Army Mission Essential Task Lists (METLs), and Formation and Unit Training Directives. This will include participation in Battalion Group and Formation level exercises.

The strain on CSS elements caused by sustaining operations concurrently with providing ongoing garrison support, conducting limited operational training and transitioning to support new capability was considerable. Limited collective training was conducted which was not theatre–specific in nature.

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Targets Performance AchievedCombat Viability:

Personnel that meet the collective training standards, experience levels and qualification requirements for military tasks.

The tempo of activities and the shortage of personnel have led to a reduction in the depth of experience and level of competence across the whole range of CSS functions.


Land Combat Service Support Force elements were substantially equipped for low–level conflict. The ability to respond to major conventional contingencies was limited due to deficiencies including communications, Light Operational Vehicles, specialist CSS vehicles and bulk handling equipment. These issues will be addressed within the commencement of the Defence Sustainability Initiative.


There were no significant problems with interoperability or standardisation when working with friendly forces.

Deployability:Force elements capable of generating OLOC within the designated response time, as specified in Schedule 4 to the NZDF Output Plan.

Army CSS force elements were capable of generating a partial response to EC contingencies with the limitations detailed above.

Munitions, stores and equipment available for OLOC generation, as specified in unit TOE / Contingency Plans (CONPLANS.)

Munitions stores and equipment were available for OLOC generation.

Sustainability:Munitions, expendable and technical stores available, as specified in CONPLANS, to maintain OLOC for designated operational period.

Munitions stores and equipment were available for OLOC generation, although this has been at the expense of other support and training activities.

Personnel available for reinforcement and rotation of deployed forces for continuous operations in accordance with the NZDF Output Plan.

There is a shortage of qualified CSS personnel across the board for sustainment. The CSS area of greatest risk has been Medical, where significant numbers of TF and civilian specialist personnel are essential to maintain services.




Actual 2003/04




Actual 2004/05

($ million)

Expenditure58.488 Personnel 57.742 59.668 62.39132.219 Operating 34.951 33.233 33.7599.447 Depreciation 13.245 9.728 9.571

12.951 Capital Charge 12.149 11.292 11.291113.105 Total Expenses 118.087 113.921 117.012


0.157 Revenue Other 0.244 0.350 0.238111.127 Total Revenue 118.087 113.921 116.476(1.978) Net Surplus (Deficit) – – (0.536)

Cost by Output21.523 Output 9.1 24.499 22.583 21.72317.835 Output 9.2 18.426 16.635 18.00031.416 Output 9.3 29.829 29.603 33.79230.673 Output 9.4 32.677 32.217 29.99811.658 Output 9.5 12.656 12.883 13.499

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Output Class 10: Specialised Forces


Provide specialised forces prepared for:

– Special Operations under Employment Contexts 1 to 5.

– Counter–Terrorist Operations under Employment Context 1D.

– The disposal of Improvised Explosive Devices on a national basis. (Known as Improvised Explosive Device Disposal (IEDD)).

– The neutralisation of Chemical and Biological Terrorist Devices on a national basis. (Known as Chemical and Biological Response (CB Response)).

Outputs Within Output Class 10:

Output 10.1: Special Forces

The provision of Special Air Service (SAS) forces prepared for the conduct of ‘special forces’ tasks in support of land combat operations.

Output 10.2: Counter–Terrorist Forces

The provision of specialised forces at the operational level of capability prepared to conduct counter–terrorist operations within specified response times, either in New Zealand, or in South Pacific countries when requested.

Output 10.3: Disposal of Explosive Devices and Neutralisation of Chemical and Biological Devices

The provision of specialised teams at the operational level of capability prepared for the disposal of improvised explosive devices and the neutralisation of chemical and biological devices that threaten public safety or national interests. These teams, manned by personnel from the three Services, will not normally be available for other community support services. (This output does not include the military operational requirement for dedicated Army and Navy IEDD and Explosive Ordnance Disposal (EOD) Teams. Those Teams, while drawing on the same pool of qualified Army and Navy personnel, are met from Output Classes 9 and 4 respectively).

Overview

Specialised Forces are maintained at a high state of readiness for the conduct of short notice special operations in support of land combat operations, counter–terrorist operations, and the disposal of improvised explosive devices (IED) that threaten public safety or national interests. These forces are drawn from the 1st NZ Special Air Service Group and IED Disposal Teams.

The capability to neutralise chemical and biological devices has not yet been fully developed. This will continue to be addressed during 2005/2006. There is provision in the Long Term Development Plan to rectify deficiencies in special operations mobility, communications and firepower.

Above: Firing an 81mm mortar

Below: Special Forces on operation in Afghanistan

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Performance



Army, drawing on 1st NZ Special Air Service (SAS) Group and Army/NZDF–wide resources, will provide:

– The initial and rotation elements of a SAS Sqn to conduct ‘special operations’ in support of land combat operations under Employment Contexts 1 – 5 (inclusive), and to provide elements, as appropriate, in support of a Company and / or Battalion Group (motorised or non–motorised).

– A Counter–Terrorist Group to assist the NZ Police in CT operations, including Maritime CT.

– 3 x IEDD/CB Response Teams (one each based at Auckland, Wellington and Christchurch) and a specialist CB Response Team to undertake emergency national IEDD/CB Response tasks.

The Special Forces, including 1 NZSAS Gp, were able to meet this requirement (within the equipment limitations noted above).

A CTG was available.

This capability was maintained (with the CB limitations noted above). Skilled personnel and equipment shortages continue to affect this capability.

Army will also maintain a SAS Squadron to support the framework of an infantry brigade group for training in New Zealand.

This capability was available.

Readiness:Special Air Service Forces, Counter–Terrorist (CT) Forces and IEDD/CB Response Teams that meet the degrees of notice and DLOC and OLOC readiness criteria in accordance with Schedule 4 to the NZDF Output Plan.

Special Forces met specified readiness standards.

Special Air Service Forces, CT Forces and IEDD/CB Response Teams carry out a range of readiness training activities in accordance with the NZDF MAS, METLs, and Formation and Unit Training Directives to maintain DLOC and OLOC, as appropriate, in accordance with Schedule 4 to the NZDF Output Plan.

Personnel met the training standards, experience levels and qualifications requirements. There are significant shortfalls in personnel within this output. This shortfall is currently being addressed (although it will take several years to rectify once approval has been given).

Combat Viability:Personnel that meet the experience levels and qualification requirements for Special Air Service operations, CT tasks and IEDD/CB Response tasks.

Personnel met the training standards, experience levels and qualifications requirements, with the exception of CBR.

However, skilled IEDD personnel and equipment shortages have affected this capability on occasion.

Equipment performance, reliability and technology that meet required OLOC standards for commitment to Special Air Service operations, CT tasks and IEDD/CB Response tasks.

Equipment partially met performance and reliability standards. There are specialist equipment shortfalls which are being addressed within the Defence Sustainability Initiative.


There were significant problems experienced in the area of Close Air Support. Trained Forward Air Controllers are not available, however this deficiency is being addressed.

Deployability:Special Forces, CT forces and IEDD/CB Response Teams capable of deploying within specified degrees of notice or response times, as applicable, in accordance with Schedule 4 of the NZDF Output Plan.

Special Forces were capable of deploying within response times.

Munitions and specialist stores available to OLOC standards.

Munitions and specialist stores were available.

Sustainability:Munitions and specialist stores available for period of special operations, CT tasks and IEDD/CB Response tasks.

Munitions and specialist stores were available.

Personnel available for reinforcement and rotation of deployed forces for continuous operations in accordance with Schedule 4 of the NZDF Output Plan.

Personnel were available for extended period CT and IEDD tasks within the limitations reported in classified OPRES statements.

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Actual 2003/04




Actual 2004/05

($ million)



37.634 Total Expenses 40.078 40.417 39.782

Revenue38.519 Revenue Crown 39.993 40.274 39.9180.053 Revenue Other 0.085 0.143 0.097

38.572 Total Revenue 40.078 40.417 40.0150.938 Net Surplus (Deficit) – – 0.233


– Output 10.3 – 0.731 –

Note: The cost of Output 10.3 is incorporated in the relevant Output Classes that provide the personnel.

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Output Class 12: Maritime Patrol Forces


Provide Maritime Patrol Forces from No 5 Squadron RNZAF prepared for, in priority order, the conduct of maritime surveillance, search and rescue missions, and maritime air operations under Employment Contexts 1, 2, 3, 4 and 5.

Contribute to a range of services in support of other government departments, including Multi–Agency Operations/Tasks (MAO&T), the community, and foreign and defence policy objectives, when not committed to operations, using the capabilities developed for the operational role.

Overview

The Maritime Patrol Force (MPF) maintains six P–3K Orion aircraft as the operational platforms forming the basis of this output. The Orion aircraft is ideally suited to long–range maritime surveillance, and the planned mission systems upgrade combined with the recently completed structural refurbishment will allow it to operate for many years to come.

The obsolescent mission systems onboard the P–3K Orion continue to limit availability for surveillance flights and other missions due to repeated equipment failures. In 2004, under the Defence Long Term Development Plan, a contract was let with L3 Communications Integrated Systems for the upgrade of the aircraft’s sensors, mission management system, communications and navigation systems. The project is now underway with the first upgraded aircraft due for completion in mid 2008 and the last completed by late 2010. The Long Term Development Plan also includes a project to upgrade the aircraft’s self–protection systems.

Over the last 12 months crews have performed most of the major roles required of the Force, including the routine surveillance of the New Zealand and South Pacific Island Exclusive Economic Zones, coverage of the Southern Ocean fishery, and numerous Search and Rescue and post cyclone surveillance flights.

Above: RNZAF No 5 Squadron personnel with members of 613 Squadron of the Republic of Korea Navy during a joint exercise

Below: RNZAF P-3K Orion

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Performance



Two P–3K Orion aircraft available for deployed military tasks; aircraft to be sustainable on continuous operations in accordance with Schedule 4 of the Output Plan.

Two P–3K Orion aircraft were available for deployed military tasks.

One P–3K Orion for maritime Search and Rescue and other emergency tasks, as required.

One P–3K Orion was available for maritime Search and Rescue and other emergency tasks.

Air and ground crews at manning levels as specified in the RNZAF Funded Personnel Level.

There were insufficient aircrew personnel to generate the number of crews required by the Output Plan. Efforts to regenerate aircrew numbers remain a high priority. There were insufficient maintenance personnel to satisfy the unit establishment with critical staffing and experience deficiencies developing at the technician and junior/intermediate supervisor levels.

Equipment types and numbers as specified in Schedule 4 to the NZDF Output Plan, the Air Force publication NZAP(S) 700 and Standard Operating Procedures.

Equipment remains satisfactory for the most basic surveillance tasks, although the age of most sensors increases both failure rates and maintenance costs. Mission equipment is inadequate for the majority of the more demanding surveillance and maritime air operations tasks. Spares support for the existing mission systems is becoming increasingly problematic with increased failure rates impacting on mission completion rates and increasing the workload maintenance and logistic support capacity. Interim capability enhancements are becoming problematic to support due to partial fleet configurations and limited spares support.

Readiness:Maritime Patrol Forces that meet the specified DLOC readiness criteria in accordance with Schedule 4 to the NZDF Output Plan.

The MPF is prepared to conduct maritime surveillance in a low threat environment but is only partially prepared to conduct more advanced Maritime Air Operations. The conduct of routine patrols of the NZ and South Pacific EEZs, and the surveillance of the Southern Ocean fisheries, demonstrate readiness for the basic surveillance mission.

Maritime Patrol Forces carry out a range of training activities in accordance with the NZDF Master Activity Schedule (MAS), RNZAF Mission Essential Task Lists (METLs and the RNZAF Exercise Programme.

The MPF was able to practice most Mission Essential Tasks in conjunction with a wide cross section of potential coalition partners during the period. During the year it participated in complex multinational maritime warfare serials in the United Kingdom, and in regional and local exercises with South East Asian and Australian forces. In addition, the MPF hosted deployed RAF and RAAF elements during Exercise TASMANEX and Exercise FINCASTLE, using the opportunity to exercise and demonstrate its interoperability in operations and agency support and tasking roles. These exercises helped crews to develop and maintain a basic level of proficiency in Military Surveillance tasks, Maritime Anti–Surface Warfare, and a very basic level of Anti–Submarine Warfare.

To conduct DLOC Readiness training and Combat Viability exercises, planned total Orion flying hours are 2,509 (target range 2,470–2,540 hours).

No 5 Squadron flew a total of 2,374 hours, of which 1,875 hours directly contributed to the maintenance of DLOC. The Squadron flew 377 hours on NZ EEZ surveillance patrols, 319 hours on South West Pacific EEZ surveillance patrols, and 282 hours on national and international SAR operations. The reasons for the under fly in hours were a lack of available aircraft due to baseline modification and reduced maintenance

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Targets Performance Achievedsupport requirements and a significantly greater than forecast search and rescue activity during the last quarter of the reporting period.

Combat Viability:Air and ground crews that meet the collective training standards, experience levels and qualification requirements for military tasks.

All air and ground crews are qualified in accordance with their respective manuals of training. Experience across all aircrew categories is increasing under careful management. Experience amongst technical tradesmen is still less than desired and is difficult to increase due to resignations from the Service.

Aircraft and equipment performance, reliability and technology that meet required standards for commitment to military tasks.

The P–3K Orion airframe and engines are suitable for all of the tasks assigned. The mission equipment is generally unreliable and is less than ideal for many tasks. The number of partial fit options, upgrades, and the lack of configuration consistency across the fleet reduces aircrew and maintenance crew readiness.


Maritime Patrol Forces doctrine, training and operating procedures allow integration with friendly forces as demonstrated during international exercises. However, mission system and communication system equipment limitations reduce the level of interoperability achievable in anything other than low intensity operations.

Deployability:Maritime Patrol Forces capable of generating OLOC within designated Response Times, as specified in Schedule 4 to the NZDF Output Plan.

The MPF was partially prepared to deploy to conduct lower level employment contexts, however it was unable to generate OLOC for the more demanding tasks in the medium to high threat environment. Current P–3K mission systems are inadequate to perform higher level employment contexts and therefore prohibit employment in these roles. Sustainment of deployments would not be achievable due to insufficient aircrew and maintenance manning on the unit.

Aircraft, munitions, expendable and technical stores available to generate OLOC, as specified in Schedule 4 to the NZDF Output Plan and NZAP(S) 700.

The MPF is able to generate OLOC for basic surveillance roles in a low threat environment, but has insufficient weapons, expendables and technical stores to generate OLOC for the more demanding employment contexts in the medium to high threat environment.

Sustainability:Aircraft, munitions, expendable and technical stores available, as specified in NZAP(S) 700, to maintain OLOC for designated periods.

The MPF has insufficient weapons, expendables and technical stores to maintain OLOC for other than surveillance roles in low threat environments.

Personnel available for sustainment/rotation of the Maritime Patrol Forces on continuous operations as specified at Schedule 4 to the NZDF Output Plan.

There are currently insufficient personnel to sustain the MPF on continuous operations in accordance with Schedule 4.

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Actual 2003/04




Actual 2004/05

($ million)


142.290 Total Expenses 143.024 134.591 132.800



1.202 Net Surplus (Deficit) – – 1.148

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Output Class 13: Fixed Wing Transport Forces


Provide Fixed Wing Transport Forces from No 40 Squadron RNZAF prepared for the conduct of strategic and tactical air transport operations under Employment Contexts 1, 2, 3, 4, and 5.

Contribute to a range of services in support of other government departments, the community, and foreign and defence policy objectives, when not committed to operations, using the capabilities developed for the operational role.


Output 13.1: B757 Transport Force

The provision of Boeing 757 aircraft prepared for non–deployed strategic air transport tasks, and to provide some support services for Government and the community1.

Output 13.2: C–130 Transport Force

The provision of C–130 Hercules aircraft prepared for both strategic and deployed tactical air transport operations and for some support services for Government and the community1.

Overview

The Hercules and Boeing 757 aircraft supported a wide range of NZDF, Government and community activities during the year. This included operational support by both aircraft types to NZDF deployments in Afghanistan, Iraq, South East Asia for tsunami relief, the Solomon Islands, and support to the New Zealand Antarctic Research Programme. Both aircraft types also supported a wide range of exercises and VIP tasking, including HRH the Prince of Wales’ visit and visits by other heads of state.

After successful introduction into service, the two Boeing 757–200 aircraft achieved a high rate of availability and were therefore available to support a number of activities. Both aircraft require further modification, including the installation of a cargo door, strengthened floor, and air stairs, before they provide the required NZDF Output Plan capability. The modification program is scheduled to commence in mid 2006 and will take around six months to complete each aircraft.

The Long Term Development Plan includes a C–130 Life Extension project, and an upgrade to the C–130 Communications and Navigation systems. These improvements will be completed in the 2005/10 timeframe and will extend the aircraft’s life, improve reliability, and make the navigation and communications suite compatible with international standards. In the meantime, however, the C–130 fleet continues to suffer poor reliability due largely to age related component failures.

Above: A RNZAF C-130 Hercules aircraft on overseas operations

Below: RNZAF Boeing 757 aircraft

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Whilst scheduled servicings and inspections successfully identify and rectify many critical areas, a large proportion of C–130 tasks continue to be affected by unpreventable airborne system failures.

Performance



Two C–130 Hercules aircraft available for deployed military tasks; to be sustainable on continuous operations in accordance with Schedule 4 of the NZDF Output Plan.

Two C–130 Hercules aircraft were available for deployed military tasks. One Boeing 757 was available for strategic non–deployed transport tasks.

A third Hercules to be available for specified tasks under EC 1D and emergency tasks as required.

One Hercules was available.

One Boeing 757 available for strategic non–deployed transport tasks; to be sustainable for expected duration of strategic transport tasks in accordance with Schedule 4 of the NZDF Output Plan.

One Boeing 757 was available (although difficulties in sourcing a major component caused short periods of unavailability).

An Aeromedical Evacuation (AE) element for strategic and tactical AE in support of land operations1.

Limited operational AE was available. AE of high dependency cases requires civilian agency medical support and specialist equipment. Action has been taken to address equipment deficiencies, while specialist personnel requirements are the subject of further study.

Air and ground crews at manning levels as specified in the RNZAF Funded Personnel Level. “Crews” include AE support staff; this will include joint and/or civilian medical staff for strategic and tactical AE, as required1.

Aircrews were maintained at the manning levels specified, although identification of suitable AE support staff is required. Ground crews continue to be undermanned in critical supervision areas.

Equipment types and numbers as specified in Schedule 4 to the NZDF Output Plan, the Air Force publication NZAP(S) 700, and Standard Operating Procedures.

The Boeing 757 and Hercules were equipped as specified in the Output Plan. The Boeing 757 aircraft require further modifications in order to comply with all requirements. The modification program is scheduled to commence in mid 2006 and will take six months to complete each aircraft.

Readiness:Fixed Wing Transport Forces that meet the specified DLOC readiness standards in accordance with Schedule 4 to the NZDF Output Plan.

The Boeing 757s were held at DLOC for the passenger role. The Hercules were substantially prepared for operations at the lower end of the threat spectrum across the range of ECs.

Fixed Wing Transport Forces carry out training activities in accordance with the NZDF MAS, RNZAF METLs and the RNZAF Exercise Programme.

The Boeing 757 provided strategic airlift support to a wide range of NZDF activities. The Hercules provided strategic airlift support to a wide range of NZDF activities and also participated in exercises designed to practice the Mission Essential tactical airlift skills required of the unit. These exercises involved the integration of New Zealand tactical transport operations with those of a number of allied forces.

The Boeings will fly a total of 1,256 hours (target range 1,200–1,300), and the Hercules will fly a total of 2,604 hours (target range 2,580–2,630).

The Boeing 757s flew a total of 1,263 hours. The Hercules flew a total of 2,328 hours. The Boeing 757s flew 1,256 hours that contributed directly to the maintenance of DLOC. The Hercules flew 2,240 hours that contributed towards the maintenance of DLOC. The reason for the reduced hours flown by the Hercules was due to poor aircraft serviceability rates, in particular unscheduled maintenance due to numerous age–related system faults that affected the ability to complete planned tasks. Many tasks faced lengthy delays and amendments, while others were cancelled altogether or transferred to the Boeing 757.

1 The RNZAF is required to provide forward, tactical and strategic Aeromedical Evacuation (AE) services, including responsibility for the provision of AE–qualified personnel and associated AE equipment. For fixed wing tactical and strategic AE it is likely that, for high dependency cases, specialist support would be sought from other Services of the NZDF and/or non–defence resources.

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Targets Performance AchievedCombat Viability:

Air and ground crews that meet the collective training standards, experience levels and qualification requirements for military tasks.

Fixed Wing Transport air and ground crews were trained in accordance with the appropriate manuals, and met the standards and qualification requirements for all assigned military tasks. Shortfalls continue to exist in numbers of fully trained maintenance personnel. Numbers remain constantly below establishment. The high operational tempo, especially the tsunami relief flights over the Christmas period, however, has resulted in a shortfall in a number of DLOC training activities.

Participation in a number of Operations and Exercises, ranging from the short runways and tropical environment of the Solomon Islands, through the mountainous regions of Afghanistan in support of Operation Enduring Freedom, to the ice runways of Antarctica, demonstrates the ability of the Hercules and its crews to operate in challenging environments globally.


Modifications, including cargo door, strengthened floor, and air stairs are required before the Boeing 757 can fully meet its capability requirements. The modification program is scheduled to commence in mid–2006 and will take at least six months to complete each aircraft.

The reliability and other age–related factors of the Hercules continue to deteriorate. The limited availability of rotable spares has had an adverse effect on serviceability. In particular, the aircraft radar, the self– protection system, hydraulics, powerplant and propeller, electrical subsystems, fuel systems, navigation systems, and fire/overheat warning systems are affected. The upgrade of avionics and structural components during the C–130 life–extension program will address many of these issues. The Instrument Flight Rules, certified Ground Positioning System (GPS) and Iridium phone installations, represent improvements in airspace management and communication capabilities.


The Fixed Wing Transport Forces continue to utilise doctrine, standards and procedures that allow the smooth integration with a variety of friendly forces. Equipment limitations, such as the lack of night vision capability, are now affecting interoperability. The introduction of the Portable Flight Planning System has significantly improved one aspect of interoperability. Capital acquisitions in the short and medium terms will address these other deficiencies.

Deployability:Fixed Wing Transport Forces capable of generating OLOC within designated Response Times, as specified in Schedule 4 to the NZDF Output Plan.

With the exception of the capabilities that will be delivered during the planned modification program, the Boeing 757 was held at DLOC, which equates to OLOC for its strategic transport tasks. The C–130 fleet was capable of generating OLOC, within the designated response times, for low–threat environments.

Aircraft, expendable and technical stores available to generate OLOC, as specified in Schedule 4 to the NZDF Output Plan and NZAP(S) 700.

Sufficient expendable and technical stores were available to generate OLOC. The availability of some spares for the B–757 however deteriorated during the period. Considerable lead times were required until these spares became available.

Sustainability:Aircraft, expendable and technical stores available, as specified in NZAP(S) 700, to maintain OLOC for designated periods.

Sufficient expendable and technical stores were available to maintain OLOC at medium intensity levels in a low–threat environment for the prescribed periods.

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Targets Performance AchievedPersonnel available for sustainment/rotation of the Fixed Wing Transport Forces on continuous operations as specified in Schedule 4 to the NZDF Output Plan.

Sufficient aircrews were available to sustain deployed operations. The occurrence of multiple concurrent and no notice deployments placed significant and unsustainable strain on the entire Squadron. The shortage of qualified and experienced maintenance personnel impacted upon the sustainment of deployed operations over an extended period.




Actual 2003/04




Actual 2004/05

($ million)


194.049 Total Expenses 184.685 164.754 162.883



2.412 Net Surplus (Deficit) – – 0.826


130.067 Output 13.2 130.900 109.433 107.537

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Output Class 14: Rotary Wing Transport Forces


Provide Rotary Wing Transport Forces (RWTF), from No 3 Squadron RNZAF, prepared for the conduct of tactical air transport operations, including Aeromedical Evacuation (AE), and counter–terrorist operations, under Employment Contexts 1, 2, 3, 4, and 5.

Contribute to a range of services in support of other government departments, including multi–agency operations/tasks (MAO&T), the community, and foreign and defence policy objectives, when not committed to operations, using the capabilities developed for the operational role.

Overview

The 14 UH–1H Iroquois helicopters perform a wide range of tasks in support of NZDF operations and activities, in addition to supporting other Government agencies and the community. The primary role of the Iroquois is the provision of tactical air transport to both conventional and counter–terrorist military operations. Other tasks include Aeromedical Evacuation and Search and Rescue.

The Rotary Wing Transport Force deployed four aircraft to the Solomon Islands from July 2003 to July 2004, providing tactical air transport and Aeromedical evacuation capabilities to the Australian–led Regional Assistance Mission to the Solomon Islands. This prevented it from consolidating on the regeneration program that followed the East Timor deployment, which has had a significant impact on its preparedness for conventional battlefield operations and higher threat environments. Exercises conducted in late 2004 and early 2005 have addressed this deficiency.

The RNZAF Iroquois fleet has provided almost 40 years’ service and limitations in its capabilities are becoming more pronounced. In particular, the limited lifting capacity in hot environments and high altitude, and the lack of self–protection equipment are placing greater constraints on the operational utility of the aircraft. A project has commenced under the Long Term Development Plan to replace the Iroquois with the NH90, and the Bell 47G Sioux training helicopter with a helicopter that will fulfil the training and light utility roles.

Above: RNZAF Iroquois crew member with night vision goggles

Below: RNZAF Iroquois helicopter crew return after a sortie

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Performance



Six UH–1H Iroquois helicopters available for military tasks; to be sustainable on continuous operations in accordance with Schedule 4 of the NZDF Output Plan.

Six helicopters were available for military tasks in accordance with Schedule 4.

Two additional helicopters on standby for rapid response tasks under EC1 and for Search and Rescue.

Two aircraft were available for rapid response tasks under EC1 and one aircraft was available for Search and Rescue in accordance with Schedule 4 of the NZDF Output Plan.

A forward and tactical Aeromedical Evacuation (AE) element for the support of land operations.

Forward and Tactical AE was available when required. High dependency cases require Army medical support on board.

Air and ground crews at manning levels as specified in the RNZAF Funded Personnel Level.

Aircrews were generally staffed in accordance with the Master Establishment. Some shortfalls occurred late in the period due to staff absences on Peace Support Operations deployments, Leave Without Pay and professional training. Maintenance crews were generally slightly below establishment due to a shortage of junior mechanics.

Equipment types and numbers as specified in Schedule 4 to the NZDF Output Plan, the Air Force publication NZAP(S) 700 and Standing Operating Procedures.

The Iroquois helicopter was equipped and supported as specified.

Readiness:Rotary Wing Transport Forces that meet the specified DLOC readiness standards in accordance with Schedule 4 to the NZDF Output Plan.

A concentrated exercise period following the withdrawal from the Solomon Islands has seen the RWTF regain DLOC across all roles/tasks. The RWTF remains substantially prepared for lower level contingencies as a result.

The RWTF maintained OLOC for EC1D.Rotary Wing Transport Forces carry out a range of training activities in accordance with the NZDF MAS, RNZAF METLs and the RNZAF Exercise Programme.

The RWTF conducted training activities including Exercise STEEL TALON (Tactical Transport Operations), Exercise BLACKBIRD (Mountain Flying) and Exercise PEKAPEKA (Night Vision Goggle Operations).

Planned total Iroquois flying hours are 4,660 (target range 4,600–4,720 hours)

No 3 Squadron flew a total of 4,250 hrs for the FY 04/05. The Iroquois flew 4,121 hours that directly contributed to the maintenance of DLOC. The shortfall was a function of reduced pilot training numbers and reduced aircrew numbers late in the period, and the availability of rotor blades.

Combat Viability:Air and ground crews that meet the collective training standards, experience levels and qualification requirements for military tasks.

Air and Ground crews were trained in accordance with the appropriate standards and met the levels of experience required for the conduct of military tasks.


Aircraft and equipment performance and reliability continue to limit the capability of the RWTF. In particular, the performance of the aircraft in bad weather, at night and in hot and high conditions is unsatisfactory. The problem of main rotor blade delamination is being effectively managed, but at additional cost in both increased consumption of rotor blades and an increased maintenance burden.


RWTF doctrine, training and procedures allow smooth integration with a variety of friendly forces, as was evidenced during the Solomon Islands deployment.

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Targets Performance AchievedDeployability:

Rotary Wing Transport Forces capable of generating OLOC within designated response time, as specified in Schedule 4 to the NZDF Output Plan.

The successive deployments to East Timor and to the Solomon Islands demonstrate the RWTF’s ability to generate OLOC well within designated response times for low–level contingencies and operations in low–threat environments. The lack of aircraft performance and aircraft self–protection means the RWTF could not generate OLOC for a medium/high–threat environment, as specified in Schedule 4, until the Iroquois is replaced.

Aircraft, expendable and technical stores available to generate OLOC, as specified in Schedule 4 to the NZDF Output Plan and NZAP(S) 700.

Sufficient stores were available to generate OLOC. Additional aircraft spares have been purchased to allow concurrent operations and deployments within New Zealand.

Sustainability:Aircraft, expendable and technical stores available, as specified in NZAP(S) 700, to maintain OLOC for designated periods.

Aircraft, expendable and technical stores were available to maintain OLOC for designated periods.

Personnel available for sustainment/rotation of the Rotary Wing Transport Forces on continuous operations as specified in Schedule 4 to the NZDF Output Plan.

The RWTF is not established to support continuous operations as specified in Schedule 4 to the NZDF Output Plan. The RNZAF is reviewing the requirement. Squadron personnel were available to provide for the sustainment/rotation of the RWTF at lower commitment levels. The staffing level of the Air Security and Aviation Refueller trades would also make the sustainment and rotation of a full complement of support personnel difficult.




Actual 2003/04




Actual 2004/05

($ million)

Expenditure29.764 Personnel 36.166 37.018 36.88023.222 Operating 38.174 39.881 37.454

7.756 Depreciation 7.994 7.919 7.64510.252 Capital Charge 12.851 11.337 11.33770.994 Total Expenses 95.185 96.155 93.316



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Output Class 15: Miscellaneous Support Activities


Provide the training infrastructure and planned support to regional Defence Forces and the New Zealand community, using identified elements of the NZDF. (Output Class 15 has no relationship to Employment Contexts).


Output 15.1: Mutual Assistance Programme

The provision of instructors, facilities and resources to conduct training for and provide technical advice to regional defence forces and law enforcement agencies under the Mutual Assistance Programme (MAP). Assistance is provided in New Zealand and in participant countries.

Output 15.2: NZ Cadet Forces Support

The provision of personnel to provide general policy guidance, uniforms, administrative support and military training assistance, including courses, for all approved New Zealand Cadet Forces (NZCF) units.

Output 15.3: Limited Service Volunteer Training

The provision of NZDF training staff and facilities required for participation in the community training scheme to encourage the unemployed or disadvantaged youth towards employment.

Above: NZCF personnel practice their bushcraft skills

Below: LSV course members completing a confidence course

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Performance

Output performance is measured by the degree of satisfaction expressed by the authorities requesting the assistance. Training and administrative support will be provided in accordance with NZDF quality standards as modified with senior staff from the requesting organisation. Quality will be assessed by the regular evaluation of significant issues, the capacity to react to requests for assistance and the provision of adequate support from the limited resources available. This will include:

The monitoring and analysis of MAP activities within each country programme through various processes, including post–activity reports.

The effectiveness of the support provided to the NZCF is assessed from the reports of Area Officers Commanding, Cadet Unit Commanders, feedback from the public and the overall evaluation by the Commandant NZCF.

Analysis of the Limited Service Volunteer (LSV) training objectives achieved, the reported employment of Scheme participants, and feedback from the public and the Ministry of Social Development.


Training and technical assistance for the Mutual Assistance Programme (MAP) – anticipated to be in the range of 25,000 – 30,000 training days. (The total for training days includes formal training, technical advice, attachments, study, exchanges and minor construction projects both in New Zealand and overseas).

The MAP delivered 115 out of 178 training activities (approximately 27,000 training days), which included training assistance provided to the defence forces and law enforcement agencies of MAP partners via Mutual Assistance Training Teams (MATTs), technical advisors, NZDF courses, tertiary study, exchanges and attachments.

About 70 per cent of the total training activities completed were undertaken with Pacific MAP partners while the rest were conducted with Asian MAP partners. Approximately 65 per cent of the MAP operating and personnel expenditure (as per output 15.1 on the following table) was spent on Pacific MAP activities while the majority of the rest was expended on MAP activities conducted with Asian partners.

Some of the planned MAP activities were unable to be delivered due to cancellation by the NZDF Services or by the MAP countries concerned.

The main outcomes were:

MAP Talks between Fiji and New Zealand held in Suva in November 2004 saw the phased re–introduction of MAP with Fiji. The NZDF has provided professional development training in officer cadet and instructional techniques to Republic Fiji Military Force personnel.

NZDF personnel undertook training needs analysis of the Timor Leste National Defence Force in preparation of developing a programme with Timor Leste in FY 2005/06.

MAP Talks were conducted with the Australian Defence Cooperation Programme (DCP) to complement our respective outputs mainly in the Pacific.

The Pacific Defence & Security Seminar was conducted by the NZ Army Military Studies Institute at Trentham Military Camp in order to address the security challenges facing the region. Almost all Pacific Island Forum countries had representation at the Seminar.

Support for the New Zealand Cadet Forces (NZCF) involving the conduct of 43 courses for cadets and 30 courses for NZCF officers, during which it is anticipated that 1,900 cadets and 130 officers will receive training. This includes a projected total of 107 NZCF Units and approximately 3,393 NZCF officers and cadets. Permanent staff includes 27 training and support staff, and 4 civilian administrative staff.

Support has been achieved for 107 cadet units comprising 298 officers and 3,095 cadets with a total of 12,932 cadet training days delivered. This comprised 43 courses for cadets and 30 courses for NZCF officers. The average parade attendance during the year was 2,388.

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Targets Performance AchievedSpecial Training for Limited Service Volunteers (LSV), to include 5 courses (each of six weeks duration) for up to a total of 720 unemployed people between the ages of 17 and 25 years for the training year (1 Jul 04 – 30 Jun 05).

Five LSV courses (each of six weeks’ duration) were held offering 720 places (144 per course). A total of 347 trainees commenced training and a total of 236 trainees completed training.

The downturn in numbers is a reflection of the current labour market situation.

The NZDF and MSD are to examine ways in which a modified LSV training course could be offered to young people between the ages of 15 to 17.

Quality:Complete the MAP country programmes and activities – consistent with the MAP policy objectives and standards agreed with the participant defence forces and law enforcement agencies, and consistent with NZDF practices.

Based on the feedback received all MAP training and projects undertaken achieved the standards agreed with recipient countries.

Meet the training, course and exercise objectives of the NZ Cadet Forces.

Training delivered by the NZDF to the NZCF has been consistent throughout the organisation and has met the nationally agreed objectives. Where appropriate, courses conducted will meet the requirements of the New Zealand Qualification Authority.

Meet NZDF standards for the administrative support provided to NZCF units.

NZDF delivered training and support to NZCF units has been of a nature commensurate with the civilian and voluntary nature of the NZCF.

Permanent staff support during the year has been maintained at 27 Regular Force personnel and four civilian staff.

Complete training courses to standards agreed with the Ministry of Social Development (MSD).

The MSD has stated that the special nature of the LSV courses continues to be valued as a significant impact on the lives of many unemployed young people. The MSD considers the LSV scheme goes a long way in assisting people to be “work ready”, and appreciates the considerable effort by staff of the LSV Company to work with trainees.


Actual 2003/04




Actual 2004/05

($ million)


Revenue5.922 Revenue Crown 5.863 6.018 5.6621.349 Revenue Other 1.367 1.350 1.3507.271 Total Revenue 7.230 7.368 7.0120.546 Net Surplus (Deficit) – – 0.288

Cost by Output1.890 Output 15.1 2.099 2.286 1.8572.385 Output 15.2 2.529 2.543 2.5422.450 Output 15.3 2.602 2.539 2.325

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Output Class 16: Operationally Deployed Forces


Provide individuals, small detachments, units and equipment prepared to meet Government’s agreed commitments to peace support activities, and military operations.


Output 16.1: Observer and Sub–Unit Contributions

The provision of observer and sub–unit contributions to deployed operations approved by the Government.

Output 16.2: Unit Contributions

The provision of unit contributions to deployed operations approved by the Government.

Overview

Operational deployments directed by the Government require input from all three Services. Operational Command of these forces is assigned to Commander Joint Forces New Zealand for military operations and for mutually agreed Joint (more than one Service) and Combined (more than one Nation) training. New Zealand currently contributes to a wide range of peace support activities and military operations under Output Class 16 (as described in the following pages). Headquarters Joint Forces New Zealand facilitates the planning, command and conduct of these operations, along with the provision of operational support to other government departments such as Customs, the Department of Conservation, NZ Police, and the Ministry of Fisheries.

Over the last twelve months the main effort for Headquarters Joint Forces New Zealand has continued to be the campaign planning, deployment and the rotation of Force Elements in support of Operation Enduring Freedom and operations in various smaller missions. Support to these operations has seen the return to NZ of an ANZAC Class ship, a C–130 Hercules aircraft and 28 personnel deployed in support of operations in the Gulf region, repatriation of an Engineer Troop, rotations for the Provincial Reconstruction Team and staff officers from all three Services to the Gulf Region and Afghanistan, and the deployment of a SAS contingent to Afghanistan. Significant staff effort was also required to plan and conduct the deployment of personnel in support of the international disaster relief as a result of the Tsunami in South East Asia.

Above: HMNZS Te Kaha on boarding operations in the North Arabian Sea

Below: NZ Army Engineers in Iraq

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Performance

Output performance is measured by the degree of satisfaction expressed by the authorities requesting the assistance. The key elements are complete satisfaction with the performance of duties throughout deployments, and satisfactory performance of equipment provided by the NZDF, when applicable. The performance measures are the evaluation of reports from the host organisation, the evaluation of reports from the senior in–theatre NZDF commander, and the evaluation of reports from visiting NZDF staff. The level of capability achieved by individuals, detachments or units before departure is assessed by the designated Operational Commander.


Maintain the commitments specified by Government in its approval for each task/mission/operation.

At the start of the reporting period, 506 NZDF personnel were posted overseas on operations. By the end of the period this figure was 197 personnel plus the SAS contingent. The number of personnel deployed overseas peaked at 468 during the first quarter with the deployment of engineers to Iraq, the Provincial Reconstruction Team to Afghanistan, personnel and four UH–1H helicopters to the Solomon Islands and the continued C–130 Hercules aircraft deployments to the Gulf region. An ANZAC Class Frigate and the engineers in Iraq returned to NZ during Sep 04. In addition to these operations, NZDF ships, aircraft and military units have routinely been deployed in the Asia/Pacific region for training exercises, disaster relief and surveillance support to Pacific nations.

NZDF personnel served on the following missions during 2004–05:

Region and Mission NZDF CommitmentPacific

United Nations Mission in Support of East Timor (UNMISET)

(Operation KORU)

The NZDF has deployed United Nations Military Observers (UNMO) to East Timor since Oct 99. The current commitment to UNMISET of two UNMO and one Military Assistant to the Force Commander ceased with the conclusion of UNMISET on 20 May 05. These personnel will RTNZ during the transition from UNMISET to UNOTIL (United Nations Office in Timor Leste) by 30 Jun 05. The NZDF contribution to UNOTIL is to be confirmed, but is likely to consist of one Military Advisor from 1 Jul 05.

The NZ Training Advisory Team, comprising three NZDF officers, is based in Metinaro and Dili to assist the Office of Defence Force Development with the training of the Timor Leste Defence Force.

Regional Assistance Mission Solomon Islands (RAMSI)

(Operation RATA II)

The NZDF commenced operating in the Solomon Islands (SI) in Jul 03. The commitment has been progressively downscaled from 31 Jul 04 until the next Infantry Platoon deployment in 2006. An infantry platoon of 30 personnel and a three person National Support Element (NSE) deployed from Nov 04 to Feb 05, and one NZDF officer continued throughout the period in a staff position as the operations officer and 2IC of the Combined Joint Task Force (CJTF).

AsiaSupport to Multinational Operations against trans–national terrorism in Afghanistan

(Operation ARIKI)

Two NZDF personnel are currently deployed to the Headquarters of the Combined Forces Command Afghanistan (HQ CFC–A) and Coalition Joint Task Force 76 in Afghanistan.

Three NZDF personnel are deployed to the International Security Assistance Force (ISAF) Headquarters in Kabul, two as staff officers in the support, works and mine awareness areas, and one driver.

Two NZDF personnel assisted in the training of the Afghan National Army as part of a British Army Training Team in Kabul.

115 NZDF personnel are deployed as the New Zealand Provincial Reconstruction Team (NZPRT) to the province of Bamyan in Afghanistan. The PRT is supported by seven personnel based in Bagram as the National Support Element (NSE) and Liaison Officers.

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Region and Mission NZDF CommitmentThree NZDF staff officers are based at HQ CENTCOM in Florida to provide planning advice and assistance for Operation Enduring Freedom and operations in Iraq.

HMNZS TE MANA returned to NZ on 10 Sep 04 after conducting Maritime Interdiction Operations (MIO) contributing to the multinational effort against trans–national terrorism in the Middle East.

One NZDF officer is deployed as a Military Liaison Officer with the United Nations Assistance Mission in Afghanistan (UNAMA).

A NZDF C–130 Hercules aircraft, and 28 NZDF personnel deployed to the Middle East twice in the reporting period in support of TG CRIB rotations in Afghanistan and for the extraction of TG RAKE personnel and equipment from Iraq.

Six NZDF personnel provide a deployed support mechanism for NZDF force elements deployed to the Gulf region.

A SAS contingent deployed to Afghanistan in Jun 05.Cambodian Mine Action Centre (CMAC)

(Operation CAMBER)

The NZDF became involved in CMAC in Dec 1991 to assist in training the Cambodians in de–mining skills. NZ has provided two officers to the CMAC since 1996 in positions of Technical Advisor (Operations) and Technical Advisor (Logistics) to HQ CMAC in Phnom Penh. NZDF support to CMAC ceased on 30 Apr 05.

UN Command Military Armistice Commission in Korea (UNCMAC)

(Operation MONITOR)

Since Jun 04 one NZDF staff officer has deployed as an assistant operations officer within HQ UN Command Military Armistice Commission (UNCMAC) in South Korea.

Middle EastNZDF support to the multinational reconstruction effort in Iraq

(Operation HAVEN)

The 61 NZDF personnel attached to a British Engineer Regiment based in Basra, Iraq working alongside the Multinational Division South East conducting humanitarian aid tasks and reconstruction projects returned to NZ in Sep 04.

Since 10 Jan 05 one NZDF officer has been deployed as a Military Liaison advisor with the United Nations Assistance Mission in Iraq (UNAMI).

Multinational Force and Observers, Sinai (MFO)

(Operation FARAD)

The MFO is an 11–nation commitment based at El Gorah in the north of the Sinai Peninsula. The MFO monitors the implementation of the Treaty of Peace signed between Egypt and Israel in 1979. The MFO function is one of observation, reporting, and investigation of Treaty violations. The NZDF commitment commenced in 1982 and currently consists of a 26 person contingent providing expertise in operations and training with personnel in headquarters, engineer, logistics and training team appointments.

UN Truce and Supervisory Organisation (UNTSO)

(Operation SCORIA)

UNTSO was established in 1948 to monitor the Arab–Israeli peace following the proclamation of the state of Israel. NZ first committed two officers as United Nations Military Observers (UNMO) in 1954 and has gradually increased the commitment to eight UNMO who serve at a variety of locations in Israel, Lebanon and Syria. NZ has also seconded one NZDF officer as the Head of Mission.

EuropeEuropean Union Force Command (EUFOR)

(Operation STANDARD)

New Zealand’s commitment to the Balkan states commenced with seven personnel in 1992. This deployment was followed by an Infantry Company Group to UNPROFOR in 1994. The NZDF has maintained a commitment of a number of staff officers to the Force in Bosnia. Three officers are currently attached to the Headquarters of the Liaison and Observation Teams (LOT) in Banja Luka, Bosnia–Herzegovina.

European Union Force Command (EUFOR)

(Operation FORD II)

Eight NZDF personnel are attached to British Army units assigned to EUFOR in Bosnia–Herzegovina as a Liaison and Observation Team (LOT).

UN Mission In Kosovo (UNMIK)

(Operation KOSTER)

In Jun 99 the UN Security Council authorised the establishment of an interim civil administration in Kosovo. The NZDF commitment is one staff officer as a Military Liaison Officer with the UNMIK Headquarters in Pristina, Kosovo.

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Region and Mission NZDF CommitmentAfrica

Accelerated De–mining Program Mozambique (ADP)

(Operation MOZAM)

In Dec 92 the UN commenced operations in Mozambique to rebuild the country after protracted conflict, and in Sep 94 the UN commenced its de–mining program. New Zealand’s commitment started in 1993 with de–mining expertise to the military. The two Technical Advisors to the Program based at the Mission HQ in Maputo was reduced to one in Dec 04. NZDF support to the ADP will cease on 30 Jun 05.

UN Assistance Mission in Sierra Leone (UNAMSIL)

(Operation SIERRA II)

This operation commenced in 1998 to monitor the security situation in Sierra Leone and the disarmament and demobilisation of the former combatants. In Oct 99 the mandate was adjusted to account for the increasing risk of civil war and 6,000 peacekeepers and up to 210 UNMO deployed forming UNAMSIL. One NZ UNMO was withdrawn on 31 Dec 04, leaving one NZDF officer deployed.

Targets Performance AchievedQuality:

A letter of appreciation was received from a Commander–in–Chief regarding the NZDF contributions to OEF operations. Letters of appreciation were also received from other Government Departments for inter–departmental support provided by the NZDF to local and overseas operations.

The performance of the NZDF against the following targets was assessed against United Nations Department of Peace Keeping Operations requirements.Personnel to be at OLOC before deployment. Personnel were at OLOC before departure.Services provided to the satisfaction of Coalition Commanders, Contingent Commanders and staff responsible for each task.

Services were provided to the satisfaction of Coalition Commanders, Contingent Commanders and staff responsible for each task. A number of personnel achieved citations and certificates of merit from various missions.

Standards achieved as agreed with the parent organisation requesting NZDF participation.

Standards were met.

Timely replacement of each element or individual, when requested.

Individuals were replaced as required with suitably qualified personnel.


Actual 2003/04




Actual 2004/05

($ million)



43.381 Total Expenses 29.060 29.198 21.093

Revenue51.138 Revenue Crown 28.580 29.007 29.0070.277 Revenue Other 0.480 0.191 0.405

51.415 Total Revenue 29.060 29.198 29.4128.034 Net Surplus (Deficit) – – 8.319


40.503 Output 16.2 20.739 25.204 18.462

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Services in Support of the Government and the Community (including Multi–Agency Operations and Tasks [MAO&T])

Overview

Conducting the training activities needed to maintain DLOC for operational employment also produces within the NZDF the capacity to deliver a range of services in support of other government departments, the community, and foreign and defence policy objectives. The provision, at short notice, of trained personnel and their specialist equipment often provides considerable assistance to those government departments and agencies that hold the primary responsibility for coordinating emergency or resource protection services.

The following pages describe the availability of NZDF units for emergency tasks, and a summary of services provided to the Government and Community during the year. This support was delivered by a combination of both deployable Force Elements and non–deployable Support or Training units.

Performance

The Output Performance standard is that Services are provided to the satisfaction of the requesting authority.

Availability For Emergency Tasks

Availability Performance AchievedNavy

One Frigate (or alternative vessel) available at 8 hours degree of notice (DON) for emergency tasks, including SAR and Medical Assistance/Evacuation.

One frigate or alternative vessel was available.

Three Inshore Patrol Craft (IPC) available at 8 hours DON for emergency tasks, including SAR.

Inshore Patrol Craft were available for emergency tasks.

One diving team at 12 hours DON for emergency tasks, including underwater search and explosive ordnance disposal (EOD)

Availability was maintained throughout the period.

One 25 person Civil Defence Response Group One 25 person Civil Defence Response Group was available at Devonport.

On–shore personnel for fire fighting, as available Availability was maintained throughout the period.Army

Personnel in North Island and South Island at 48 hours DON for emergency tasks, including SAR, fire fighting, and casualty/medical evacuation

Nominated units were available at the designated notice.

Personnel On Call for Civil Defence:

HQ elements in North Island and South Island to support a Civil Defence HQ

These elements were available from HQ JFNZ.

Four 25 person Civil Defence Response Groups The designated personnel and groups were available at Waiouru, Linton, Trentham and Burnham.

Two 100 person Civil Defence National Reserve Groups

The designated personnel from 2 and 3 Land Force Groups were available albeit at the expense of DLOC training in the event of activation.

One 500 person Reserve The designated personnel from 2 and 3 Land Force Groups were available albeit at the expense of DLOC training in the event of activation.

EOD Teams in North Island and South Island at 12 hours DON

EOD teams were available.

In–camp personnel for fire fighting, as available Availability was maintained throughout the period.Air

One Iroquois helicopter at 2 hours DON for emergency tasks, including SAR, fire fighting and casualty evacuation

One Iroquois was available for tasking at 2 hours notice.

One Orion (or one Hercules if an Orion is not available) at 2 hours DON for emergency tasks, including SAR and medical evacuation

One aircraft (Orion/Hercules) was available at 2 hours notice for tasking except for a period during an intensive SAR effort in mid Jun 05.

One Hercules at 14 hours DON for emergency flights One Hercules aircraft was maintained on 14 hours notice for emergency flights.

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Availability Performance AchievedOne EOD team at 12 hours DON An EOD team was available at 12 hours notice.One 25 person Civil Defence Response Group at each air base, and elements to support a Civil Defence HQ

A 25 person Civil Defence response group was maintained at Whenuapai, Ohakea and Woodbourne.

Staff Officers to support National Civil Defence Headquarters were available from HQ JFNZ.

On–base personnel for fire–fighting, as available Availability was maintained throughout the period.

Multi–Agency Operations and Tasks (MAO&T)

The term Multi–Agency Operations and Tasks (MAO&T) is used within the NZDF Output Specification Tables to highlight a clear distinction between “general support” to the community and the more formal, pre–planned support to specific government departments and agencies. It encompasses the mutually agreed training, operations and tasks that the NZDF conducts, and those being developed, with other government departments and agencies. MAO&T is mainly concerned with the New Zealand EEZ/maritime environment of New Zealand, including border control. The Navy and Air Force, in particular, work closely, individually and/or collectively with these departments and agencies such as the Ministry of Fisheries, NZ Customs Service, NZ Police, DOC and the Maritime Safety Authority of New Zealand (MSA). The scale and frequency of such tasks, unless pre–programmed, are not forecast.

Government and Community Support Provided

The NZDF provided a wide range of services in support of foreign and defence policy objectives, other government departments and the community. This included the following activities:

Agency Support Provided By NZDFNZ Police (excluding SAR) The NZ Army provided a variety of military support to the

NZ Police including assistance with traffic control, vehicle checkpoints, traffic accidents, scene assistance, and domestic disturbances during the reporting period. Accommodation, catering, facilities and logistic support were also provided at various times, as was daily catering for Police staff at the NZ Police Dog School.

RNZAF 3 Squadron Iroquois helicopters flew 191 hrs in support of various NZ Police operations and training requirements.

RNZAF Boeing 757 and C130 Hercules aircraft flew four flights – one in Jul 04, one in Oct 04, one in Feb 05 and one in May 05 – transporting NZ Police personnel, equipment and charitable freight to Honiara, Solomon Islands involving 45.1 flying hours.

A RNZAF Boeing 757 aircraft also transported freight from Christchurch to Wellington in Feb 05 involving 0.9 flying hours.

The RNZN provided a Sail Training Craft and crew for Risk Response Group training.

Land, Sea and Air SAR (in support of NZ Police, RCCNZ or other requesting agency)

RNZAF P–3K Orion crews conducted 27 tasks in the Taranaki Bight, Cape Reinga (2), NE Bay Of Islands, American Samoa (2), Fiji (6), Tonga (5), Cook Islands, Minerva Reef, Nuie, Samoa (2), Kiribati and Campbell Island areas. Total time flown was 257.1 hours. Communications staff support totalled 64 mandays.

RNZAF helicopters flew 65.5 hours in support of NZ Police SAR tasking and training.

An RNZAF C130 Hercules also conducted a task in the Fiji area flying a total of 18.7 hours.

RNZAF Woodbourne personnel assisted local Police with locating a hunter lost in the Nydia Bay area and NZ Army personnel assisted with a search for a missing woman in the Rimutaka State Park.

The Rescue Coordination Centre New Zealand (RCCNZ) called on the services of RNZAF Liaison Officers on 44 occasions involving 74 man–days.

The NZ Army and RNZAF provided logistics support to NZ police on two occasions in Nov 04 and one in Mar 05.

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Agency Support Provided By NZDFMinistry of Civil Defence and Emergency Management

NZDF personnel over the periods 18–28 Jul, 28–29 Sep 04 and 18–20 May 05 supported Civil Defence emergencies (Operation AWHINA) due to extensive flooding in Eastern Bay Of Plenty, Northern Wairarapa and Tauranga respectively. Support provided across these operations included searching for missing persons, evacuation of personnel, sandbagging, provision of transport assets, and clean up assistance. The Greymouth Army Hall was provided as a Depot after local Tornado damage. RNZAF Iroquois helicopters flew 9 hours in support of Op AWHINA.

NZDF personnel attended Civil Defence meetings in support of local councils in the Bay Of Plenty, Hutt Valley and Ruapehu regions during the reporting period, provided facilities for Auckland Coastguard and supported NZ Police for SH1 road closures at Waiouru. NZ Army personnel also attended Ruapehu Southern Disaster Management Lahar Plan meetings. These activities involved a total of 15 man–days.

Department of Conservation (DOC) RNZAF Iroquois helicopters flew 43.4 hours in support of hut maintenance within Nelson Lakes Region, North West Ranges and the Mt Roberts ski field during Aug – Sep 04 and Jan – Mar 05. The NZ Army also provided 50 man–days and the use of facilities for three days in Mar 05.

Airlift assistance was also given for the removal of car bodies and loose car parts at Whiteria Park, Titahi Bay 21 – 22 Sep 04.

RNZAF P3K Orion aircraft conducted three Raoul Island mail drops in Nov 04, Jan 05 and May 05, which involved 10 hours flying time.

HMNZS Manawanui conducted a resupply of Raoul Island in May/Jun 05 involving 10 sea–days and 220 man–days.

NZ Army personnel assisted with the Kaimanawa Horse muster which involved 7 man–days.

Department of Corrections NZ Army and RNZAF provided lecture facilities for 18 days and five days respectively.

Environmental Risk Management Authority

Nil

National Rural Fire Authority NZ Army Units at Linton and Waiouru and RNZAF Base Auckland attended 315 callouts in support of the NZ Fire Service, covering motor vehicle accidents, fire alarm activations, domestic and scrub fires, medical assistance, hazardous substance spillages and a missing child search.

The RNZAF Iroquois helicopters flew 4.6 hrs in support of Rural Fire Fighting training in Auckland, Christchurch and Greymouth.

The RNZN and RNZAF provided facilities, logistics support and training during Nov 04, Feb/Mar 05 and Apr–Jun 05.

Ministry Of Fisheries The RNZAF provided 31.8 Helo flying hours in support of MIN FISH operational tasking in the North Island. RNZAF Boeing 757 and Hercules C130 aircraft transported Ministry of Fisheries personnel within NZ and between NZ, Honiara, Darwin, and Dubai during the period flying a total of 73.1 hours. 3 Sqn RNZAF provided 13.2 flying hours in Apr 05 for operational tasking.

HMNZ Ships Resolution and Manawanui conducted eight days patrolling combined with training within the NZ coastal area during Apr and May 05.

NZ Army provided training facilities and logistical support in May 05.

National Maritime Coordination Centre.

(includes all combined Multi–Agency Tasking)

HMNZ Ships Hinau, Kahu, Kiwi, Manawanui, Moa, and Wakakura provided a total of 83 days surveillance and enforcement tasking in the NZ coastal areas during the period.

RNZAF P–3K Orions conducted 46 surveillance patrols in the NZ EEZ, four in the Ross Sea on behalf of the National Maritime Coordination Centre and four NZ EEZ patrols en–route to OP NORPAT destinations. Total flying hours were 240.9. NZDF Operations, communications and intelligence staff provided 175 mandays support in support of all surveillance patrols.

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Agency Support Provided By NZDFMinistry of Foreign Affairs and Trade (MFAT)

HMNZ ships Te Kaha and Endeavour supported the Prime Minister of NZ visit to the Tokelau Islands during Aug 04 followed by support to Defence diplomacy activities with port visits to Darwin; Pelabuhan, Malaysia; Singapore; Sattahip, Bangkok; Ho Chi Minh City, China; Hong Kong and Manila, Philippines for a total of 30 days. During the period Apr to Jun 05 HMNZ ships Te Mana and Endeavour conducted Defence diplomacy visits to Malaysia; Singapore; Nagoya, Japan; Vladivostok, Russia and Shanghai, China covering a period of 31 days each.

HMNZS Resolution conducted Defence diplomacy visits in Apr and May 05 to Tonga, Samoa, Fiji, Cook Islands, Tokelau Islands and Nuie covering a period of 19 days.

HMNZS CANTERBURY conducted Defence Diplomacy activities with port visits to Sydney and Newcastle during Sep 04.

A RNZAF P–3K Orion aircraft conducted ten Exclusive Economic Zone (EEZ) surveillance patrols in support of Pacific Island Nations (Tonga, Cook Islands, Fiji, Nuie, Samoa, Vanuatu, Kiribati, Solomon Islands, Marshall Islands, Federated States of Micronesia, Nauru, Papua New Guinea, Palau, and Tuvalu) and the Forum Fisheries Agency. A total of 321.7 hours were flown in the South Pacific. NZDF communications, operations and intelligence staff provided support to these flights totalling 206 mandays.

RNZAF Boeing 757 and Hercules C130 aircraft transported charitable freight to the Cook Islands, Nuie, Solomon Islands, East Timor, Palau, Fiji, and Dubai. Cargo for the NZ High Commission in the Solomon Islands, Nuie, Singapore, USA and the DA in Malaysia was also transported during the reporting period. A total of 225.5 hours was flown.

RNZAF Boeing 757 aircraft supported the Pacific Trade Mission visits to Fiji, PNG, and Guan, including the South Pacific of the Arts activities in Palau, Micronesia during Jul 04 flying a total of 43.4 hours.

RNZAF Boeing 757 and Hercules C130 aircraft transported freight and personnel within NZ and to/from the USA, Australia, Fiji, Nuie, the Cook Islands, Indonesia and the Solomon Islands. A total of 65.7 hours was flown by 757 and 145.5 hours by C130 aircraft.

Government House NZDF personnel provided Guards, Bands and Maori Cultural groups as ceremonial support to the Governor General for Credential Ceremonies during Aug, Sep, Nov and Dec 04 as well as Feb and Mar 05. Transport for NZDF personnel was also provided.

The RNZAF Central Band also provided support for a function at Government House during the visit of HRH the Prince of Wales.

RNZAF King Air VIP air transport conveyed the Governor General of NZ between a numbers of cities/venues during the period. A total of 28.8 hours were flown.

RNZAF Boeing 757 transported freight from Penang to Wellington and Whenuapai and Wellington for the Governor General. A total of 44.9 hours were flown.

Ministry Of Health NZ Army provided specialist advice to the Chemical, Biological, Radiological Explosive (CBRE) work group which totalled 2 mandays.

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Agency Support Provided By NZDFDepartment of Internal Affairs NZDF personnel provided ceremonial and logistical support

(Guards, Gun Salutes, Bands, Maori Cultural Groups, Accommodation, Transport etc) for visits by foreign Heads of State and other dignitaries including the visit to NZ by the Prime Ministers of Australia, Bahrain, Malaysia, Norway, Sweden, Thailand, Vietnam, HRH the Prince of Wales, Presidents of Bosnia and Herzegovina, Indonesia, the Governor General of The Solomon Islands and the Australian Minister of Defence. Over 4000 mandays was provided.

RNZAF King Air, Boeing 757 and C130 aircraft provided 7.8; 53.3 and 32.9 hours flying respectively – which includes Op Gallipoli.

NZDF personnel were involved in a vast range of planning and ceremonial activities for OP VALHALLA – the Return of the Unknown Soldier. RNZAF Boeing 757 and C130 aircraft totalled 63 hours and 4.8 hours flying respectively.

The RNZAF also provided 10.6 Helo flying hours in support of SAR requirements for the Royal Tour.

NZDF personnel and transport were also involved in Waitangi Day, VE Day, Queens Birthday, ANZAC Day, Battle of Crete, Korean War and Commonwealth Day ceremonial events. Man–days involved were 83.

Maritime Safety Authority Of New Zealand (MSA)

HMNZS MANAWANUI provided 12 days support in Oct 04 to locate the fishing vessel “Iron Maiden” in the area off Cape Reinga.

In Apr 05 an RNZAF P3K Orion assisted in the location of toxic chemicals dumped at sea near the Poor Knights Islands. Support involved 6.5 Flying Hours and provision of Communications and Liaison officer staff time to the tune of 2.5 mandays.

New Zealand Customs Service HMNZ Ships Manawanui, Kahu and Wakakura provided 24 days of patrols within NZ coastal waters.

The RNZAF provided training facilities and logistic support in Apr 05.

Department of Prime Minister and Cabinet (DPM&C)

RNZAF Aircraft transported the Prime Minister, other Cabinet Ministers, dignitaries, members of select committees and other Government Departments to Niue, Samoa, The Tokelaus, Solomon Islands or within NZ during the period. Boeing 757 flying hours totalled 38.9; C130 1.2 hrs; King Air 61.9 hrs and 3 Squadron 7.8 hrs.

HMNZS TE KAHA provided transport, logistical and ceremonial support for 4 days to the Prime Minister and party for her visit to the Tokelau Islands.

Explosive Ordnance Disposal (EOD) NZDF Explosive Ordnance Disposal (EOD) personnel attended 90 callouts during the period. Items dealt with included cartridge cases, detonators, thunder flashes, power gel, projectiles, rocket launchers, distress and flare rockets, various types of fragmentation grenades and ammunition, as well as practice and Mortar bombs.

Support to the NZ Antarctic Programme (NZAP)

Up to 69 NZDF personnel supported both Antarctic New Zealand and the United States Antarctic Programme (USAP) Logistics Pool over the period Aug 04 to Feb 05, providing air transport, logistics, personnel support aircraft and crews for Emergency Rescue Support (ERS) and Search and Rescue (SAR) plus terminal operations at Harewood and McMurdo terminals.

Two RNZAF C130’s completed 11 missions to the Antarctic flying a total of 166.8 hours.

Disaster Relief (South Pacific) From 16 May to 30 Jun 05, NZ Army provided a 15 person reconnaissance team to assess cyclone damage in Nuie and where NZ construction aid might be provided.

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Agency Support Provided By NZDFDisaster Relief (South East Asia) An RNZAF Boeing 757 and C130 Hercules aircraft along with

enhanced crews and maintenance staff, Communications, Medical, Air Loading and PR personnel were provided as NZDF’s initial response to the international disaster relief effort resulting from the tsunami in SE Asia on 26 Dec 04. A maximum of 61 NZDF personnel were deployed at any one time. The mission downsized over the period Feb–Mar 05 with the final four movements staff returning to NZ on 30 Mar 05.

RNZAF Boeing 757 and C130 totalled 117.3 and 278.3 flying hours respectively. The C130’s carried 1664 passengers and 537,574LBs freight and the B757, 361 passengers and 24,458KGs freight.

General Medical Assistance/Support Army Training Group Hospital staff in Waiouru provided medical support to the local community and St John Ambulance involving 424 emergency treatments which equated to 113 mandays.

Detection Of Pollution NilGeneral Community Support The Navy, Army and Air Force provided a wide range of support to

communities throughout New Zealand. This included the Arthritis Association, Cancer Society, Child Cancer Foundation, Hospice Foundation, IHC, Life Education TrustYouth Life Skills, NZ Blood Service, Heart Foundation, Lions Clubs, Plunket Society, Red Cross, RSA’s, Waitangi Committee, Citizenship ceremonies, Rotary Clubs as well as activities for schools, sports clubs, sport events, air shows, charities, veterans groups, and youth organisations. Activities included ceremonial, band performances, logistics support, funeral support, Base visits, Marae visits and training. In excess of 2500 mandays has been provided over the period. In Apr 05, NZ Army provided seven mandays in assisting with the making of a Coroners documentary.

RNZAF Boeing 757 and C130 flew 2 and 10 hours respectively to deliver RSA Xmas parcels to NZDF deployed personnel. A C130 also flew 5.1 hours delivering charitable freight to the Cooks Islands Rotary Club and, in Jun 05, 2.3 hours in support of TVNZ. The RNZAF also provided 1.2 Helo flying hours in support of a Field day and a Lions Rugby Match.

General Training Courses RNZN, NZ Army and RNZAF Units conducted training, pre–deployment training, various team building and workplace training courses for Auckland Coastguard, Airport police, Red Cross and NZ Police.

Above: NZ Army engineers undertaking a community assistance project

Below: RNZAF personnel load a C-130 Hercules aircraft with relief supplies

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SECTION 5Veterans’ Affairs New Zealand

Veterans’ Affairs New Zealand: Information and Management

Veterans’ Affairs New Zealand is the Government’s principal adviser on veterans’ issues. Veterans’ Affairs New Zealand is responsible for providing advice on, and facilitating the delivery of, a range of services to individual veterans and their families, in recognition of the needs generated as a result of the veteran’s service. To achieve this intent, Veterans’ Affairs New Zealand is responsible for the delivery of a wide range of services.

The services and entitlements provided to veterans are, in the main, inextricably linked to the broader health and social service systems framework. Veterans’ Affairs New Zealand works to maximise the potential of these systems to deliver services in a way that meets the needs of veterans.

As Veterans’ Affairs New Zealand does not ‘own’ all the services that it provides to meet the identified needs of veterans, it uses a brokerage model to manage the service delivery relationship between service provider and the veteran and the veteran’s family.

The portfolio Veterans’ Affairs comprises two Votes:

– Vote Veterans’ Affairs – Defence. This vote is administered by Veterans’ Affairs New Zealand and includes the provision of policy advice on, and administration of, a wide range of issues relating to veteran entitlements care and recognition.

– Vote Veterans’ Affairs – Work and Income. This vote is administered by the Ministry of Social Development, and includes the processing and payment of War Disablement and Veterans’ Pensions and concessions, and Rehabilitation Loan Scheme payments. This vote will be covered in the Ministry of Social Development Annual Report to Parliament.

Accountability Arrangements

The Chief of Defence Force, as Chief Executive of the New Zealand Defence Force, is responsible to the Minister of Veterans’ Affairs for the financial management of Veterans’ Affairs New Zealand under the Public Finance Act 1989. The Director, Veterans’ Affairs, on behalf of the Chief of Defence Force, is responsible to the Minister of Veterans’ Affairs for the delivery of the Veterans’ Affairs New Zealand outcomes and outputs.

As a semi–autonomous body within the New Zealand Defence Force, Veterans’ Affairs New Zealand is subject to the accountability and monitoring provisions of the Public Finance Act 1989 but does not come under the auspices of the State Sector Act 1988.

Primary Legislation

The primary legislation associated with Veterans’ Affairs New Zealand is contained in:

The War Pensions Act 1954

The Burial and Cremation Act 1954

The Patriotic and Canteen Funds Act 1947

The Veterans’ Affairs Act 1999

The Defence Act 1990

Links with the Government’s Policy And Outcomes

The provision of specific services to veterans, in recognition of their contribution to the development of New Zealand’s national identity, contributes to Key Government Goal 1: “Strengthen National Identity”.

The provision of policy advice on veterans’ related issues, the co–ordination of the services provided to veterans and their families by other government departments and agencies, facilitating access to services within the broader community and the development of constructive working relationships with veterans’ organisations, contributes to Key Government Goal 3: “Maintain Trust in Government and Provide Strong Social Services”.

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The work undertaken by Veterans’ Affairs New Zealand and the Ministry of Social Development contributes to achieving the following outcomes for veterans:

– The veterans’ perspective is considered as part of government decision–making on issues that impact on their lives.

– Eligible veterans and their dependants have access to the appropriate services in recognition of their Service.

– The community will be aware of the role veterans played and continue to play in developing New Zealand as a nation.

Links with other Government Departments / Agencies

Veterans’ Affairs New Zealand primary relationship is with the Ministry of Social Development. A Service Delivery and Policy Agreement defines this relationship.

The agreement specifies the role of each organisation, in relation to the provision of services to veterans in the War Disablement and Veterans’ Pensions area, and defines the parameters around the sharing of information and how communication over veterans’ issues will be managed.

Contracts For Service

Veterans’ Affairs New Zealand maintains a number of contracts for the manufacture and installation of plaques and headstones, the maintenance and development of Services Cemeteries throughout New Zealand, and the provision of services under the auspices of case management.

Outcomes: Veterans’ Affairs New Zealand

The specific initiatives addressed within the Veterans’ Affairs New Zealand outcomes for 2004/2005 are reported below.

The veterans’ perspective is considered as part of government decision – making on issues that impact on their lives.

Veterans’ Affairs New Zealand continues to work to raise its profile and to ensure that other agencies recognise that Veterans’ Affairs New Zealand needs to be consulted on issues that may impact on the veteran community. In the majority of cases Veterans’ Affairs New Zealand is now included in consultation over a variety of issues that are likely to have impact on the veteran community.

Veterans’ Affairs New Zealand continues to work to provide information to and work with veterans groups. The Director of Veterans’ Affairs/Secretary for War Pensions has attended a number of meetings of various veterans groups and ex–service associations such as Korean Veterans Association, NZ J Force & BCOF Association, Ex Vietnam Services Association, 28 Maori Battalion Association, Kings Empire Veterans Association and various Returned Services Association clubs around New Zealand. At these meetings their issues and concerns are discussed and information on entitlements and ways in which Veterans’ Affairs New Zealand can assist veterans is provided. Welfare officers from these groups are encouraged to refer people to and work with the case management service. Veterans’ Affairs New Zealand works closely with representatives of local ex–service and veterans organisations as part of the administration of Services Cemeteries.

Veterans’ Affairs New Zealand is constantly seeking to improve the quality of the advice it provides to ensure that it meets the characteristics of quality policy advice.

Veterans’ Affairs New Zealand works closely with and is actively involved in a collaborative grouping of Veterans’ Affairs agencies from Australia, Canada, the United Kingdom and United States of America. This forum provides a number of opportunities to share information and current practices. New Zealand is currently the lead on the provision of case management.

Eligible veterans and their dependants have access to the appropriate services in recognition of their Service.

The application of the War Pensions Act 1954 is constantly being reviewed to ensure that it accurately reflects the intent of the reverse onus of proof provisions in the legislation.

Veterans’ Affairs New Zealand is continually reviewing the way it provides information to the veteran community and other agencies that provide support and assistance to veterans in their communities. Work has been done to ensure that letters clearly outline decisions and the justification for those decisions. Work has commenced on reviewing forms to ensure that they are easy to fill out and contain sufficient information to allow veterans to make an informed choice when applying for entitlements. As policy is revised, information sheets are produced to support the implementation of that policy.

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The Secretary for War Pensions reviews 10% of the decisions made by the War Pensions Claims Panels to ensure consistency of decision making. Any issues identified as a result of this process are addressed by the Secretary and form part of the claims panels training process. Any veteran with any query relating to a War Disablement or Veterans’ Pension can raise the query with the Secretary for War Pensions.

The operational policy surrounding Services Cemeteries is constantly being reviewed to ensure that it accurately reflects the intent of the legislation. The ex–service memorial order form has been revised to provide more detailed information on the types of memorials that are available and the process of ordering. The aim is to enable veterans and their families to make an informed choice when considering options for memorials.

Veteran’s Affairs New Zealand is constantly working with War Pension Services and the Ministry of Social Development to improve the seamlessness of the service, and to look for ways to improve the service provided to veterans. The administration of war pension’s medical treatment has been transferred from War Pensions Services to Veterans’ Affairs New Zealand. This allows for all those receiving on going treatment for any disability to be case managed. Integrating treatment administration with case management improves the seamlessness of service by ensuring that the provision of medical treatment is not seen in isolation of the other support being provided to the veterans. It allows for the issues facing veterans to be seen holistically.

The Director of Veterans’ Affairs/Secretary for War Pensions has attended a number of meetings of welfare officers from various veterans groups and ex–service associations such as Korean Veterans Association, NZ J Force & BCOF Association, Ex Vietnam Services Association, 28 Maori Battalion Association, Kings Empire Veterans Association and has taken part in Returned Services Association regional welfare officer training seminars around New Zealand. At these meetings and seminars information on the entitlements that are available to veterans is explained and the ways to access these entitlements.

Work has been done on the concept of health and lifestyle information seminars. The increase in numbers seeking case management has meant that resources could not be made available in the 2004/05 to further this initiative.

The community will be aware of the role veterans played and continue to play in developing New Zealand as a nation.

Veteran’s Affairs New Zealand developed the material for the Prime Minister’s essay competition for the Gallipoli commemorations. This material was distributed to all secondary schools. In addition, Veterans’ Affairs New Zealand make educational material available to schools to support ANZAC Day programmes.

Veterans’ Affairs New Zealand is responsible for co–ordinating government participation in key commemorations. In the 2004/05 year a major commemoration was held in Gallipoli to commemorate the 90th Anniversary of the Gallipoli Landings.

Veterans’ Affairs New Zealand was involved in the management of the events at Gallipoli with the Commonwealth Department of Veterans Affairs Australia. In addition, Veterans’ Affairs New Zealand organised and provided support for a group of 35 veterans, representative of New Zealand’s involvement in World War ll and beyond, and ten school children, the successful entrants in the Prime Ministers essay competition, who attended the commemoration as part of the official party.

Work has also been undertaken on planning of, and preparation for the commemoration of the 60th anniversary of VJ Day. This will involve a pilgrimage of 80 World War ll Pacific veterans to the Pacific and a street parade and reception in Wellington.

In addition Veterans’ Affairs New Zealand administers funding for veterans groups to hold reunions and to veterans undertaking battlefield revisits. In the 2004/05 year funding was provided to 133 veterans to assist them to travel overseas to attend commemorations of events or units of which they were a part, and which had special significance to them. Veterans were funded to travel to commemorations marking the 60th anniversary of Trieste, VE Day commemorations in Europe, the Battle of the River Plate in Uruguay and to New Caledonia and Korea for ANZAC Day.

Funding has also been provided to five groups to assist with the organisation of New Zealand based events and reunions.

Veterans’ Affairs New Zealand has regular contact with veterans’ groups involved with Services Cemeteries and provides support for activities associated with Services Cemeteries. Work has been undertaken to promote participation in caring for Services Cemeteries and resources have been provided to community groups undertaking projects associated with Services Cemeteries.

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Statement of Objectives and Service Performance

Output Class D1: Policy and Administration

Description

Under this output class the Minister of Veterans’ Affairs purchases the provision of policy advice on, and administration of, a wide range of issues relating to veterans’ entitlements care and recognition.

This includes:

– Policy advice to the Minister of Veterans’ Affairs on veterans’ entitlements, care and recognition, including legislation, major policy proposals and the development of new initiatives of significance to the sector.

– Ministerial servicing and support – briefings, draft responses to ministerial correspondence and Parliamentary questions, Official Information Act enquiries, Ombudsman enquiries.

– The provision of administration for the War Pensions Advisory Board and the War Pensions Appeal Board.

– The administration of the Rehabilitation Loan Scheme.

– The administration of the contracts for service relating to the maintenance and development of Services Cemeteries.

– Quality audits of the maintenance and development work carried out in Services Cemeteries.

– The co–ordination of New Zealand’s participation in the commemoration of significant military anniversaries

Above: Members of the New Zealand official party at the 90th Anniversary of the Gallipoli Landings

Below: Successful essay competition entrants at Gallipoli to commemorate the 90th Anniversary of the Gallipoli Landings

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Performance


Provide policy advice to the Minister of Veterans’ Affairs on veterans’ entitlements, care and recognition.

– The number of occasions that the Minister will seek advice, or the CDF feels need to offer it, will depend on a range of factors beyond the control of Veterans’ Affairs New Zealand.

– The anticipated range of key submissions includes the following:

– Statutory Reports to Parliament 2

– Submissions to Cabinet 5 – 12

– Special Briefing Papers 20 – 30

Both written and oral advice was provided to the Minister throughout the year.

Key submissions were made as follows:

Statutory Reports to Parliament 2

Submissions to Cabinet 5

Special Briefing Papers 39Provide Ministerial servicing and support

– The anticipated range of written submissions includes the following:

– Ministerial Correspondence 200 – 300

– Parliamentary Questions 50 – 100

– Select Committee Reports 2 – 5

Draft replies to Ministerial Correspondence 285

Draft replies to Parliamentary Questions 46

Select Committee Reports 3Provide administration for the War Pensions Advisory Board and War Pensions Appeal Board.

– Meetings of the War Pensions Advisory Board will be arranged by the Secretary for War Pensions as and when required.

– Meetings of the War Pensions Appeal Board will be arranged by the Board Secretary as required

The War Pensions Advisory Board met on one occasion during the year. This was due to the fact that there was difficulty establishing a quorum for meetings.

The War Pensions Appeal Board met on nine occasions during the year

Provide management of the Rehabilitation Loan Scheme.

– The monitoring of loan payments will be within negotiated parameters.

A total of 24 loan schedules were cleared for payment.

Administration of maintenance agreements and contracts for service relating to the maintenance and development of Services Cemeteries.

– An estimated 178 maintenance agreements will be administered.

– An estimated 150 (in the range of 100 – 200) contracts for service will be administered.

Maintenance agreements were put in place for all 181 cemeteries with 50 cemetery authorities.

66 contracts for service for capital works were signed and administered.

2 contracts for manufacture were administered.

51 contracts for installation were administered.Quality audits of Services Cemeteries.

– Quality audits will be undertaken in the 178 Services Cemeteries in New Zealand on a rotational basis over a three–year period.

There were 80 quality audits of Services Cemeteries carried out as part of the three–year cycle.

Co–ordinate New Zealand’s participation in the commemoration of significant military anniversaries.

– The number of anniversaries that New Zealand will be involved in will depend on a range of factors beyond the control of the Veterans’ Affairs New Zealand. An estimated range of 2 to 4 events will require co–ordination.

There was participation in one commemorative activity during the financial year. This was the 90th anniversary of the Gallipoli Landings at Gallipoli.

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Targets Performance AchievedQuality

The Minister will expect expert advice to be delivered in accordance with the agreed statutory timeframes and in accordance with the defined characteristics of quality advice: purpose, logic, accuracy, options, consultation, practicality and presentation.

Submissions will be delivered in accordance with the agreed timeframes and in accordance with Cabinet Office guidelines.

The aim is the provision of a comprehensive service: the capacity to react quickly; the regular evaluation of policy for effectiveness in achieving required outcomes and timely briefings on significant issues; and support for the Minister, as required, in Cabinet Committees, Select Committees and in the House.

– Replies within 20 days of receipt of requests, if not otherwise specified.

– 95% of first drafts of all policy papers accepted by the Minister.

– 90% of all other responses accepted without amendment.

Advice was delivered within the agreed or statutory timeframe and in accordance with the defined characteristics of quality advice.

Submissions were delivered in accordance with the agreed timeframes and met Cabinet Office requirements.

Other government agencies and affected parties were consulted, and possible objections to proposals were identified.

91% of all responses were completed within requested timeframes.

The Minister accepted 100% of first drafts of all policy papers.

98% of all responses were accepted without amendment.

All arrangements and actions will meet the War Pensions advisory Board and the War Pensions Appeal Board’s requirements.

– 95% of all actions defined by the Boards will be completed within 20 working days, if not otherwise specified.

The decisions of the War Pensions Advisory Board were actioned within the agreed timeframe.

Once a decision had been made by the War Pensions Appeal Board, claimants were notified within the agreed timeframe.

The information provided in relation to the Rehabilitation Loan Scheme will be of sufficient quality to enable the Ministry of Social Development to make payments.

The information was provided to the Ministry of Social Development in a timely fashion and was of sufficient quality to enable payments on Rehabilitation Loans to be made.

Contracts for the maintenance and development of Service Cemeteries to be current, legally correct and clearly specify maintenance and development requirements.

– There will be no breaches of contracts by Veterans’ Affairs New Zealand.

– Serious breaches of contract by contractors will be managed as per the conditions in the contract.

All contracts were current, legally correct and clearly specified the maintenance and development requirements.

There was one breach of contract by a contractor. The contract was cancelled and retendered. There were no breaches of contact by Veterans’ Affairs New Zealand.

Quality audits will ensure that the specifications outlined in contracts have been met.

– Services Cemeteries standards are being maintained to the satisfaction of Veterans’ Affairs New Zealand, Local Authorities, the RSA and veterans’ representative organisations.

Services Cemeteries are being maintained to the satisfaction of Veterans’ Affairs New Zealand, Local Authorities, the RSA and veterans’ representative organisations.

The Minister will expect participation in commemorative events to be delivered in accordance with agreed parameters and budget.

– The event co–ordination will be to the satisfaction of the key stakeholders.

The co–ordination of commemorative events was to the satisfaction of the key stakeholders.

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Costs for Output Class D1 (GST Exclusive)

Actual 2003/04




Actual 2004/05

($ million)

Expenditure0.395 Personnel 0.550 0.278 0.2851.053 Operating 0.909 0.913 0.9171.448 Total Expenses 1.459 1.191 1.202


– Revenue Other – – –1.439 Total Revenue 1.459 1.191 1.191

(0.009) Net Surplus (Deficit) – – (0.011)

Above: Veterans at Gallipoli during the 90th Anniversary of the Gallipoli Landings

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Output Class D2: Services to Veterans

Description

Under this output class the Minister of Veterans’ Affairs purchases the assessment of entitlements and benefits and the provision of appropriate services.

This includes:

– The assessment and review of entitlements and benefits – War Disablement Pensions, Veterans’ Pension and burial in Services Cemeteries.

– The provision and installation of ex–service memorials for eligible veterans.

– The provision of Case Management for veterans and their families.

Performance


Assess and review entitlements to War Disablement Pensions and Veterans’ Pensions.

– An estimated 10,000 (in the range 9500–10,500) new or reviewed applications for War Disablement Pensions to be assessed or reviewed by the War Pensions Claims Panels.

– An estimated 300 (in the range of 250 – 350) decisions on applications for War Pensions will be reviewed by the National Review Officer.

– An estimated 250 (in the range of 200 – 300) reviews will be undertaken by the Secretary for War Pensions.

– An estimated 35 (in the range of 25 – 35) decisions will be reviewed by the War Pensions Appeal Board.

– An estimated 30 (in the range of 25 – 35) decisions on eligibility for Veterans’ Pension will be made by the Secretary for War Pensions

The War Pensions Claims Panels considered applications for 15,631 disabilities. Of those disabilities 11,920 decisions involved the consideration of new disabilities and 1,964 decisions involved the review of the current level of War Disablement Pension paid for an accepted disability.

As the veteran community ages and their disabilities become more apparent, it is expected that a greater number of applications will be made to have specific disabilities covered by a war pension.

The National Review Officer undertook 465 reviews of the decisions made on War Disablement Pension application and considered 301 reopenings of previous declined War Disablement Pension claims, at the request of the veterans concerned.

The Secretary for War Pensions undertook 443 reviews at the request of the veterans concerned.

The War Pensions Appeal Board considered 58 cases at the request of the veterans concerned.

The Secretary for War Pensions undertook 166 reviews of eligibility for Veterans’ Pensions at the request of the veterans concerned. The higher than anticipated number of reviews of eligibility for Veterans’ Pension is a result of the introduction of the abatement regime.

Quantity:Provision of plaques and headstones for eligible veterans.

– Administration of applications for ex–service memorials. This includes arranging supply and installation.

– An estimated 2,300 (in the range of 2,000 – 2,500) applications for plaques and headstones will be approved.

Applications for plaques and headstones were administered within the agreed terms of the contract for supply.

2274 orders for memorial plaques and headstones were completed.

Provide Case Management.

– An estimated 1500 (in the range of 1000 – 2000) veterans will be case managed.

2928 veterans were case managed using a holistic approach. Their needs were individually assessed and appropriate care put in place to enable them to stay in their own homes.

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Targets Performance Achieved– The veterans needs will be individually assessed

and services and supports from within the veteran’s community will be put in place where required.

– An estimated 70 (in the range of 60 –80) veterans’ families will be provided with counselling.

– An estimated 30 (within the range of 25 –35) children of Vietnam and Operation Grapple veterans will be provided with additional health services.

The service provided support for the veteran and the veteran’s family from within the veteran’s own community.

241 veterans’ families were provided with counselling and on going support.

41 children of Vietnam and Operation Grapple veterans were provided with additional services. This includes 2 cases of spina bifida and 2 cases of cleft lip/palette.

Assessments and Reviews of entitlements will be conducted against extant policy.

– 95% of assessments will be completed within 10 working days of receipt by the war pensions claims panel.

– 95% of reviews will be completed within 3 months of receipt by the National Review Officer or the Secretary for War Pensions.

– 95% of Appeals will be heard within 3 months of receipt by the War Pensions Appeal Board.

– 95% of decisions Veterans’ Pension will be completed within 1 month of receipt by the Secretary for War Pensions.

Assessments and reviews were conducted against extant policy.

The War Pensions Claims Panel completed 100% of assessments and reviews for a War Disablement Pension within 10 working days of receipt.

73% of reviews by the National Review Officer and the Secretary for War Pensions were completed within 3 months of receipt. Performance in this area is below the quality specification due to the volume of work. It was estimated that the NRO would consider between 200 – 300 reviews, she undertook 465 reviews and considered 301 reopenings.

It was estimated that the Secretary for War pensions would consider 200– 300 reviews, she undertook 443.

No appeals were heard by the War Pensions Appeal Board within 3 months of receipt.

As a result of review of the War Pensions Appeal Board there has been a change in personnel on the Board with a new Chair being appointed and deputies to the membership of the Board being appointed. The Board is being put onto a regular schedule of meetings. The new Chair is currently working through cases adjourned by the previous Board. The new Chair has increased the number of cases heard at each sitting from 4 to 9 per sitting. As a result of these actions the Board’s performance should improve.

85% of reviews of Veterans’ Pension were completed by the Secretary for War Pensions within 1 month of receipt. Performance in this area is below the quality specification due to the volume of work. It was estimated that the Secretary for War Pensions would consider between 25 –35 reviews of Veterans Pension, she undertook 166.

The manufacture of plaques and headstones will meet technical specifications and be manufactured in accordance with agreed contract standards.

Decisions on eligibility will be made within legislative parameters.

– 99.5% of ex–Service Memorials will be factually correct, technically correct and be correctly installed.

– 75% of ex–Service Memorials to be manufactured and installed within four months (where correct documentation has been supplied with the application).

The manufacture of plaques and headstones was in accordance with agreed contract standards.

Decisions on eligibility were made within legislative parameters.

Of the 2274 orders completed, 9 required replacement at Veterans’ Affairs New Zealand expense. This is an accuracy rate of 99.7%.

When correct documentation was supplied, 76% of all ex–service memorials were manufactured and installed within four months of receipt.

Case Management service provided will be based on the needs of the veteran and or their family.

The provision of the service will be timely.

The range of services provided will be appropriate to the needs of the veterans and or their family.

A holistic approach will be taken to the provision of services and support.

The service provided was based on the professionally assessed needs of the veteran and or the family member seeking case management. This assessment is undertaken before services are put in place. The needs assessment is regularly monitored to ensure that needs continue to be met.

The positive feedback provided by veterans and their families indicated that the service was provided in a

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Targets Performance Achieved– The services provided will be to the satisfaction

of the veteran and or their family.timely manner.

A range of services was provided: counselling, personal care, home help, and assistance with additional medical care. The positive feedback provided by the veterans and, or family members, indicated that the range of services provided were appropriate to their needs and were to their satisfaction.

Veterans are encouraged to provide feedback on ways the service can be improved, and feedback is received from a variety of sources: veterans, veteran’s families, RSA Welfare officers and welfare officers from other veterans groups and service providers. This feedback is being used as a means of measuring whether the service is meeting the needs of veterans and their families and is incorporated into the development of the service.

A large number of veterans have been referred to the service by other veterans who are satisfied with the service and feel their friends would benefit from it.

There are processes in place if anyone wishes to lodge a complaint about any issues arising from case management.

Costs for Output Class D2 (GST Exclusive)

Actual 2003/04




Actual 2004/05

($ million)

Expenditure0.782 Personnel 0.769 1.041 1.0420.920 Operating 0.961 0.957 0.9601.702 Total Expenses 1.730 1.998 2.002

Revenue1.326 Revenue Crown 1.325 1.593 1.5930.403 Revenue Other 0.405 0.405 0.4241.729 Total Revenue 1.730 1.998 2.0170.027 Net Surplus (Deficit) – – 0.015

Wellington’s Cathedral of St Paul – Return of the Unknown Warrior

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Non–Departmental Output Class O1: Development and Maintenance of Services’ Cemeteries

Description

Under this output class the Minister of Veterans’ Affairs purchases the maintenance and development of Services’ Cemeteries.

Performance


Develop and maintain Services’ Cemeteries.

– All 178 Services’ Cemeteries will have a maintenance agreement specifying the maintenance standards in place.

– Contracts for capital works in Services’ Cemeteries to be managed in accordance with an agreed annual programme.

Maintenance agreements specifying the maintenance standards for Services Cemeteries. were put in place with 50 cemetery authorities covering 181 cemeteries.

Capital works were managed in accordance with the agreed programme. Of the 66 contracts for service that were agreed to as part of the capital works programme, 65 were completed and one was withdrawn to be completed in the 05/06 year.

Quality90% of all contracts for capital works and maintenance in Services’ Cemeteries to comply with agreed contract standards.

– Works to the satisfaction of Local Authorities, the RSA and veterans’ representative organisations.

98% of all contracts for capital works and maintenance in Services’ Cemeteries complied with agreed contract standards.

Works were to the satisfaction of Local Authorities, the RSA and veterans’ representative organisations.

Costs for Output Class O1 (GST Inclusive)

Actual 2003/04




Actual 2004/05

($ million)

0.807 Total Expenses 0.812 0.812 0.805

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Non–Departmental Output Class O2: Support for Veterans and their families

Description

Under this output class the Minister of Veterans’ Affairs purchases support for veterans and their families.

This includes:

– The provision of counselling for veterans’ families

– Reimbursement of out of pocket expenses for veterans’ children with specified conditions.

– Additional support for veterans to facilitate them remaining in their own homes for as long as possible.

Performance


Support for veterans and their families.

– The number of interventions put in place will depend on a range of factors beyond the control of the Veterans’ Affairs New Zealand. An anticipated range of 50 to 100 contracts for service will be put in place.

500 contracts for service for the provision of support for veterans and their families were put in place. This is an increase in the number anticipated as the number of veterans seeking case management increased.

Quality95% of all contracts for service to comply with agreed contract standards.

– The services provided will be to the satisfaction of the veteran and or their family.

100% of all contracts for service complied with agreed contract standards.

The services provided by the contracted provider were to the satisfaction of the veterans and their family.

Costs for Output Class O2 (GST Exclusive)

Actual 2003/04




Actual 2004/05

($ million)

0.221 Total Expenses 0.581 0.581 0.437

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SECTION 6Financial Statements

Statement Of Accounting Policies for the Year Ended 30 June 2005

Reporting Entity

The New Zealand Defence Force is a Government Department as defined by Section 2 of the Public Finance Act 1989.

These are the financial statements of the NZDF prepared pursuant to Section 35 of the Public Finance Act 1989 (as if that section had not been amended by the Public Finance Amendment Act 2004 (PFAA), in accordance with the transitional provisions in section 33 of the PFAA). The financial statements cover all the activities of the NZDF as set out in the 2004/2005 Statement of Intent including both those of Vote Defence Force and Vote Veterans’ Affairs – Defence. In addition the financial statements include information on the Crown activities that NZDF administers on behalf of Vote Veterans’ Affairs – Defence.

In these financial statements the New Zealand Defence Force is also referred to as the NZDF, and Veterans’ Affairs New Zealand is also referred to as VANZ.

Measurement Base

The financial statements have been prepared on a historical cost basis modified by the revaluation of certain property, plant and equipment.

Accounting Policies

The following particular accounting policies which materially affect the measurement of financial results and financial position have been applied.

Budget Figures

The Budget figures are those presented in Budget Night Estimates (Main Estimates). The Supplementary Estimates figures are the Budget Night Estimates of Appropriation as amended by the Supplementary Estimates and any transfer(s) made by Order in Council under Section 5 of the Public Finance Act 1989 (as if that section had not been amended by the Public Finance Amendment Act 2004 (PFAA)), in accordance with the transitional provisions in section 33 of the PFAA (Supplementary Estimates).

Revenue

The NZDF derives revenue through the provision of outputs to the Crown, for services to third parties and interest on funds held in overseas bank accounts. This revenue is recognised when earned and is reported in the financial period to which it relates.

Cost Allocation

The NZDF has determined the cost of outputs using a cost allocation system that is outlined below. The system attributes costs either directly to outputs or using an attribution method to allocate costs to outputs. The costing model:

– traces the direct costs of a force element (for example, a squadron, a frigate, a battalion) directly to an appropriate output ;

– attributes support unit costs to outputs using drivers that reflect the use of that activity to produce outputs; and

– attributes overhead costs to outputs using the percentage of that outputs gross operating budget (exclusive of capital charge) to the total gross budget (exclusive of capital charge) for all outputs;

The basis for allocation is set for the year. However, the allocation rules are reviewed if there is significant organisational change that is likely to alter the continued appropriateness of the rules.

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Inventories

Inventories are not held for resale and are comprised mainly of munitions, technical spares in support of property, plant and equipment, and consumable items.

Inventories are recorded at weighted average cost.

Appropriate allowance has been made for obsolescence. The obsolescence provision:

– includes specific provisions for obsolete inventory identified by considering the impact of any changes to capability, and by reviewing the high value inventory lines comprising the top 80% of inventory value;

– includes a general provision for low value inventory lines;

– includes amortisation of the value of contingency reserve stocks (CRS);

– excludes any inventory lines created within the last 2 years;

– excludes fuel, oil and lubricants which have a rapid turnover;

– generally excludes ammunition, except for CRS amortisation or specifically identified issues.

Debtors and Receivables

Debtors and receivables are recorded at their estimated net realisable value after providing for doubtful debts.

Operating Leases

The NZDF leases training aircraft, office premises, office equipment (mainly photocopiers) and computer software. As the lessor retains all the risks of ownership, these leases are classified as operating leases. Operating lease costs are expensed in the period in which they are incurred.

Property, Plant and Equipment (PPE)

Cost

PPE additions costing more than $5,000 are capitalised.

PPE is initially stated at cost. The initial cost comprises the purchase consideration and the costs directly attributable to bringing the asset to the location and working condition necessary for its intended use.

Valuation

Some classes of PPE are subject to revaluation to fair value on a 5–year cyclical basis. The 5–year cycle is subject to a reasonableness test on an annual basis to ensure it does not result in material differences from fair value. PPE purchased within two years of the last valuation date are not revalued, and are stated at depreciated historical cost. PPE purchased before 1 January 1991 that has not been revalued are stated at an internal valuation as at 1 January 1991.

Valuations use a market based approach where possible. Many building and Specialist Military Equipment assets are specialised in nature. Specialised assets are described as those assets that seldom, if ever, trade on the open market due to their specific purpose, design or locality. Where reliable market evidence is unavailable optimised depreciated replacement cost (ODRC) is considered an acceptable method to calculate fair value.

Land is stated at fair value at 30 June 2005 as determined by Beca Valuations Limited (Beca), an independent registered valuer. Major land holdings are individually revalued to fair value using a market–based approach as determined by an independent registered valuer. Minor land holdings are revalued to fair value by the independent valuer confirming the appropriateness of rating valuations. The value of land has been discounted where necessary to allow for any possible restrictions on title or environmental issues associated with the land.

Buildings with a net book value greater than or equal to $0.250 million are revalued to fair value, as determined by Beca, as at 30 June 2005. Buildings with a net book value less than $0.250 million have had an appropriate market or construction cost based index applied to revalue them to fair value at 30 June 2005.

Specialist Military Equipment (SME) with a net carrying value of $2 million or more, or groups of like assets with a total carrying value of $4 million or more are revalued every five years to an internally assessed valuation. The current valuation is 30 June 2003, and has been reviewed by Dunlop Stewart Limited, an independent registered valuer. All other SME is stated at depreciated replacement cost based on an internal valuation or depreciated historical cost.

All other PPE are recorded at depreciated historical cost.

The results of revaluing PPE are credited or debited to an asset revaluation reserve for that class of asset.

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Depreciation

Depreciation is charged on all PPE with the exception of freehold land, and capital work in progress. Depreciation is provided on a straight line basis so as to allocate the cost (or valuation) of the assets, less any estimated residual value, over their estimated economic useful lives. The estimated economic useful lives are within the following ranges:

Buildings 5 – 100 years

Specialist Military Equipment 5 – 55 years

Plant and Equipment 5 – 50 years

Office and Computer Equipment 5 – 20 years

Properties Intended for Sale

Properties intended for sale and withdrawn from use are stated at the lower of their cost/valuation and net realisable value.

Provision for Employee Entitlements

Provision is made in respect of the NZDF’s liability for annual, long service, and incentive leave and retirement benefits. Annual leave and retirement benefits are recognised as they accrue to employees. Long service and incentive leave are recognised after qualifying conditions have been met. Annual leave has been calculated on an actual entitlement basis at current rates of pay. Long service, incentive leave and retirement benefits have been calculated on an actuarial basis, based on the present value of future entitlements.

Statement of Cash Flows

Cash means cash balances on hand and held in bank accounts.

Operating activities includes cash received from all NZDF income sources and the cash payments made for the supply of goods and services.

Investing activities are those activities relating to the acquisition and disposal of non–current assets.

Financing activities comprise capital injections by, or repayment of capital and/or surplus to, the Crown.

Foreign Currency

Transactions covered by short–term forward exchange contracts are translated at the exchange rates specified in those contracts. Other foreign currency transactions are converted to the New Zealand currency exchange rate ruling at the date of the transaction.

Monetary assets and liabilities in foreign currencies at balance date are translated at the closing mid–point exchange rate ruling at that date, except for those arising on the amount held in the Federal Reserve Bank account in the United States of America. Exchange differences arising on the translation of monetary assets and liabilities in foreign currencies are recognised in the Statement of Financial Performance except those that are covered by short–term forward exchange contracts.

The Federal Reserve Bank account holds deposits on account of procurements. Unrealised exchange variations are deferred and included in the cost of subsequent purchase transactions.

Financial Instruments

The NZDF is party to financial instruments as part of its normal operations. These financial instruments include cash balances, receivables, payables and foreign currency forward exchange contracts. The NZDF enters into foreign currency forward exchange contracts to hedge foreign currency transactions. Any exposure to gains or losses on these contracts is generally offset by a related loss or gain on the item being hedged.

All financial instruments are recognised in the Statement of Financial Position except for foreign currency forward exchange contracts. All revenue and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance except for unrealised exchange variations on Federal Reserve Bank account transactions.

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Goods and Services Tax (GST)

The Statement of Unappropriated Expenditure and the Statements of Departmental and Non–Departmental Expenditure and Appropriations are inclusive of GST. The Statement of Financial Position is exclusive of GST except for Debtors and Receivables and Creditors and Payables, which are GST inclusive. All other statements are GST exclusive.

The amount of GST owing to the Inland Revenue Department at balance date, being the difference between Output GST and Input GST, is included in Creditors and Payables in the Statement of Financial Position.

Taxation

Government Departments are exempt from payment of income tax in terms of the Income Tax Act 1994. Accordingly no charge for income tax has been provided for. The NZDF is subject to fringe benefit tax (FBT) and goods and services tax (GST).

Commitments

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities

Contingent liabilities are disclosed at the point at which the contingency is evident.

Taxpayers’ Funds

This is the Crown’s net investment in the NZDF.

Changes in Accounting Policy

There have been no changes in accounting policies since the date of the last audited financial statements.

Procession through Wellington – Return of the Unknown Warrior

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Statement of Financial Performance for the Year Ended 30 June 2005

30 Jun 04

Actual ($000) Note

30 Jun 05

Actual ($000)

30 Jun 05

Main Estimates ($000)

30 Jun 05 Supplementary

Estimates ($000)

Revenue (See Note 1)1,517,503 Crown 2 1,528,415 1,530,323 1,528,415

8,706 Departmental 3 8,931 8,998 9,2196,502 Other 4 7,194 7,608 8,075

216 Interest 5 70 50 5025,483 Profit on sale of assets 1 40,762 – –

1,558,410 Total Revenue 1,585,372 1,546,979 1,545,759

Expenditure557,480 Personnel costs 6 571,363 554,929 572,682457,011 Operating costs 7 440,236 474,398 466,146229,392 Depreciation 8 232,345 229,869 225,111289,007 Capital charge 9 281,770 287,733 281,770

1,532,890 Total Output Expenses 1,525,714 1,546,929 1,545,70972,000 Other expenses 10 (3,266) – 25,000

1,604,890 Total Expenses 1,522,448 1,546,929 1,570,709(46,480) Net Operating Surplus/(Deficit) 62,924 50 (24,950)

Statement of Movements in Taxpayers’ Funds for the Year Ended 30 June 2005

30 Jun 04

Actual ($000) Note

30 Jun 05

Actual ($000)

30 Jun 05



Estimates ($000)

3,294,814 Taxpayers’ Funds brought forward as at 1 July

3,522,129 3,596,666 3,522,129

(46,480) Net operating surplus/(deficit) 62,924 50 (24,950)8,008 Increase/(decrease) in

revaluation reserves11 302,822 – –

(38,472) Total recognised revenues and expenses for the year

365,746 50 (24,950)

291,307 Capital contribution 25,483 – 25,483(25,520) Provision for repayment of

surplus to the Crown19 (59,658) (200) (50)

3,522,129 Taxpayers’ Funds as at 30 June 3,853,700 3,596,666 3,522,612

Note: The Accompanying accounting policies and notes form part of these Financial Statements

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Statement of Financial Position as at 30 June 2005

30 Jun 04

Actual ($000) Note

30 Jun 05

Actual ($000)

30 Jun 05



Estimates ($000)

Taxpayers’ Funds (See Note 1)3,030,339 General funds 11 3,015,293 3,110,253 3,030,822

491,790 Revaluation reserve 11 838,407 486,413 491,7903,522,129 Total Taxpayers’ Funds 3,853,700 3,596,666 3,522,612

Represented by:

Current Assets268,967 Cash at banks 135,063 88,112 120,769

20,132 Debtors and receivables 12 69,517 8,381 21,25017,921 Debtor–Crown 35,843 31,860 35,843

216,387 Prepayments to the Ministry of Defence

13 147,724 247,073 111,257

25,226 Prepayments other 27,206 27,607 25,226208,649 Inventories 14 216,292 222,891 217,061

31,775 Property, Plant and Equipment Identified for Disposal

15 15,061 – 27,346

789,057 Total Current Assets 646,706 625,925 558,753

Non – Current Assets2,936,614 Property, Plant and Equipment 16 3,455,240 3,163,344 3,097,726

66,997 Property, Plant and Equipment Identified for Disposal

15 22,884 – 89,021

3,003,611 Total Non – Current Assets 3,478,124 3,163,344 3,186,7473,792,668 Total Assets 4,124,830 3,789,268 3,745,499

Current Liabilities141,403 Creditors and payables 17 114,745 97,530 124,295

9,876 Provisions 18 8,324 9,289 8,81025,520 Provision for repayment of surplus

to the Crown19 59,658 50 50

17,465 Provision for employee entitlements

20 19,183 15,000 17,400

1,967 Deferred Payment 21 – – –196,231 Total Current Liabilities 201,910 121,869 150,555

Non – Current Liabilities14,709 Deferred Payment 21 15,678 17,928 15,32259,599 Provision for employee

entitlements20 53,542 52,805 57,000

270,539 Total Liabilities 271,130 192,602 222,8873,522,129 Net Assets 3,853,700 3,596,666 3,522,612


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Statement of Cash Flows for the Year Ended 30 June 2005

30 Jun 04

Actual ($000)

30 Jun 05

Actual ($000)

30 Jun 05 Main

Estimates ($000)


Estimates ($000)

Cash Flows – Operating ActivitiesCash provided from:

Supply of Outputs to:1,499,582 – Crown 1,510,493 1,514,393 1,510,493

8,601 – Departments 6,881 7,803 9,0228,370 – Others 13,078 18,806 7,141

216 Interest 70 50 501,516,769 1,530,522 1,541,052 1,526,706

Cash disbursed to:

Produce outputs991,155 – Personnel and operating 1,047,043 1,044,980 1,051,268289,007 – Capital charge 281,770 287,733 281,770(3,589) Net GST (received)/paid (3,043) 3,482 5,534

1,276,573 1,325,770 1,336,195 1,338,572240,196 Net cash flows

from Operating activities204,752 204,857 188,134

Cash Flows – Investing ActivitiesCash provided from:

32,464 Sale of property, plant and equipment

2,087 1,388 10,242

Cash disbursed to:462,297 Ministry of Defence prepayments 282,348 219,956 282,348

57,077 Purchase of property, plant and equipment

58,358 84,704 64,189

(486,910) Net cash flows from Investing activities

(338,619) (303,272) (336,295)

Cash Flows – Financing ActivitiesCash provided from:

291,307 Capital contributions 25,483 – 25,483Cash disbursed to:

11,077 Repayment of surplus 25,520 212 25,520280,230 Net cash flows

from Financing activities(37) (212) (37)

33,516 Net increase/(decrease) in cash held (133,904) (98,627) (148,198)235,451 Add opening cash balance 268,967 186,739 268,967268,967 Closing cash balance 135,063 88,112 120,769


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Reconciliation of Net Surplus/(Deficit) to Net Cash Flow from Operating Activities for the Year Ended 30 June 2005

30 Jun 04

Actual ($000)

30 Jun 05

Actual ($000)

30 Jun 05 Main

Estimates ($000)


Estimates ($000)

(46,480) Net Operating Surplus/(Deficit) 62,924 50 (24,950)

Add/(less) non – cash items229,392 Depreciation 232,345 229,869 225,111(1,867) Increase/(decrease) in the provision

for stock obsolescence(338) 12,848 (983)

(155) Increase/(decrease) in provision for doubtful debts

(86) (133) 13

(1,503) Increase/(decrease) in non–current employee entitlements

(6,057) (5,695) (2,599)

– Reversal of Write off debit balance in Revaluation Reserve

(23,414) – –

72,000 Write down of property, plant and equipment

20,148 – 25,000

297,867 Total Non – Cash Items 222,598 236,889 246,542

Working Capital Movements10,497 (Inc)/Dec in inventories 7,735 (10,597) 4,666

(16,158) (Inc)/Dec in debtors and receivables (24,788) (5,927) (19,053)7,594 (Inc)/Dec in prepayments other (1,980) (1,387) –

18,967 Inc/(Dec) in creditors and payables (24,184) (14,171) (12,405)3,589 Inc/(Dec) in GST Payable 3,043 – (5,534)

(11,906) Inc/(Dec) in provisions (1,552) (1,066)1,709 Inc/(Dec) in current employee

entitlements1,718 – (66)

14,292 Net Working Capital Movements (40,008) (32,082) (33,458)

Add/(less) Investing Activity items(25,483) Loss/(Gain) on disposal/retirement

of property, plant and equipment(40,762) – –

(25,483) Total Investing Activity items (40,762) – –240,196 Operating Activities Net Cash Flows 204,752 204,857 188,134


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Statement of Commitments as at 30 June 2005

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

Capital Commitments237,210 Not later than one year 506,152

71,192 One to two years 288,50319,803 Two to five years 278,219

– Over five years 8,550328,205 1,081,424

Non – Cancellable Operating Leases9,674 Not later than one year 12,2646,206 One to two years 8,3492,214 Two to five years 22,901

881 Over five years 88,78918,975 132,303

Commitments Arising from Other Contracts99,876 Not later than one year 113,94621,040 One to two years 26,79311,526 Two to five years 4,026

– Over five years –132,442 144,765479,622 Total commitments 1,358,492

Capital commitments are mostly with the Ministry of Defence who manage the procurement of major military assets on behalf of the NZDF.

The NZDF leases premises both within New Zealand and overseas for its operations. The amounts disclosed above as future commitments are based on the current rental rates.

Other contracts are for the purchase of goods or services, and include outstanding purchase orders.

Statement of Contingencies as at 30 June 2005

30 Jun 04 Actual ($000) Contingent Liabilities

30 Jun 05 Actual ($000)

2,048 Potential claims arising from disputes 5,461

The NZDF has potential contingent liabilities relating to life insurance policies held by members of the armed forces, where there is a war exclusion clause.

30 Jun 04 Actual ($000) Contingent Assets

30 Jun 05 Actual ($000)

911 Claim for damage to Boeing 757 caused by 3rd party –


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Indemnities

The NZDF has indemnified:

Auckland International Airport Limited in respect of an agreement to permit NZDF to train at airport facilities.

The Accident Compensation Corporation (ACC) against all claims, costs, liabilities and losses suffered by ACC in connection with a contract to provide surgical, clinical and hyperbaric oxygen treatment services at the Naval Hospital.

City Forests Limited in respect of an agreement to permit NZDF to train on City Forests Limited’s land.

Wenita Forest Products Limited in respect of an agreement to permit NZDF to train on Wenita Forest Products Limited’s land.

Hughes Global Services Inc. against any breach by the New Zealand Defence Force of the terms of a lease to access a satellite owned by the company.

The NZ Blood Services in respect of blood products.

Christchurch Hospital against loss or damage resulting from negligence or omission by Army medical personnel training at the hospital.

Airways Corporation in respect of air traffic control services.

United Airlines Inc in respect of a contract for the provision of Boeing 757 flight training services.

GAEA Technology Inc in respect of a contract for provision of information relating to Seasprite engines.

Provincial Airlines Limited and others as part of a settlement of NZDF’s claim for damage to a Boeing 757.

Statement of Trust Monies for the Year Ended 30 June 2005

01 Jul 04 Opening Balance

($000)Reimbursements from MSD

($000)Distributions on behalf of MSD

($000)

30 Jun 05 Closing Balance

($000)– 9,948 9,948 –

The Ministry of Social Development (MSD) is given an Appropriation, which provides funding for income assistance for NZDF personnel deployed in association with activities in East Timor and other peacekeeping activities. The income assistance is paid on behalf of the MSD by the NZDF through the NZDF payroll system. The MSD then reimburses the NZDF for the sum of the payments made.

The transactions through this account and the balance at 30 June 2005 are not included in the NZDF’s financial statements.


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Statement of Unappropriated Expenditure for the Year Ended 30 June 2005

30 Jun 04 Unappropriated

Expenditure ($000) Output Class

30 Jun 05

Actual ($000)

30 Jun 05

Appropriation ($000)

30 Jun 05 Unappropriated

Expenditure ($000)

Vote Defence Force9,916 1 Military Policy Development 11,114 11,283 –

564,743 2 Naval Combat Forces 543,833 547,916 –30,542 3 Naval Support Forces 32,909 33,160 –34,371 4 Mine Countermeasures, Diving and

Diving Support Forces34,806 34,995 –

8,694 6 Hydrographic Data Collection and Processing

8,588 8,845 –

234,928 7 Land Combat Forces 283,937 286,338 –152,267 8 Land Combat Support Forces 153,222 154,093 –126,996 9 Land Combat Service Support

Forces131,572 131,161 411

42,456 10 Specialised Forces 44,784 45,069 –160,227 12 Maritime Patrol Forces 149,544 150,815 –218,607 13 Fixed Wing Transport Forces 183,347 184,349 –

79,747 14 Rotary Wing Transport Forces 105,153 106,5747,634 15 Miscellaneous Support 7,601 7,889 –

49,808 16 Operationally Deployed Forces 24,770 32,848 –Vote Veterans’ Affairs – Defence

1,628 1 Policy & Administration 1,351 1,340 111,918 2 Services to Veterans 2,254 2,248 6

Other Expenses72,000 Other Expenses (3,266) 25,000 –

Unappropriated Expenditure is due to:

Vote: Defence Force

D9: Due to changes in the allocation of pay between Army outputs.

Vote: Veterans Affairs – Defence

D1: Due to minor variations in input costs.

D2: Due to minor variances in input costs, funded by increased revenue.

Approval of this unappropriated expenditure has been sought from the Minister of Finance in terms of Section 12 of the Public Finance Act 1989 (as if that section had not been amended by the Public Finance Amendment Act 2004 (PFAA), in accordance with the transitional provisions in section 33 of the PFAA).


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Statement of Departmental Expenditure and Appropriations for the Year Ended 30 June 2005

(All figures are GST inclusive)

Main Estimates


Supplementary Estimates

Change ($000)

Section 5 Changes

($000)

Total Appropriation

($000)

Audited Actual

Outturn ($000)

Vote Defence Force1 Military Policy

Development, Co–ordination & Advice

10,213 2,670 (1,600) 11,283 11,114

2 Naval Combat Forces 537,769 23,447 (13,300) 547,916 543,8333 Naval Support Forces 29,982 3,678 (500) 33,160 32,9094 Mine Countermeasures,

Diving and Diving Support Forces

34,787 (292) 500 34,995 34,806

6 Hydrographic Data Collection and Processing for LINZ and Third Parties

7,830 1,015 – 8,845 8,588

7 Land Combat Forces 262,384 10,354 13,600 286,338 283,9378 Land Combat Support

Forces159,224 (7,431) 2,300 154,093 153,222

9 Land Combat Service Support Forces

132,848 (4,687) 3,000 131,161 131,572

10 Specialised Forces 45,088 381 (400) 45,069 44,78412 Maritime Patrol Forces 160,902 (9,487) (600) 150,815 149,54413 Fixed Wing Transport

Forces207,771 (22,422) (1,000) 184,349 183,347

14 Rotary Wing Transport Forces

107,083 1,091 (1,600) 106,574 105,153

15 Miscellaneous Support Activities

8,134 155 (400) 7,889 7,601

16 Operationally Deployed Forces

32,692 156 – 32,848 24,770

Total Vote Defence Force 1,736,707 (1,372) – 1,735,335 1,715,180

Vote Veterans’ Affairs – Defence1 Policy & Administration 1,641 (301) – 1,340 1,3512 Services to Veterans 1,947 301 – 2,248 2,254

Total Vote Veterans’ affairs – Defence

3,588 – – 3,588 3,605

Total Output Appropriations 1,740,295 (1,372) – 1,738,923 1,718,785Total Appropriations 1,740,295 (1,372) – 1,738,923 1,718,785


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Non–departmental schedules

Statement Of Accounting Policies

Measurement and recognition rules applied in the preparation of these non–departmental schedules are consistent with generally accepted accounting practice and Crown accounting policies.

These non–departmental balances are consolidated into the Crown Financial Statements and therefore readers of these statements and schedules should also refer to the Crown Financial Statements for the year ended 30 June 2005.

Statement of Non–Departmental Expenditure and Appropriations for the Year Ended 30 June 2005

(All figures are GST inclusive where applicable)

30 Jun 04

Actual ($000) Description

30 Jun 05 Main

Estimates ($000)


Estimates ($000)

30 Jun 05 Total


30 Jun 05

Actual ($000)

Vote Veterans’ Affairs – Defence

Appropriations for non– departmental output classes807 Development & Maintenance of

Service Cemeteries812 – 812 805

221 Support for Veterans and Their Families

581 – 581 437

Appropriations for Other Expenses to be incurred by the Crown90 Ex Gratia Payment for POWs/

Surviving Spouses – – – –

225 Loan to the Rannerdale Trust – – – –– Loan to the Montecillo Trust – 225 225 225

1,343 Total 1,393 225 1,618 1,467

Veterans’ Affairs New Zealand is responsible for making payments for services supplied under the above non–departmental output class. Veterans’ Affairs New Zealand is responsible, on behalf of the Minister of Veterans’ Affairs, for monitoring the performance of non–departmental providers.

Cabinet agreed to offer a loan of $0.225 million (GST not applicable) to the Montecillo Trust to assist with the redevelopment of the Montecillo Veterans’ Home and Hospital, Dunedin.


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Schedule of Non–Departmental Assets for the Year Ended 30 June 2005


30 Jun 04 Actual ($000) Description

30 Jun 05 Actual ($000)

Vote Veterans’ Affairs – DefenceAppropriations for non– departmental output classes

868 Crown Bank Account 337

225 Loan to Rannerdale Trust 225

– Loan to Montecillo Trust 225

1,093 Total 787

Schedule of Non–Departmental Liabilities for the Year Ended 30 June 2005


30 Jun 04 Actual ($000) Description

30 Jun 05 Actual ($000)

Vote Veterans’ Affairs – DefenceAppropriations for non– departmental output classes

323 Creditors and Payables 43323 Total 43

There are no non–departmental commitments, contingent assets or contingent liabilities at 30 June 2005.


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Notes to the Financial Statements for the Year Ended 30 June 2005

Note 1: Budget Composition – NZDF & VANZ

Main Estimates

($000)

Supplementary Estimates Changes

($000)

Supplementary Estimates

($000)

RevenueCrown 1,530,323 (1,908) 1,528,415Departmental 8,998 221 9,219Other 7,608 467 8,075Interest 50 – 50Total Revenue 1,546,979 (1,220) 1,545,759

ExpenditurePersonnel 554,929 17,753 572,682Operating 474,398 (8,252) 466,146Depreciation 229,869 (4,758) 225,111Capital charge 287,733 (5,963) 281,770Total Output Expenses 1,546,929 (1,220) 1,545,709Other expenses – 25,000 25,000Total Expenses 1,546,929 (1,220) 1,570,709Net operating surplus/(deficit) 50 25,000 (24,950)

The main contributors to the Supplementary Estimates changes were:

$000

Vote Defence ForceRevenue Crown This reduction results mainly from capital charge savings returned to

Government.(1,908)

Revenue Department An increase in State Services Commission (SSC) sourced revenue to provide for the costs in 2004/05 of the State Sector Retirement Savings Scheme (SSRSS).

221

Revenue Other Increased recoveries associated with management of the Naval Dockyard.

467

(1,220)Personnel Expenses A requirement to provide for increased personnel costs was

identified during 2004/05. This resulted from a civilian pay increase, increased recruiting by Navy and Air and the ‘creep’ associated with the retention and recruitment of higher ranked personnel where increased average pay rates for Regular Force personnel have been realised.

17,753

Operating Expenses Various operating savings were identified that provide for the increased personnel expenses.

(8,252)

Depreciation Depreciation changes mainly were associated with revised timing for the capitalisation of LAVs.

(4,758)

Capital Charge Expenses This reflects a technical reduction in the value of taxpayers funds on which the capital charge is based. Some $2M of those savings were returned to Government.

(5,963)

(1,220)

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Variations from BudgetThe final result for the year was a surplus of $62.924 million. This two main factors causing this surplus are (figures exclude GST):

– Profit on sale of assets of $40.762 million relating to Land and Buildings.

– An under spend of $18.826M, mainly operating cost savings due to reprioritisation of spending to Defence Sustainability Initiative (DSI) projects. In June Cabinet approved in principle a transfer of up to $20 million of appropriations from 2004/05 to 2005/06 to enable this reprioritisation to occur (CAB Min (05) 23/7).

In addition, there is a net credit of $3.266 in Other Expenses, compared with a budgeted expense of $25 million. These items are non–cash technical adjustments as detailed in note 10. The items include:

– $20.148M clearing accumulated Air Combat Force disposal costs ($25 million budgeted).

– $23.414M credit generated by a transfer from the Specialist Military Equipment (SME) revaluation reserve (nil budgeted).

Note 2: Crown Revenue

This is revenue earned for the supply of outputs to the Crown.

Note 3: Departmental Revenue

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

30 Jun 05 Supplementary Estimates

($000)6,841 Land Information New Zealand 6,239 6,3271,350 Ministry of Social Development 1,350 1,350

515 Ministry of Defence 515 750– State Services Commission 823 789– New Zealand Police 4 3

8,706 Total Departmental Revenue 8,931 9,219

Note 4: Other Revenue

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)


($000)675 Use of RNZAF aircraft 488 520

2,620 Third party cost recoveries 3,334 3,328271 UN peacekeeping 396 383403 Contributions from Veterans for plaques 424 405

2,533 Miscellaneous 2,552 3,4396,502 Total Other Revenue 7,194 8,075

Note 5: Interest Revenue

Interest is earned on funds in various overseas bank accounts.

Note 6: Personnel Costs

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)


($000)549,251 Salaries and wages 566,871 569,998

8,229 Retirement and accumulated leave 4,492 2,684557,480 Total Personnel Costs 571,363 572,682

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Note 7: Operating Costs

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)


($000)164,615 Materials 161,256 161,27445,543 Premises costs 50,875 44,77967,117 Repairs and maintenance 61,548 75,88147,823 Training and travel 46,130 53,49334,403 Operating lease rentals 35,581 36,600

3,968 Consultancy 1,934 2,553322 Audit fees: Audit NZ 330 33054 Non–audit fees: Audit NZ 18 3(9) Increase/decrease in provision for

doubtful debts41 8

15 Bad debts written off 31 –(377) Net foreign exchange (gain)/loss (141) –

21 Fees to auditors other than Audit NZ for other services provided

22 22

10,000 Impairment costs – –83,516 Other operating costs 82,611 91,203

457,011 Total Operating Costs 440,236 466,146

Note 8: Depreciation

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)


($000)32,926 Buildings 27,950 28,151

179,593 Specialist Military Equipment 188,353 180,8137,940 Plant and Equipment 7,342 7,2365,488 Office and Computer Equipment 4,934 5,3513,445 Motor Vehicles 3,766 3,560

229,392 Total Depreciation Costs 232,345 225,111

Note 9: Capital Charge

The NZDF pays a capital charge to the Crown on its average Taxpayers’ Funds as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2005 was 8.0% (2004 8.5%).

Note 10: Other Expenses

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)


($000)– Reversal of 2002/03 write off debit balance in

Revaluation Reserve arising from revaluation of SME *

(23,414) –

72,000 Technical adjustment to write down the carrying value of MoD prepayments, primarily to allow for changes in foreign exchange rates.

– –

– Clearing accumulated Air Combat Force disposal costs.

20,148 25,000

72,000 Total Other Expenses (3,266) 25,000

* This transaction is required because assets which have been disposed of with revaluation reserve debit balances, resulting in a credit balance in the revaluation reserve (see Note 11). In the 2002/03 financial year, there was a transaction to write off a debit balance of $23.414M in the SME Revaluation Reserve arising from the revaluation that year. Because this reserve now has a credit balance, Financial Reporting Standard 3 requires that this write off be reversed through the statement of financial performance.

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Note 11: Taxpayers’ Funds

Taxpayers funds comprises two components:

General Funds

30 Jun 04 ($000)

30 Jun 05 ($000)

2,814,256 Balance brought forward 3,030,339(46,480) Net Operating Surplus/(Deficit) 62,924

(3,224) Gains/(Losses) on revaluation realised and transferred from Revaluation Reserve for assets disposed of

(43,795)

291,307 Capital Contribution 25,4833,055,859 3,074,951

(25,520) Provision for repayment of Surplus to the Crown (59,658)3,030,339 Balance Carried Forward 3,015,293

Revaluation Reserve

30 Jun 04

Total ($000)

30 Jun 05

Land & Buildings ($000)

30 Jun 05 Specialist Military

Equipment ($000)

30 Jun 05

Total ($000)

480,558 Balance brought forward 481,693 10,097 491,7908,008 Revaluation movement 328,901 – 328,9013,224 (Gains)/Losses on revaluation

realised and transferred to General Funds for assets disposed of

(6,961) 50,756 43,795

Reversal of debit balance expensed (note 10)

– (23,414) (23,414)

– Other – (2,665) (2,665)491,790 Balance Carried Forward 803,633 34,774 838,407

Note 12: Debtors and Receivables

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

375 Trade debtors: departments 63,17520,064 Trade debtors: non departments 6,563

(307) Less: provision for doubtful debts (221)20,132 Total Debtors and Receivables 69,517

Note 13: Prepayments to Ministry of Defence

In 1994 the Ministers of Finance and Defence agreed to a prepayments regime relative to capital expenditure incurred by the Ministry of Defence from Vote Defence. With effect from 1 July 1994, and retrospectively for open projects, the NZDF reimburses the Ministry of Defence twice annually for costs incurred on capital projects. This has the effect of transferring non–departmental capital expenditure from the Ministry of Defence to prepayments in the NZDF Statement of Financial Position.

As at 30 June 2005 the reported prepayment of $147.724 million (2004 $216.387million) remains uncapitalised.

Note 14: Inventory

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

343,815 Inventory 351,120(135,166) Less: provision for obsolete stock (134,828)208,649 Total Inventory 216,292

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Note 15: Property, Plant and Equipment Identified for Disposal

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

Current Assets34,061 Land & Buildings Intended for Sale 15,283(2,286) Accumulated depreciation (222)31,775 Total Current Assets 15,061

Non – Current Assets70,747 Land & Buildings Intended for Sale 22,884(3,750) Accumulated depreciation –66,997 Total Non – Current Assets 22,88498,772 Total Assets Intended for Disposal 37,945

Note 16: Property, Plant and Equipment

30 Jun 04 ($000)

30 Jun 05 ($000)

Land & Buildings10,465 At cost 21,472

900,718 At valuation 1,222,222(29,697) Accumulated depreciation (1,200)881,486 Land & Buildings – net carrying value 1,242,494

Specialist Military Equipment1,231,028 At cost 1,625,3911,105,530 At valuation 1,048,114(482,456) Accumulated depreciation (621,175)1,854,102 Specialist Military Equipment – net carrying value 2,052,330

Plant & Equipment206,721 At cost 209,118

(126,106) Accumulated depreciation (128,160)80,615 Plant & Equipment – net carrying value 80,958

Office & Computer Equipment46,282 At cost 46,664

(31,168) Accumulated depreciation (33,822)15,114 Office & Computer Equipment – net carrying value 12,842

Capital Work in Progress4,207 Buildings 3,841

90,019 Specialist Military Equipment 43,2022,307 Plant & Equipment 4,6808,764 Office & Computer Equipment 14,893

105,297 Capital Work in Progress– net carrying value 66,616

Total Property, Plant and Equipment3,606,041 At cost and valuation 4,239,597 (669,427) Accumulated depreciation (784,357)2,936,614 Total Net Carrying Value of Property, Plant and Equipment 3,455,240

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Note 17: Creditors and Payables

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

28,409 Trade creditors 23,51175,303 Accrued expenses 51,70216,049 Salaries and payroll liabilities 15,801

3,314 Other short term liabilities 2,360123,075 Total trade creditors and accruals 93,37418,328 GST payable 21,371

141,403 Total Creditors and Payables 114,745

Note 18: Provisions

30 Jun 04 Total

($000)

30 Jun 05 Environmental

($000)

30 Jun 05 Other

($000)

30 Jun 05 Total

($000)21,782 Opening balance 9,793 83 9,876

600 Additional provisions made during the year – – –(12,506) Charged against provision for the year (1,469) (83) (1,552)

9,876 Closing balance 8,324 – 8,324

Environmental – this provision relates to estimated costs of remedial work planned to be undertaken to address issues identified under the Resource Management Act. These costs will be charged to the provision as work is completed.

Note 19: Provision for Repayment of Surplus to the Crown

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

(46,480) Net operating (deficit)/surplus 62,92472,000 Less: other expenses (3,266)25,520 Net surplus from delivery of outputs 59,658

25,520 A. Total provision for repayment of surplus 59,658216 B. Interest received 70

25,520 Surplus Repayable – the higher of A or B above 59,658

Note 20: Provision for Employee Entitlements

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

Current Portion2,079 Retirement, incentive and long service leave 2,541

15,386 Accrued and annual leave 16,64217,465 Total current portion 19,183

Non – Current Portion48,298 Retirement, incentive and long service leave 43,72611,301 Accrued leave 9,81659,599 Total non – current portion 53,54277,064 Total Provision for Employee Entitlements 72,725

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Note 21: Deferred Payment

This is deferred payment owing to the Ministry of Defence which relates to HMNZS TE MANA. The NZDF capitalised HMNZS TE MANA in October 2000. Under the terms of the purchase contract some payments are scheduled in future periods.

30 Jun 04 Actual ($000)

30 Jun 05 Actual ($000)

1,967 Current Portion –14,709 Non – Current Portion 15,67816,676 Total Deferred Payment 15,678

Note 22: Financial Instruments

Credit RiskCredit risk is the risk that a third party will default on its obligations to the NZDF, causing the NZDF to incur a loss.

In the normal course of its business, the NZDF incurs credit risk from trade debtors, and transactions with financial institutions and the New Zealand Debt Management Office (NZDMO). The NZDF does not require any collateral or security to support financial instruments with either the financial institutions that it deals with, or with the NZDMO, as these entities have high credit ratings.

The NZDF is party to Letters of Credit with Westpac Bank of $3.372 million (2004, $3.337 million).

Fair ValueWith the exception of foreign currency forward contracts noted below, the fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.

The fair value of foreign currency forward contracts based on NZDMO mid–point rates at balance date shows a net unrealised deficit of $1.511 million (2004, deficit of $0.528 million). These contracts are held as hedging transactions, undertaken to eliminate the risk of adverse exchange rates on the future costs of goods and services to be purchased in foreign currencies. In accordance with SSAP 21, recognition of the exchange differences on these hedging transactions has been deferred, and will be included in the measurement of the underlying purchase transactions as they fall due for settlement.

Currency Risk and Interest Rate RiskCurrency risk is the risk that balances denominated in foreign currency will fluctuate because of changes in foreign exchange rates.

The NZDF uses foreign exchange forward contracts to manage foreign exchange exposures. The notional principal amount outstanding at balance date on hedged purchase and sale commitments was $81.471 million (2004, $60.842 million).

Interest rate risk is the risk that the NZDF’s return on the funds it has invested will fluctuate due to changes in market interest rates. Under Section 46 of the Public Finance Act, the NZDF cannot raise a loan without Ministerial approval and no such loans have been raised. Accordingly, there is no interest rate exposure on funds borrowed.

The NZDF has no significant exposure to interest rate risk on its financial instruments.

Note 23: Related Party Information

The NZDF is a wholly owned entity of the Crown. The Government significantly influences the roles of the NZDF as well as being its major source of revenue.

Veterans’ Affairs New ZealandVeterans’ Affairs New Zealand (VANZ) is a “semi–autonomous body” within the NZDF, and all the transactions, assets and liabilities of VANZ are included within these financial statements. The Office commenced operations on 12 April 1999. The Chief of Defence Force is responsible to the Minister of Veterans’ Affairs for the financial management of the Office under the Public Finance Act 1989. A Purchase Agreement defines the relationship between the Minister of Veterans’ Affairs and the Chief of Defence Force. A formal delegation is in place from the Chief of Defence Force to the Director of Veterans’ Affairs. The NZDF provides VANZ with administration and infrastructural support as part of their day–to–day relationship.

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Ministry of Social DevelopmentThe Ministry of Social Development (MSD) makes Defence Force allowance payments to NZDF personnel deployed overseas. The payments are made through the NZDF payroll systems on behalf of the MSD. The MSD then reimburses the NZDF. The amounts disbursed and reimbursed are disclosed in the Statement of Trust Monies.

Ministry of DefenceDuring the year the NZDF paid the Ministry of Defence $282.348 million (2004 $462.298 million) in relation to the prepayments arrangement referred to in Note 13. The NZDF made no purchases of goods and services from the Ministry of Defence (2004 nil). $15.678 million (2004 $16.676 million) was owing to the Ministry of Defence as at 30 June 2005 (see Note 21). During the year the NZDF recovered Administrative and Project costs from the Ministry of Defence totalling $2.891 million (2004 $4.945 million). The amount outstanding as at 30 June 2005 was $0.292 million (2004 $0.077 million). NZDF reimbursed Ministry of Defence $0.439 million (2004 $5.154 million) for expenses the Ministry has incurred in capital acquisition projects prior to the decision on which asset to purchase. These pre–acquisition costs are expensed by the Ministry of Defence, as they do not meet the criteria for capitalisation.

Non–Public FundsA number of non–public funds (NPFs) have been established under the Defence Act 1990 Section 58. These funds are established for the benefit of service personnel, and are specifically defined as not being public money under the Public Finance Act 1989. The beneficiaries of these NPFs are the members, who are the service personnel who contribute to them. NPFs include a wide range of entities such as sports and recreational funds, messes, unit funds, welfare funds, clubs for ranks, accommodation funds, and benevolent funds. It is estimated that NPFs have

– Net Assets of $30.3 million.

– Annual revenue of $2.5 million

– Annual expenditure of $2.3 million

NPFs, by their nature, have a close relationship with the NZDF, and contribute to the well–being and esprit de corps of armed forces personnel. These funds are established under Section 58 of the Defence Act 1990, and governance arrangements are generally established under Defence Force Orders issued by the Chief of Defence Force or Service Chiefs. This often includes NZDF representation on the governing bodies of the funds. The NZDF provides support to NPFs in the form of administrative support and facilities, for which no charge is made. There are no other transactions with NPFs.

Service MuseumsThe NZDF has close links with the Service Museums for the Army, Navy and Air Force. The Service Museums are independent entities established by trust deed. NZDF is represented on the governing bodies of these entities.

The NZDF provides support to Service Museums in the form of payment of some operating costs and provision of administrative support and facilities, for which no charge is made.

It is estimated that Service Museums have

– Net Assets of $9.6 million (excluding value of collection assets which are not recorded in the Museums Statements of Financial Position).

– Annual revenue of $1.5 million

– Annual expenditure of $1.5 million

Armed Forces Canteen CouncilThe NZDF has a close working relationship with the Armed Forces Canteen Council (AFCC), which is an independent body established under the Armed Forces Canteens Act 1948, which includes members of the NZDF serving as part of the Council and Board of Management of the AFCC.

The mission of the AFCC is to be the preferred provider of retailing and cafeteria services on all NZDF camps and bases and to further benefit those personnel associated with the NZDF through the distribution of profits. The AFCC has trading outlets at all the major camps and bases. The NZDF provides facilities to AFCC to conduct its operations in accordance with Defence Force Order 16/1995.

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OtherThe NZDF enters into numerous transactions with other government departments, Crown agencies and state–owned enterprises on an arm’s length basis. Where those parties are acting in the course of their normal dealings with the NZDF, related party disclosures have not been made for transactions of this nature.

Apart from those transactions described above, the NZDF has not entered into any related party transactions.

Note 24: Appropriation Movements(All figures are GST inclusive where applicable)

($000) ($000)Main Estimates as at 1 July 2004 1,736,707

Deployment Related Funding – Through Revenue CrownSolomon Islands – Post July 2004 CAB Min (04) 22/2 1,094Operation Enduring Freedom Package CAB Min (04) 41/31 1,221Military Liaison Officers – Iraq CAB Min (04) 29/4B 54Military Liaison Officers – Afghanistan CAB Min (04) 29/4A 54

2,423

Technical Adjustments – Through Revenue CrownTransfer Joint Ministers (402)Waiouru Cadet School Transfer CAB Min (04) 35/4 (563)Capital Charge – Gross Reduction Joint Ministers (6,708)Capital Charge – Savings Retained by NZDF Joint Ministers 3,961Transfer of Defence Force Allowances Joint Ministers (857)

(4,569)

Technical Adjustments – Through Other RevenueAdjust State Sector Superannuation Scheme Joint Ministers 249Naval Dockyard Revenue Other change Joint Ministers 525

774

Capital Contributions (GST not applicable)Asset Sale Proceeds 2003/2004 Joint Ministers 25,483

25,483

Other Expenses (GST not applicable) Balance Sheet Adjustment CAB Min (05) 8/3 25,000

25,000

Total Appropriation Changes 49,111Total Supplementary Estimates of Appropriations 1,785,818

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Note 25: Employee Remuneration

The remuneration figures below comprise base salary, superannuation subsidies, motor vehicle entitlements and other benefits for employees. The remuneration figures also include terminal benefits where applicable.

2004/05 2003/04

Remuneration band Number of employees Number of employees$320,001 – $330,000 1 –$290,001 – $300,000 1 1$280,001 – $290,000 – 1$260,001 – $270,000 1 –$240,001 – $250,000 2 –$220,001 – $230,000 2 2$210,001 – $220,000 2 –$200,001 – $210,000 – 1$190,001 – $200,000 1 1$180,001 – $190,000 – 7$170,001 – $180,000 1 1$160,001 – $170,000 2 2$150,001 – $160,000 4 4$140,001 – $150,000 12 6$130,001 – $140,000 20 15$120,001 – $130,000 35 24$110,001 – $120,000 69 48$100,001 – $110,000 102 89

The Tomb of the Unknown Warrior

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CDF/CFO Statement of Responsibility

In terms of sections 35 and 37 of the Public Finance Act 1989, (these section references apply as if those sections had not been amended by the Public Finance Amendment Act 2004 (PFAA)), in accordance with the transitional provisions in section 33 of the PFAA, I am responsible, as Chief Executive of the New Zealand Defence Force, for the preparation of the Department’s financial statements and the judgements made in the process of producing those statements.

I have the responsibility of establishing and maintaining, and I have established and maintained, a system of internal control procedures that provide reasonable assurance as to the integrity and reliability of financial reporting.

In my opinion these financial statements fairly reflect the financial position and operations of the Department for the year ended 30 June 2005.

B.R. Ferguson Air Marshal Chief of Defence Force

04 August 2005

M Horner Corporate Financial Officer

04 August 2005

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Audit Report

To the Readers of the New Zealand Defence Force’s Financial Statements for the Year Ended 30 June 2005

The Auditor-General is the auditor of the New Zealand Defence Force. The Auditor-General has appointed me, C R Fabling, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the New Zealand Defence Force, on his behalf, for the year ended 30 June 2005.

Unqualified opinion

In our opinion the financial statements of the New Zealand Defence Force on pages 53 to 109 and pages 114 to 148:

– comply with generally accepted accounting practice in New Zealand; and

– fairly reflect:

–� the New Zealand Defence Force’s financial position as at 30 June 2005;

�– the results of its operations and cash flows for the year ended on that date; and

�– its service performance achievements measured against the performance targets adopted for the year ended on that date; and

�– the assets, liabilities, revenues, expenses, contingencies, commitments and trust monies managed by the New Zealand Defence Force on behalf of the Crown for the year ended 30 June 2005.

The audit was completed on 4 August 2005, and is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Chief of Defence Force and the Auditor, and explain our independence.

Basis of opinion

We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements did not have material misstatements, whether caused by fraud or error.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

The audit involved performing procedures to test the information presented in the financial statements. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

– determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;

– verifying samples of transactions and account balances;

– performing analyses to identify anomalies in the reported data;

– reviewing significant estimates and judgements made by the Chief of Defence Force;

– confirming year-end balances;

– determining whether accounting policies are appropriate and consistently applied; and

– determining whether all financial statement disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.

We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and explanations we required to support our opinion above.

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Responsibilities of the Chief of Defence Force and the Auditor

The Chief of Defence Force is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the New Zealand Defence Force as at 30 June 2005. They must also fairly reflect the results of its operations and cash flows and service performance achievements for the year ended on that date. In addition, they must fairly reflect the assets, liabilities, revenues, expenses, contingencies, commitments and trust monies managed by the New Zealand Defence Force on behalf of the Crown for the year ended 30 June 2005. The Chief of Defence Force’s responsibilities arise from the Public Finance Act 1989.

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and the Public Finance Act 1989.

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

In addition to the audit we have carried out assurance assignments in the areas of tendering and costing systems. These assignments are compatible with those independence requirements. Other than the audit and these assignments, we have no relationship with or interests in the New Zealand Defence Force.

C R Fabling

Audit New Zealand On behalf of the Auditor–General Wellington, New Zealand

Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of the New Zealand Defence Force for the year ended 30 June 2005 included on the New Zealand Defence Force’s website. The Chief of Defence Force is responsible for the maintenance and integrity of the New Zealand Defence Force’s website. We have not been engaged to report on the integrity of the New Zealand Defence Force’s website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

We have not been engaged to report on any other electronic versions of the New Zealand Defence Force’s financial statements, and accept no responsibility for any changes that may have occurred to electronic versions of the financial statements published on other websites and/or published by other electronic means.

The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 4 August 2005 to confirm the information included in the audited financial statements presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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report of the new zealand defence forceannual report 2004 — 2005 annual report 2004 — 2005 g.55...

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