new zealand defence force annual report 2004 · new zealand defence force te ope kaatua o aotearoa...

ANNUAL REPORT 2003 — 2004


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 2004

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

Significant Operations 8

Support to New Zealand Communities 9

Personnel 9

Military Capability 10

Defence Organisation 11

Conclusion 11

Section 2 Defence at a Glance 13

Linkages to Government Policy 13

Royal New Zealand Navy 16

New Zealand Army 18

Royal New Zealand Air Force 20

Joint Forces New Zealand 22

Operational Deployments 2003/04 22

Forces and Locations 24

NZDF Organisation 26

Navy Organisation 27

Army Organisation 28

Air Force Organisation 29

HQ JFNZ Organisation 30

Personnel Summary 31

Expenditure Summary 32

Statutory Committees 33

Availability of Information 33

Legislation Administered by NZDF 34

Section 3 Key Priorities 39

KP 1: Defence Policy 40

KP 2: Personnel 40

KP 3: Military Capability 42

KP 4: Defence Diplomacy 43

KP 5: Efficiency and Effectiveness 44

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Contents

Section 4 Statements of Service Performance 47

Military Capability 47

Performance Measurement 47

D1: Military Policy Development, Coordination and Advice 49

D2: Naval Combat Forces 52

D3: Naval Support Forces 57

D4: MCM, Diving and Diving Support Forces 60

D6: Hydrographic Data Collection and Processing 64

D7: Land Combat Forces 67

D8: Land Combat Support Forces 71

D9: Land Combat Service Support Forces 75

D10: Specialised Forces 79

D12: Maritime Patrol Forces 82

D13: Fixed Wing Transport Forces 86

D14: Rotary Wing Transport Forces 90

D15: Miscellaneous Support Activities 93

D16: Operationally Deployed Forces 96

Services in Support of the Government and the Community 101

Section 5 Veterans’ Affairs 109

Information and Management, and Accountability 109

Linkages to Government Policy and Outcomes 109

Outcomes 110

Statement of Objectives and Service Performance 113

Section 6 Financial Statements 123

Statement of Accounting Policies 123

Financial Statements 127

Notes to Financial Statements 137

Statement of Responsibility 148

Report of the Auditor General 149

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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

CHOGM Commonwealth Heads of Government Meeting

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

CT Counter-Terrorist/ism

DOC Department of Conservation

DPS Defence Planning System

DTA Defence Technology Agency

EC Employment Context

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

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

LOC:

– BLOC

– DLOC

– OLOC

Level of Capability:

– Basic Level of Capability

– Directed Level of Capability

– Operational Level of Capability



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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.

List of Abbreviations

Abbreviation Definition

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

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

SMB Survey Motor Boat

SME Specialist Military Equipment

STRAPP Strategic Planning Process

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 NZDF’s high operational tempo has continued unabated throughout 2003-2004. Defence force personnel have responded to numerous and diverse tasks both overseas and at home. From assisting with flood relief in New Zealand and Vanuatu, to reconstruction and peace support efforts in Iraq and the Solomons, through to operations in the Arabian Gulf and combat operations in Afghanistan, the Defence Force team has once again earned praise both at home and abroad.

The Services, the staff at Defence and Joint Headquarters, the personnel, both military and civilian, at all levels throughout the organisation, have made a valuable contribution to New Zealand’s security interests and international standing. In an increasingly close partnership with the Ministry of Defence (MoD), the NZDF has continued to modernise its range of capabilities in line with the long-term development plan that sets out the modernisation priorities for defence.

As we look to the future, we can learn from, and apply, the lessons from our recent past. The Defence Force team is an increasingly joint and flexible organisation responding to rapid changes in the international setting. The challenges it has faced include the high operational tempo, the fiscal limitations of a small economy and the increasing difficulty in attracting and retaining personnel in a competitive employment market. The challenges

to New Zealand’s security interests continue to develop, and the NZDF continues to evolve to meet the challenges of today and those expected in the future. The following sections outline our progress over the past year and look forward to the challenges ahead.

Strategic Environment

The current environment continues to present a growing number of non-conventional security challenges that have implications for New Zealand’s strategic interests. The New Zealand Defence Force trains for conventional military operations but retains the flexibility and versatility to contribute to international efforts to counter terrorism, to contain the fall-out from increasing intra-state conflict, to respond to the breakdown of law and order in failing states and to provide support for efforts to counter transnational criminal activity.

The reputation our forces have justly acquired for their services in numerous locations around the globe including Bosnia, East Timor, Solomon Islands, Iraq, and Afghanistan, has led to increasing calls for our participation in a range of operations. As a small but professional, versatile and adaptable defence force, the NZDF stands ready to play a role in helping the Government respond to pressing regional and international security issues.

Terrorism remains a significant and serious threat in the region with Al Qaeda affiliates, such as Jemaah Islamiyah, linked to a number of high profile and deadly incidents. The tragedy in Bali and the bombing at the JW Marriott Hotel in Jakarta were two very graphic examples. For this reason counter-terrorism missions in support of Operation Enduring Freedom have remained a significant focus for the NZDF over the past 12 months. New Zealand was among the first countries to contribute military assets to the international campaign against terrorism, and to support enhancement of security and the rebuilding of society in Afghanistan.

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We remain one of the largest per capita contributors to Operation Enduring Freedom and our participation indicates the priority the New Zealand Government has placed on international efforts to respond to threats from terrorism. Operation Enduring Freedom has already seen the largest continuous deployment of the naval combat force, in the Gulf region, for over twenty years and an RNZN frigate has recently resumed duties in the area. It has also witnessed the most prolonged deployment of an RNZAF Orion aircraft so far from our shores, and the SAS have again been deployed to Afghanistan this year.

Reflecting New Zealand’s concern about the fragility of the security environment and the need for ongoing international engagement in Afghanistan, the NZDF assumed command of the Bamian Provincial Reconstruction Team (PRT) (200 km north–west of Kabul) from the US in late September 2003. This deployment involves a tri-Service contingent of 95 personnel and is designed to assist the Afghanistan Transitional Authority extend its influence beyond Kabul. The deployment has recently been extended until September 2005 to underline New Zealand’s commitment to enhancing security and promoting reconstruction at this critical juncture in Afghanistan’s political process. In addition, the NZDF continues to provide staff officers to the International Security Assistance Force (ISAF) and training support to the Afghan National Army.

In the South Pacific many of our neighbours continue to grapple with cumulative stresses arising from population growth, ethnic tensions, widening socio-economic disparities, governance failures and the impact of global trends. The NZDF is proud of its role in helping to resolve the conflicts on Bougainville and East Timor, and its current contribution to the Regional Assistance Mission in the Solomon Islands, known as RAMSI. In cooperation with Australia and other partners in the Pacific the objectives of RAMSI are to restore the rule of law, re-empower Solomon Islands public institutions, including the Royal Solomon Islands Police, and establish conditions under which the country can achieve economic and social recovery. It is a police-led mission, with the military there to provide backup. The NZDF is also seeking to step up its engagement with our South Pacific neighbours underpinned by a genuine understanding of Pacific concerns.

Asia is a region where strategic realities and uncertainties and market opportunities, combine to compel a strategy of greater engagement. The NZDF continues to participate in regional confidence building in South East Asia through bilateral and multilateral relationships, most notably through the Five Power Defence Arrangements with Australia, Malaysia, Singapore and the United Kingdom and in the wider region through the ASEAN Regional Forum. The importance New Zealand places on stability and security in South East Asia is demonstrated by our continuing, although reduced, involvement in Timor Leste where we support the peacekeeping operation and train that country’s fledging defence force.

Further north, our maturing defence relations with China and Japan underscore our commitment to peaceful interaction in the region. Following two successful NZDF contributions to the United Nations Command Honour Guard in Seoul in recent years, we will second an officer to the UNC Military Armistice Commission in July 2004, thereby reaffirming the value that New Zealand places on its broader relationship with Korea and demonstrating our ongoing commitment to peace and stability on the Korean Peninsula and in the wider East Asian region.

International and regional security trends indicate that the professional expertise of the NZDF will continue to be a vital requirement for supporting New Zealand’s credibility as a good international citizen through its support of the United Nations and the rule of international law. This continues to be reflected in our diverse and wide-ranging commitments to peacekeeping and reconstruction missions, and our continued support for demining activities.

Significant Operations

We have maintained a very 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.

The lessons we learnt in Timor Leste provided invaluable experience when the NZDF sent a contingent of 225 personnel to assist the Solomon Islands Government as part of RAMSI. At its height our contribution consisted of four helicopters, an infantry company, logistics, communications, engineer and medical personnel, all of whom played a key role in facilitating civil and humanitarian assistance. We continue to provide two helicopters, an infantry platoon and staff officers to support the police-led operation by monitoring the ongoing security situation.

In Afghanistan we commenced humanitarian assistance by establishing a NZDF tri-Service PRT based in the Bamian province. Now in its second rotation, the team has actively been engaging 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 the Coalition Headquarters and provide valuable support to the reconstruction efforts that are being undertaken by many nations.

In Iraq, the NZ Army Engineers deployed to assist with the humanitarian and reconstruction effort in Basra. Working under the umbrella of a United Kingdom Engineer Regiment, our engineers have been restoring water and essential services to schools and critical facilities, such as hospitals. Our efforts have undoubtedly made life better for Iraqis in the areas in which we have operated.

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Recently HMNZS TE MANA deployed to the Gulf Region to again contribute to maritime interdiction operations in support of the international campaign against terrorism. This deployment complements the previous tours of operational duty already conducted by HMNZ Ships TE MANA and TE KAHA, the RNZAF P3 Orion and C130 Hercules, and the sailors, soldiers and airmen attached to various headquarters and units in the Gulf region.

We have also continued our global commitments to Peace Support Operations. NZDF personnel remain deployed on a number of other missions in the Middle East, Africa, Bosnia, South East Asia and Timor Leste. Our personnel are also employed as United Nations Military Observers, de-mining advisors, trainers and staff officers.

No matter where our people are deployed our sailors, soldiers and airmen 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 February floods in the Manawatu Region where we provided a significant level of assistance through the provision of personnel, vehicles, helicopters and shelter. Further afield, the NZDF provided extensive assistance in the relief operation after Cyclone Heta struck Niue.

Personnel

The recruitment and retention of personnel remains a key priority for the NZDF, particularly with the introduction into service of new equipment and capability. With a very strong external employment market, and attrition rates again climbing in some critical areas, a complete review of personnel management policies and practices is being undertaken. This will seek to improve the attraction of the NZDF to future recruits, and enhance the satisfaction and retention of serving personnel.

Four strategic goals have been identified to take the NZDF forward. The first of these is to identify the HR requirements necessary for the delivery of future capability, through an integrated ‘whole of capability’ planning process, and adoption of robust and effective workforce planning tools. HR factors will be integrated into corporate strategic planning as part of the Capability Management Framework (CMF) and wider Strategic Guidance for the delivery of our future force.

Our second goal is to build the future force and for that we must continue to attract and retain the right people. These are people with the competencies that will sustain the delivery of the HR component of capability, now and into the future. Recruiting systems and practice will be enhanced to attract and deliver a sufficient and timely supply of personnel. Enhancing an effective operational force that supports Government Outcomes is our third goal and will see the alignment of the Services and NZDF HR policies across the organisation. Work has been undertaken in the past year to align our systems for both the military and civilian personnel within the NZDF. Our remuneration packages have continually been improved to remain competitive with the external market, and appropriately balancing our existing, and future, recruiting needs and expectations is also being addressed. The 2004 military pay adjustment is the fourth successive pay adjustment focused on reducing the gap between military pay rates and those in the wider public sector and in particular, we have implemented a number of remuneration and non-remuneration initiatives to address retention issues.

In order to measure and benchmark the HR critical success factors necessary to deliver the knowledge edge force, our personnel related information across the NZDF must support decision-making relevant to a range of outputs at all levels. This is our fourth goal. We need to consider changes to induction, training, conditions of service, and leadership and management practices, to develop and sustain our future HR resource, without compromising aspects of our culture and the methods of operating that will be necessary to sustain our future capability. While some steps have been taken in scoping this wide ranging project, the next year will see further work in these areas progressed.

This HR strategic plan will guide the growth and development of current and future NZDF capability through our people.

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Military Capability

The Long Term Development Plan (LTDP), the third in a series of Government documents that outline intentions to reconfigure the Defence Force, has continued to be a vital planning tool while providing certainty for the NZDF modernisation programme. It has been reviewed and updated since its release to ensure that the Plan remains sustainable, while allowing priorities to be made between and within projects as new information comes to hand. Since its inception in June 2002, significant progress has been made on most projects as the following summary shows.

Two Boeing 757s were delivered mid-2003 and have since been used extensively on a range of tasks and the upgrade to provide a freight capability will be undertaken in 2005/06. Defence has identified a preferred tenderer to upgrade the P–3K Orions and a Best and Final Offer process is well advanced. Offers are also being evaluated for the C–130 Life Extension project. On the medium utility helicopter, the process of identifying possible suppliers to replace the Iroquois is progressing.

The supplier of seven ships for Project Protector has been selected and a contract is expected to be awarded in July 2004.

A contract has been awarded for the Light Operational Vehicles with the commencement of delivery of the first vehicles expected in September 2004. Orders have been placed for the Javelin system (for the Medium Range Anti-Armour Weapon project), and for the Identification Friend or Foe (IFF) and Automatic Cueing System (to complete the Very Low Level Air Defence System project). Inspection of the preferred automatic grenade launcher is under action (under the Direct Fire Support Weapon project).

The supply of the NZLAV to the NZDF is well advanced and the last vehicles will be accepted into service in February 2005. The project is being completed on time and within budget and the equipment is being integrated into the Army. There remain some risks with the project, as while the NZDF is on track to introduce the NZLAV, the development of the motorised battalion is a complex task. The LAV capability will begin in December 2004 with a company, with 1 RNZIR expected to become operational at the end of 2005. With the current operational tempo and the challenges of recruitment and retention the NZDF faces, the delivery of a complete second battalion capability will be delayed until sufficient personnel are available to be assigned.

In addition, recommendations have been made to Government for the Special Operations Equipment project and Army Engineering Equipment, with acquisition expected to commence mid-late 2004.

Work on an NZDF Intelligence, Surveillance and Reconnaissance (ISR) study is nearing completion. This will identify requirements for the Land ISR project and guide development on other projects that might have an ISR component. Work to refine options to consolidate air operations at Ohakea is being progressed with recommendations due to the Government towards the end of 2004.

In summary, it has been an extremely busy year for capability development in the NZDF with considerable progress being made by a small but very dedicated team of both NZDF and MoD personnel. Of the projects in the 2003 LTDP category of “Projects approved in principle by Government “, all are either in the acquisition phase or contracts are expected to be awarded mid-late 2004. Of the three projects “necessary to avoid the failure of policy”, the Special Operations Equipment will shortly be considered by Ministers, the Joint Command and Control system is progressing as is the helicopter replacement project. Of the six projects “necessary to provide a well-equipped land force”, two will be in the acquisition phase by the end of 2004 and a precursor study for the Land ISR project has commenced. There are six projects in the final category of “projects necessary to avoid significant risks to policy” which are not due to commence until FY2008/09, although some preliminary work has commenced. Of the 22 equipment projects on the LTDP, only seven still remain in the study phases.

The disposal of the Skyhawk and Macchi aircraft continues to be the subject of commercial negotiations. There are purchasers and back-up purchasers for both aircraft types, however sales are a complicated process, commercially sensitive and have to respect the imperatives of both the original manufacturing nations and the purchasing governments.

The Capability Requirements Directorate in Development Branch HQNZDF, established in February 2003, has a focus on strategic assessment and analysis to assist in determining the needs of the NZDF well beyond the current LTDP. A key achievement has been the introduction of the Foundations of New Zealand Military Doctrine in May 2004. It is the first edition of what will be the NZDF’s key doctrinal publication and marks a significant milestone for the NZDF. Strategically focussed, its purpose is to provide the fundamental principles that guide the employment of New Zealand military forces across the full spectrum of operations.

The NZDF and MoD have completed development of the Defence Capability Management Framework, which provides a whole-of-life approach to projects from inception through to acquisition, introduction into service and disposal. The framework was approved in April 2004 although its principles have been used to provide governance oversight and management of projects since late-2002. This framework provides for wider involvement across Defence in the capability decision-making process, enhances jointness, cements the partnership with MoD, and ensures government departments and civilian agencies are consulted as appropriate on capabilities that have utility for a variety of stakeholders.

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Defence Organisation

Defence has made good progress on a number of significant initiatives designed to improve jointness and collaboration between the MoD and NZDF and within the NZDF itself.

Implementation of the Review of Accountabilities and Structural Arrangements between the Ministry of Defence and the NZDF (RASA) is underway.

Given the importance of strengthening the culture of collaboration and information sharing between our two departments, and the desire to strengthen our joint strategic planning capability, priority was given to establishing a Vice Chief of Defence Force position. The VCDF and MoD Deputy Secretary Policy and Planning now jointly direct the activities of the strategic staffs of the two departments on issues where the two Chief Executives share accountability. They report to the Office of Chief Executives. They also provide leadership of change and the focus for strengthening the culture of collaboration.

The NZDF and MoD are working together to tackle the pressing need for alignment of systems. The first phase has been to implement a Capability Management Framework that ensures that investment options presented to Ministers have been developed in a fully collaborative and consultative manner. This framework sets out joint processes and consultation mechanisms for management of military capability requirements from the initial policy work that determines need through to introduction to service of the required capability. The next phase is the ongoing refinement of the framework and alignment of other related departmental systems.

While the culture of sharing information can be instilled through improved consultation processes and clearer definition of shared accountabilities and tasks, there are procedural and structural barriers to be overcome. A joint working group has been established to examine the communications and information systems required to enable effective information sharing and collaboration between our two organisations. As a preliminary step it is planned to establish an electronic collaborative workspace area which NZDF and MoD staff can assemble information and jointly develop papers. Work will then continue on developing a common IT environment that provides shared office functionality and wider information access.

Conclusion

This year’s report highlights that the NZDF has once again faced a period of continued international challenges that have placed significant demands on our personnel and equipment. Coupled with this are the efforts to maintain our current capabilities while meeting the Government’s modernisation plans. The integration of new strategic-lift aircraft, the arrival of NZLAV, the progress made with other major acquisition or upgrade projects, the publication of the Capability Management Framework and the Foundations of New Zealand Military Doctrine, are all major steps in the development of a modernised and sustainable Defence Force. And these have been achieved during a time of continuing high operational tempo including deployments to some of the most dangerous regions in the world.

While equipment and policies are significant enablers to achieving Government tasks and goals, Defence remains primarily an organisation of people and attracting the right people remains a priority. The Defence Force team has performed creditably throughout the world; ensuring that the NZDF remains staffed by a team of highly skilled and motivated people will remain an on-going challenge in the years ahead. Only by matching the best people with the best equipment can we maintain the capabilities our personnel currently demonstrate worldwide.

As in past years I would like to express my sincere gratitude to the men and women of the NZDF who have, and continue to apply the highest levels of professionalism and service in support of New Zealand. I would also like to add that our people conduct themselves with the support of the public of New Zealand and to them we owe our thanks.

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 Policy

New Zealand’s Defence Policy Employment Contexts

Overview of Services

Royal 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 Information

Statutory 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 in June 2003).

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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.nz

The RNZN is a versatile force of trained sailors, Volunteer Reservists and civilians, operating ships and helicopters capable of conducting a wide range of sea–borne operations throughout our nation’s area of interest. The RNZN’s Mission is:

“To provide fully trained, supported and effective Naval Forces to Team Defence Force for the protection of New Zealand and its widest interests”

While achieving the mission, the Navy strives to attain its vision:

“To be the best small–nation Navy in the world”

Organisation

The home of the Navy 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. In addition, the Naval Dockyard is managed under contract by Vosper Thornycroft Ltd, who also undertake extensive commercial work.

The Chief of Navy and his Staff are based in Wellington to provide advice to Government through the Chief of Defence Force.

Navy contributes approximately 50 personnel to the Headquarters Joint Forces New Zealand.

Royal New Zealand Naval Volunteer Reserve units are established in Auckland, Wellington, Christchurch and Dunedin, with a smaller unit in Tauranga. An Inshore Patrol Craft, manned by the Volunteer Reserve, is based in each of the four main centres.

The 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).

Major Activities

The last year saw the continued high operational tempo experienced by the Navy in recent years:

— The ANZAC Class Frigate TE MANA made a second deployment to Operation Enduring Freedom (The UN–sanctioned international operation against Terrorism) to join the Multi–National Interception Operation (MIO) in the Arabian Gulf. This operation has highlighted the ability of RNZN frigates to be re–tasked at short notice (TE MANA was already on another deployment when the decision was made to commit her in support of Operation Enduring Freedom) and to integrate successfully into multi–national coalition forces. This repetitive and difficult operation is intended to deny Al Qaeda forces use of the sea as a means of communication. TE MANA will return to NZ in September 2004.

— The other ANZAC Class Frigate, TE KAHA has been busy generating Directed Level of Capability (DLOC) over the period, including an externally validated DLOC assessment conducted in September to October 2003.

— The Leander Class Frigate CANTERBURY suffered a fire to the auxiliary switchboard over the period. This necessitated some unscheduled repair work before the ship was able to continue with training and MAO&T.

— The tanker HMNZS ENDEAVOUR began the year conducting a DLOC assessment (work–up) in the Australian Exercise Areas. After successfully achieving the required standard, a main–engine defect caused the ship to return to NZ earlier than had been originally intended, for a scheduled maintenance period.

— The Diving Support ship HMNZS MANAWANUI continued to show her versatility for diving operations and training, resource protection duties and in defence diplomacy tasks. As the year ended, MANAWANUI was deployed to the South Pacific for defence diplomacy and in readiness for an exercise with the French armed forces in New Caledonia.

— The RNZN Operational Diving Team (ODT), Diving School and Hyperbaric Medical Unit continued to train for their military diving role. The ODT took part in an exercise with their Australian counterparts and in a multi–lateral exercise with 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 undertook a variety of tasks throughout the year, including resource protection operations in conjunction with DoC, MFish, Customs and Police, as well as naval tasks and Volunteer Reserve training.

http://www.navy.mil.nz

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— HMNZS RESOLUTION continued in its military hydrographic role and conducted contracted tasks for coastal and off–shore hydrographic survey for LINZ. During the period the ship completed the survey of the approaches to Auckland and commenced the approaches to Tauranga.

— While the ships often provide the most visible outputs of the Navy, there are several less obvious, but nonetheless vital, elements of the Navy. 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 UN Peace Support Operations.

Future Direction

The immediate future of the Navy remains focused on Project Protector, the plan to acquire a Multi–Role Vessel for sealift and sea–training, along with two Off–shore Patrol Vessels and four Inshore Patrol Vessels. With the contract about to be signed, the Navy is now working on the plans to introduce these capabilities into the fleet as efficiently as possible, and ensure that they are producing outputs as soon as possible after delivery, while at the same time maintaining current outputs.

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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 (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), signals (2 Signal Squadron), artillery (16 Field Regiment), engineers (2 Engineer Regiment), logistics (2 Logistic 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 Logistic 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

The main effort for the Army during 2003/2004 was the regeneration of the Battalion Group from East Timor. After the withdrawal of this force, the effort shifted to an extensive regeneration programme to refurbish equipment and to realign the training focus towards conventional combat operations in order to prepare Army elements for any other eventuality. While these activities were the priority for the Army, there have been numerous smaller commitments that were maintained in support of UN and other coalition operations around the world.

Future Direction

The focus of the Army planning and policy staff during 2003/04 was on the forthcoming motorisation of the Army. The introduction into service of the Light Armoured Vehicle (NZLAV) began in late 2003. These wheeled armoured personnel carriers together with the future procurement of Light Operational Vehicles (LOV) to replace the aging Landrover fleet, communications equipment, fire support weapons, alerting and cueing system, engineering mobility equipment, and other support items will assist the Army to develop a light mobile force capability based on a motorised Battalion Group that will be able to operate effectively

http://www.army.mil.nz

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across the spectrum of military operations envisaged by Government. This programme of transition will have a considerable impact on all aspects of Army training, organisation, personnel, logistics and support functions. While this programme is underway, the Army will continue to maintain its ability to provide forces to meet concurrent commitments.

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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, long range 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 provide five SH–2G(NZ) Seasprite helicopters in support 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 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 Assistant Chief of Air Force’s staff for Plans, Development, and Resources 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 Base 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 the Aeronautical Configuration. Until May 2004 the NZDF Command and Staff College was also located at RNZAF Auckland. The Directorate of Aeronautical Configuration is centred at RNZAF Ohakea, along with units of Logistics Wing and Aeronautical Procurement.

Major Activities

During 2003 all three RNZAF Force Element squadrons, the Operational Support Squadron, and units from throughout the RNZAF were heavily committed to coalition operations. No. 3 Squadron deployed four aircraft to the Solomon Islands in July 2003, providing tactical air transport and aero–medical evacuation capabilities to the Australian–led force. No. 5 Squadron successfully completed its deployment to the Arabian Gulf in support of Operation Enduring Freedom. During the nine month operation crews flew in excess of 1000 hours and completed 97% of assigned tasks. No. 40 Squadron returned from Kyrgyzstan in early October following its successful contribution to Operation Enduring Freedom, providing a tactical airlift capability to the coalition force in Afghanistan.

The Air Force successfully completed the introduction of the two Boeing 757–200 aircraft into service and retired the two Boeing 727 aircraft. The new aircraft achieved a high rate of availability and were used to support a number of high profile activities, including CHOGM and VIP flights throughout Asia, the Middle East, and Africa.

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.”

http://www.airforce.mil.nz

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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. The new Boeing 757 aircraft will be modified to fit cargo doors, 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 2017.

— New sensors, mission management, communication and navigations 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.

— Both the Iroquois and Sioux helicopters will be replaced with new aircraft to meet the utility and training requirements.

The project to consolidate the RNZAF’s capabilities at Ohakea is under business case development prior to presentation to Cabinet for approval. The decision to dispose of RNZAF Base Auckland will be as a consequence of the relocation decision. HQNZDF is consulting widely with other Government agencies during the preparation of the fully costed proposals.

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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.

Major Activities

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 deployment of HMNZS TE MANA to the Arabian Gulf in support of Operation Enduring Freedom.

— The deployment of a P–3K Orion aircraft in the Arabian Gulf to assist in Operation Enduring Freedom.

— The deployment of a C–130 Hercules aircraft and air loading team to assist in Operation Enduring Freedom.

— 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 on Niue during Cyclone HETA (Pacific Relief Niue).

— Provision of NZDF personnel to provide disaster relief assistance within the Lower North Island and Picton areas (Operation Awhina).

Future Direction

With the current operational tempo set to continue during the next 12 months, HQ JFNZ will plan and conduct activities and exercises for NZDF Force Elements that will culminate in the NZDF Exercise JOINT KIWI. This exercise is a joint and combined exercise to be held in both the Tasman Sea and the North Island in February 2005 and will involve a significant number of NZDF and ADF personnel and equipment.

Forces and Locations

NZDF personnel maintained a high operational tempo throughout the reporting period. Activities included overseas deployments for combat, peace support and logistical support operations, and tasks within New Zealand to sustain our forces overseas.

These operations are summarised below, and are detailed in the Statement of Service Performance under Output Class 16, Operationally Deployed Forces.

Location Contribution DescriptionAfghanistan Four staff officers supported the International Security Assistance Force (ISAF)

Kabul. A ninety–five person Provincial Reconstruction Team, Special Air Service forces and staff officers participated in the US led coalition force for Operation Enduring Freedom (OEF). Two NZDF personnel assisted in the training of the Afghan National Army as part of a British Army Training Team.

Antarctica Ninety–two NZDF personnel provided terminal and logistics support at Christchurch, McMurdo Station and Scott Base during the period Oct 03 – Feb 04 in support of Antarctic New Zealand.

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Location Contribution DescriptionArabian Gulf Approximately 170 NZDF personnel were deployed to the Arabian Gulf in support

of Operation Enduring Freedom. In Jul 03 HMNZS TE MANA commenced its return to New Zealand after five months conducting maritime interdiction operations. HMNZS TE MANA redeployed to the Arabian Gulf in Apr 04 for a period of six months. A P–3K Orion aircraft also deployed in May 03 and returned to NZ in Feb 04. Nine NZDF personnel remain in the Arabian Gulf to support air and sea movements for Operation Enduring Freedom.

Bosnia Six staff officers supported the Headquarters Multinational Brigade of the Stabilisation Force, (SFOR). A ten–person contingent has also been attached to British units of SFOR.

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

East Timor Eight 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 Two officers served with the United Nations Mine Action Service during the period Jun 03 – Dec 03. Sixty–one NZDF personnel worked alongside the Multi–National Division South East (MNDSE) conducting humanitarian aid tasks and reconstruction projects in Basra.

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).

Korea Eleven NZDF personnel departed NZ in Mar 03 for a tour with the United Nations Command Honour Guard Company in Seoul returning to NZ in Aug 04. One NZDF staff officer deployed late Jun 04 as an assistant operations officer within Head Quarters United Nations Command Military Armistice Commission (UNCMAC) in Korea.

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 supported the Accelerated De–Mining Program in Mozambique.

Sierra Leone Two NZDF officers were deployed with the United Nations Assistance Mission in Sierra Leone (UNAMSIL).

Sinai Peninsula A twenty seven–person contingent provided expertise in Force operations and training to the Multinational Force and Observers (MFO) in El Gorah, Egypt.

Solomon Islands Approximately 105 NZDF personnel deployed to the Solomon Islands in Jul 03 as part of an Australian–led multinational deployment. The initial deployment included a command element, infantry company, engineers, combat service support personnel and RNZAF UH–1H helicopter detachment consisting of four helicopters. The current commitment of 88 NZDF personnel consists of a command element, an infantry platoon and two UH–1H helicopters.

United States of America

Three NZDF personnel provided a NZ National Planning Element (NPE) in Florida. The NZ NPE supports NZDF involvement in Afghanistan and Iraq.

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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 College

Overseas 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

HMNZ DockyardNaval Combat ForceHMNZS CANTERBURY

HMNZS TE KAHA

HMNZS TE MANALogisticsHMNZS ENDEAVOUR (Fleet Replenishment)

HydrographicHMNZS RESOLUTION

Diving SupportHMNZS MANAWANUI

Sea TrainingHMNZS KAHU

Inshore Patrol CraftHMNZSs MOA, KIWI, WAKAKURA, HINAU

New Zealand ArmyPapakura1 NZ SAS Group

WaiouruArmy 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 2004

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 2004

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 2004

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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2

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Royal New Zealand Air Force — 30 June 2004

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 2004


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Personnel Summary

Personnel Composition

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NZDF Personnel Total Numbers By Year

Defence Expenditure

Defence expenditure for the year ended 30 June 2004 was $1.529 billion, exclusive of GST. Of this total, $289 million (18.9%) 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 2003/04, are:

— Chiefs of Staff Committee 16 meetings

— Board of Review 3 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

http://www.nzdf.mil.nz

http://www.navy.mil.nz

http://www.army.mil.nz

http://www.airforce.mil.nz

http://www.defence.govt.nz

http://www.airforcemuseum.co.nz

http://www.armymuseum.co.nz

http://www.navymuseum.mil.nz

mailto:[email protected]

mailto:[email protected]

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Legislation Administered by NZDF

New Zealand Defence Force:

Acts

Visiting Forces Act 1939 1

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 Orders

Air 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

1 The Visiting Forces Bill 2004 was at 30 Jun 04 awaiting Vice–Regal approval.

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Legislation Administered by NZDF (cont)

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

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

Visiting Forces (Australian Naval Forces) Order 1978

Visiting Forces (Commonwealth Deserters and Absentees) Order 1983

Visiting Forces (Fiji Military Forces) Order 1960

Visiting Forces (New Zealand with Australia and United Kingdom) Order 1979

Visiting Forces Order 1980

Visiting Forces (Penal Arrangements) Order 1963

Visiting Forces (Relative Ranks) Regulations 1985

Visiting Forces (Tongan Forces) Order 1983

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

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Legislation Administered by NZDF (cont)

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:

Acts

The War Pensions Act 1954

The Veterans’ Affairs Act 1999

The Patriotic and Canteen Funds Act 1947

Regulations and Orders

The 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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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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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: establish and undertake an implementation project to implement Government-approved recommendations of the Review of Accountabilities and Structural Arrangements (the “Hunn Review”); contribute to any new capability reviews/studies that may be required by the Government during the period; extend CDF’s Planning Guidance to have a five year focus (in line with the Government’s “Management by Outcomes” project and NZDF Statement of Intent (SOI) development); complete and implement the Capability Management Framework; upgrade required Analysis Tools and Guidance for setting Future Capability Requirements and construct an initial set of Future Capability Requirements that meet required standards of functionality; and 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:

Under the RASA implementation project a Vice Chief of Defence Force (VCDF) was appointed in February 2004. The strategic policy and planning functions of the NZDF and MoD have been placed under the joint direction of the VCDF and Deputy Secretary Policy and Planning. An electronic collaborative workspace is to be established to allow staff of the two departments to collaborate on documents and manage the supporting information. It is intended that migration to a shared IT environment will follow. A collaborative system for formulating capability investment advice and managing acquisitions has been implemented across the two departments.

Work continues on a number of projects to create joint agencies within the NZDF, and evaluation of a wider joint operational support framework is to occur.

In line with the Government’s “Management for Outcomes”, the NZDF has developed its first SOI and includes the development of the Defence Outcomes. This includes an Intermediate Outcome on the capability requirements beyond the Long Term Development Plan.

A Capability Management Framework (CMF) that recognises the structural and procedural changes recommended by the Review of Accountabilities and Structural Arrangements between the MoD and the NZDF (RASA) and as endorsed by the Government, has been implemented. It has been jointly developed by the MoD and NZDF with consultation with five Government departments. The CMF is a framework of governance and management that ensures joint development of advice to Government on long-term capability investments. It was approved as a draft work in progress on 22 April 2004, is now operational and replaces the capability aspects of its predecessor the Defence Planning System. Other appropriate non-capability aspects of the DPS have been identified and reassigned to appropriate officials. They will be reviewed to ensure that relevant parts are aligned with the CMF to better support joint and collaborative work within and between the MoD and NZDF. The DPS is no longer operational.

HQ JFNZ has continued to refine standard operating procedures and concepts to ongoing joint and combined operational planning tasks to meet current NZDF Employment Context requirements for operationally deployed forces.

The existing Lessons Learned (LL) process captures Key Measurement Area and Key Performance Area data in respect to NZDF operations and exercises. This data is currently available via a HQ JFNZ web site. In Aug 04 it is planned to introduce a new LL application that will significantly enhance information accessibility and the ability to analyse LL data.

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).

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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; continuing to implement the recommendations of the Gender Integration Audit; continuing to contribute to a safe work environment within the NZDF; implementing policies to ensure that personnel are appropriately recognised and rewarded for service; maintaining a framework for organisational monitoring; and completing the independent review and evaluation of the NZDF Civil Staff Human Resources Management function.

Performance:

The development of competitive personnel policies and practices sufficiently attractive to retain personnel has continued to be the focus for Personnel Branch. This has involved a targeted pay adjustment for NZDF military personnel, the refinement of operational allowances payment mechanisms, the establishment of a medals directorate, and the development of personnel policies to support operational effectiveness e.g. the prevention of substance abuse, and accommodation assistance policies.

The 2004 pay adjustment was aimed at closing the gap between NZDF median salary levels and those in the wider state and public sectors. The series of adjustments over recent years has been instrumental in lowering NZDF attrition rates and increasing satisfaction levels with NZDF salary rates. The 2004 pay adjustment sets in place a 2.5% across the board increase with targeting of specific ranks to address recruitment and retention issues.

The mechanism for the payment of operational allowances through the Ministry of Social Development Defence Force Allowance Programme has been refined to be more responsive and to cover a wider range of operational missions.

Collective employment agreements for civilian staff remained in place throughout the year. A mid-term salary increase of 3% for staff on the general collective was negotiated in August 2003 and this was later extended to all staff. A remuneration working party including representatives of staff at the Defence Technology Agency has been meeting, and a proposed remuneration structure for scientific and technical staff has been developed.

The concept of a Joint Recruiting System has been approved in principle and will put in place one system for the whole of the NZDF and will support individual recruitment and wider planning of the recruitment requirements.

Overseas recruiting efforts for the Services have been hindered by difficulties in meeting immigration requirements. Discussions with the New Zealand Immigration Service (NZIS) to work through these issues have taken place. In the first instance the accredited employer status previously approved for Navy has now been extended to cover all Services. Other negotiations are underway to reduce barriers in the skilled migrant category.

The framework for a competency-based placement, assessment and promotion procedure for officers has been completed. The development of a revised officer reporting and management tool is proceeding and is expected to be completed by the end of 2004. The on-line performance management tool is to be trialled with a selected group of civilian staff.

Evaluation of progress on implementing recommendations contained in the Gender Integration Audit of the NZDF has continued. This work is expected to be completed by the end of 2004.

Further development of training/education on equity that is provided as part of Service promotion/qualifying courses has continued. The work will result in consistent training and the provision of train-the-trainer support to the Services to enable them to manage the training effectively.

A comprehensive substance abuse policy is being developed, with implementation due to commence later in 2004. The policy has been developed in close consultation with the Institute of Environmental Science and Research, and takes into account the recent Employment Court ruling regarding the introduction of substance abuse testing in Air New Zealand.

Work to contribute to a safe work environment has also continued. Involvement in the Accident Compensation Commission Partnership Programme continues to have very positive benefits for the NZDF in terms of financial savings and the provision of more effective rehabilitation.

A medals directorate has been established within the HQNZDF Personnel Branch. The directorate is responsible for the research of outstanding medallic grievances and the ongoing development of NZDF medals policy and procedures. A comprehensive medallic website has been developed and was formally launched in December 2003.

The government instituted a New Zealand General Service Medal to recognise current service in Iraq and the New Zealand General Service Medal (Solomon Islands) was updated to recognise the service of members of the NZDF and Police who have served with the Regional Assistance Mission in the Solomon Islands.

Work on administering the NZDF Ongoing Attitude Survey has continued. The results from a full twelve-month

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cycle have now been collated, analysed and reported by Service. This survey is generating a considerable amount of data. In the twelve-month period to March 2004, 1,440 military and civilian personnel across the NZDF responded to the survey. This constitutes a 46% response rate, which is regarded as very favourable for this type of voluntary survey. As the pool of responses grows, the knowledge is expected to prove invaluable as an aid to HR policy development.

The role of the Defence Employer Support Programme (DESP) has been enhanced during the year. The role of the DESP is to promote the benefits of part-time service in the NZDF to the employer community and to educate Reserve and Territorial personnel about how to enhance their relationships with their employers. It is based on similar highly successful programmes in the United Kingdom, Canada and Australia. The main focus during the year has been to prepare for the passing of the Volunteers Employment Protection Amendment Act with information and resources for employer support initiatives.

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, developing capability options, seeking approval to proceed with acquisitions, and implementing acquisition plans for the purchase of equipment on the NZDF Long Term Development Plan (LTDP) to maintain and develop the capabilities of the NZDF to meet the Government’s defence objectives within agreed funding guidelines; continuing investigation of a modern NZDF Command, Control, Communications Computer and Intelligence (C4I) System [Project called Joint Command and Control System (JCCS)]; develop implementation plans for NZDF Project Reachback (Theatre High Capacity Communications (THCCS) and New Zealand to Theatre communications); developing a NZDF policy for Joint and Combined Doctrine; establishing the number of uniformed and civilian personnel required to support operations - given the modernised capabilities being introduced into service; developing a framework for project alliancing with selected contractors to progress Defence Technology Agency (DTA) concepts/ prototypes to a fielded and supportable capability; and, in partnership with other government agencies, developing measures to meet the resource and border protection challenges to New Zealand in accordance with government policy; implement military-grade messaging system to replace existing signals infrastructure; and implement a cryptographic upgrade.

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, released on 11 June 2002 and updated in June 2003, 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:

— The supplier of Project Protector vessels, comprising a multi-role vessel, two offshore and four inshore patrol vessels, has been selected.

— A contract has been awarded for the Light Operational Vehicles with the commencement of delivery of the first vehicles expected in September 2004.

— Orders have been placed for the Javelin missile (Medium Range Anti-Armour Weapon) and for the automatic cueing system and Identification Friend or Foe to complete the Very Low Level Air Defence System.

— Inspection of the preferred supplier for the automatic grenade launcher for the Direct Fire Support Weapon is under action.

— Recommendations have been made to the Government for Special Operations equipment and to initiate the seeking of suppliers for Army engineering equipment.

— Two Boeing 757s were delivered mid-2003 and have since been used extensively on a range of tasks. Work has continued to finalise the modification programme to provide a freight capability for these aircraft, with modification planned for FY 2005/06.

— A preferred tenderer has been selected for the P-3K Orion mission systems and communications and navigation upgrade, with final recommendations to the Government expected in August 2004.

— Evaluation of the Best and Final Offer for the C-130 life extension project is nearing completion, with final recommendations to the Government expected in August/September 2004.

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— Potential suppliers of replacement helicopters for the UH-1H Iroquois have been identified and a Request for Proposals is expected to be issued in the 3rd quarter of 2004. Work has also continued considering possible options for the training helicopter requirement.

— The Joint Command and Control System Project Definition Study has been completed and the requirements are being defined and an acquisition strategy developed.

— Work to refine options to consolidate air operations at Ohakea is progressing with recommendations to the Government expected by the end of 2004.

— Preliminary work has begun to consider potential synergies between the Australian ANZAC ship upgrade programme and likely requirements for New Zealand’s ANZAC ship self-defence upgrade.

— The completed NZDF Intelligence, Surveillance Reconnaissance (ISR) study will guide options for the Land ISR project and other ISR related requirements.

The NZDF is undergoing a most extensive modernisation programme. Moreover, capabilities are being developed in the context of conducting joint, integrated, multi-national and multi-agency operations within a contemporary security environment. The military capabilities that are being developed and introduced into service over the next few years will improve the ability of the NZDF to respond to a range of future security challenges including both conventional threats and emerging challenges such as trans-national threats. They will also embrace the emerging need for the NZDF to plan, participate and conduct Effects Based Operations.

The Project Reachback study of requirements for improved national rear-link and intra-theatre communications for deployed NZDF forces was completed in May 04 and is currently being staffed for approval. Two projects that will significantly enhance NZDF joint HF radio and satellite communications for deployed forces are underway and will be completed by Dec 04. Further satellite communications and deployable C4 modernisation in support of Reachback objectives are funded for 2004/05.

The “Foundations of New Zealand Military Doctrine” was released and is the first foundation block of NZDF policy for Joint and Combined Doctrine.

The NZDF continued to contribute to the ongoing development of the National Maritime Coordination Centre (NMCC) through its hosting and support of the NMCC at HQ JFNZ; participation in the Network of Chief Executives that oversees the operation of the NMCC; participation in the NMCC Working Group; and the provision of maritime patrol assets, expertise and intelligence. The NZDF facilitates interagency cooperation, involving Police, Immigration, Customs, Fisheries, Conservation, Maritime Safety Authority, and Foreign Affairs and Trade that in turn enhances New Zealand’s maritime security environment.

The Maritime Intelligence Coordination Centre (MICC), located at HQ JFNZ and manned by NZDF, Customs and Fisheries personnel, also supports the NMCC by coordinating the operational patrol tasking of the civil agencies.

A contract for the provision of the NZDF Military Messaging System was signed in Jun 04. Implementation of the initial operational capability will be completed by Apr 05 and full operational capability by Dec 05. The NZDF Electronic Key Management System has been introduced into service and will become operational in Jul 04. The review of NZDF requirements for future cryptographic capabilities has been delayed by the loss of specialist staff but will remain a priority for completion during 2004/05.

Key Priority 4: Defence Diplomacy

Enhanced and on going defence diplomacy and defence cooperation with regional countries.

Targets:

This involved: 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 on 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; 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. It is envisaged that the replacement Visiting Forces Act will be passed in 2004.

Performance:

There have been a number of successful bilateral defence visits, political/ military talks and security discussions with key partners in the region. The Minister of State for Defence from Singapore and the

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Commander US Pacific Command visited in 2004 and bilateral discussions with Australia, Singapore, Malaysia, China, Japan and France have taken place this year. Defence has been represented at the annual round of ASEAN Regional Forum (ARF) meetings. New Zealand has assisted in the development of an annual Security Policy Conference within the ARF. In May, Defence sent representation to the first anniversary meeting of the Proliferation Security Initiative (PSI).

Ministerial and Cabinet submissions have been made in respect of deployments to Operation Enduring Freedom (SAS, Frigate, extension of the Provincial Reconstruction Team). 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).

Preparatory work is underway for the ANZ Consultative Committee and Ministerial meetings to be held in July 2004. The various working groups have been meeting throughout the year and reported to the ANZ DCG meeting in April 2004. Given FPDA Defence Ministers’ direction to examine further areas of cooperation to reflect the growing incidence of non-conventional threats, a ‘think-piece’ paper on the future direction of the FPDA, to which New Zealand defence officials contributed extensively, was endorsed by Ministers at their meeting in June. 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.

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;

— developing a Corporate Management Information System;

— developing a Corporate Performance Management System;

— implementing an Integrated Land and Facilities Management System (ILFMS);

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

— commencing a comprehensive review of the Military Justice System (this will be conducted during the period 2003-2006);

— publishing Joint Logistics Training policy;

— 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); and

— implement a CIS Infrastructure upgrade.

Performance:

The NZDF has continued to make significant progress within Key Priority 5, leveraging both organisational change and improved technology to improve effectives and efficiency. This effort, which included several multi-year projects and programmes will continue for the foreseeable future.

A Directorate of Capability Programme Support (DCPS) has been established in HQ NZDF Development Branch to support the governance and management of all capability projects within Defence. This includes specifically those capabilities on the Long-Term Development Plan, the Future Capability Assessment and the Capability Programme Minor. The DCPS is being developed to be the centre of excellence for project management providing methodologies, mentoring, monitoring and oversight services as well as secretarial support for governance and management architectures. The DCPS also initiates the processes for the establishment of integrated NZDF and MoD Capability Project Teams. Efficiencies in management and administration are being implemented through the assessment of an electronic reporting and monitoring system.

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The NZDF continues to participate in e-Government activities, including senior representation on the e-GIF Standards Committee. There are numerous instances of inter-departmental collaboration, including geospatial information services, operational information sharing and the extension of aspects on NZDF infrastructure for use by MOD.

Major elements of the Corporate Management Information System, including Performance Management Systems for Army and Air Force and some corporate information modules for personnel and finance, have now been implemented.

The Army and Air Performance Management Systems (PMS), which are elements of the Corporate Management Information System, have now been successfully embedded and aligned. Progress is well advanced in developing an enhanced system for Navy, based within the SAP environment. This pilot system will be implemented within Navy and subsequently migrated to the other Services once it is proven. At the NZDF Corporate level, design of a suitable PMS has been delayed until the outcomes of the structural reviews are clear, so that the Corporate Performance Management System (CPMS) can reflect any changes. It is planned that the CPMS will be based on the additional reporting level within the SAP system under development.

The first phase of the Integrated Land and Facilities Management System (ILFMS) has been completed, but the timeframe extended through to June 2005 to allow full development and implementation of the complete system.

The NZDF continues to facilitate and maintain comprehensive media coverage of domestic and external activities, exercises and deployments. Since 1 November 2003 this has occurred within the integrated framework of the new Defence Public Relations Unit (DPRU). Since the creation of the DPRU there have been a number of ongoing initiatives to improve efficiency, the use of resources and the delivery of PR services to the MoD and NZDF. It is intended that there will be a review of the new structure in the latter half of 2004, to ratify its organisation and practices.

Significant progress has been made towards achieving the objective of creating a single consistent information technology and communications environment across the NZDF. The NZDF Communications Information Systems Strategy has been completed under Project Foresight – but will not be progressed until the requirements of the RASA study are known. A Communications and Information Services Architecture Office has been established. The Joint Information Systems Agency (JISA) has been established and will come into effect on 1 Jul 04. The JISA will provide a single centralised structure for pan-NZDF communications and information services and support.

The NZDF, in cooperation with MoD, has identified the appropriate analysis tools needed to set future capability requirements. These have been incorporated into the Strategic Capability Planning Process of the Capability Management Framework. Work is underway to populate the analysis tools with the necessary information so that they may be used to determine the Future Capability Requirements of the NZDF.

Further work on the Defence Medical Review (DMR) is awaiting the outcome of the recent MoD review into the NZDF Mobile Medical and Surgical Resources, as the recommendations will likely affect the DMR requirements.

The Military Justice Review mentioned in the NZDF’s response to the 2003/2004 Estimates Questionnaire will continue during 2004/2005. This review has already identified a number of provisions of the Armed Forces Discipline Act 1971, the Courts Martial Appeals Act 1953, and the subordinate legislation made under those Acts which are in need of update, amendment or repeal. The Government has carried the Armed Forces Law Reform Bill over to the 2004 Legislation Programme to facilitate these changes.

Enterprise Resource Planning has been further progressed. A Business Case supporting a Joint Engineering Management System has been produced and the project is awaiting implementation funding. The establishment of a Joint Logistic and Support Organisation is feasible and the project is currently in Phase 2, which will see the detailed design of the organisation being finalised by February 2005, followed by a phased implementation. A project to investigate the application of an automated asset tracking system has been started and a project aimed at investigating the NZDF’s management of its Intellectual Property has begun. These latter initiatives will be progressed during the next financial year.

An NZDF wide Whole of Life costing and management policy designed to support capital acquisitions and provide robust management of operating costs has been introduced. Multi-level training has been conducted and an IT support system has been identified and ordered.

Progress has also been made in upgrading the NZDF fixed CIS infrastructure. The upgrade of the fixed telecommunications network was completed by the NZDF on time and within budget in Dec 03. Changes have been implemented on the RESTRICTED network that improve reliability, disaster recovery and the ability to implement change. This work will be ongoing under the Desktop Services Commoditisation project that will introduce a single, centrally managed (by JISA) communications and computing environment across the whole of the NZDF. A range of projects are underway and planned to extend the capabilities of the NZDF SECRET network to support national and deployed force operations, including providing a platform for the needs of the replacement military messaging service and the future Joint Command and Control System.

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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.

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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.

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 Achieved

Quantity:

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: 15–20

– Reports and Briefing Papers: 200–250

– Ministerial Correspondence: 450–550

– Parliamentary Questions: 600–800

– Select Committee Reports: 5–15

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

– Oral Briefs: Numerous

2

11

411

391 (including 46 OIA requests)

505

No separate reports were required

315

Numerous

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Intelligence 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.

Biweekly Intelligence Summary 93

Oral briefs 279

Contributions to National Assessment papers 75

General Briefs 302

Intelligence Notes / Reports 40

Military Threat Assessment 53

Periodic Intelligence Summary 35

Strategic Intelligence Assessments 1

Security Surveys 10

Security Inspections 46

Security Threat Assessment 20

Southern Oceans Fisheries Weekly (in season)

Quality:

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

Over 90% of draft replies to written Parliamentary Questions were answered within the required time frame. During the year, the requirement for responding to oral Parliamentary Questions was changed. Instead of preparing draft replies, NZDF was asked to respond only to specific requests for relevant information and to make available a suitable officer to provide a briefing, if required. NZDF complied.

The 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.

97% of first drafts were accepted by the Minister.

90% of all other responses accepted without amendment.

Over 90% of all responses were accepted without substantive amendment. The target was being achieved by the fourth quarter. During the year, the Minister told CDF that he was pleased by the improvement in quality and timeliness of the draft replies to his office.

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Costs for Output Class 1 (GST Exclusive)

Actual 2002/03

($ million) Category

Main Estimates ($ million)

Supplementary Estimates ($ million)

Actual 2003/04

($ million)

Expenditure5.532 Personnel 5.466 6.214 6.3992.055 Operating 2.164 2.269 2.1190.161 Depreciation 0.327 0.141 0.1400.203 Capital Charge 0.191 0.161 0.1607.951 Total Expenses 8.148 8.784 8.818

Revenue8.321 Revenue Crown 8.105 8.732 8.7320.052 Revenue Other 0.043 0.052 0.0528.373 Total Revenue 8.148 8.784 8.7840.422 Net Surplus (Deficit) – – (0.034)

Cost by Output4.094 Output 1.1 3.856 4.623 4.5571.592 Output 1.2 1.849 1.893 1.9710.862 Output 1.3 0.936 0.938 0.9361.403 Output 1.4 1.507 1.330 1.354

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Output Class 2: Naval Combat Force


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

The Naval Combat Force (NCF) comprises two ANZAC Class Frigates (HMNZS TE KAHA and TE MANA), one Leander Class Frigate (HMNZS CANTERBURY), and five SH–2G Super Seasprite helicopters. These ships, with embarked helicopters, are able to operate almost anywhere in the world. They have a wide range of combat capabilities and are able to work within multi–national coalitions.

The role of the NCF is to meet military tasks, particularly in support of the Government’s regional and global objectives. The ANZAC Class Frigates are critical to the protection of New Zealand/Australian territorial sovereignty, for participating in FPDA activities, supporting our relationships with regional partners, and undertaking peace support operations in the Asia–Pacific region and beyond. CANTERBURY is the principal provider of the Navy’s sea training capability and provides support to regional initiatives and 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 maintain the capability of the ANZAC frigates’ self–defence systems to protect the Naval Combat Force against increasingly capable anti–ship systems and to address equipment obsolescence.

As part of New Zealand’s contribution in support of Operation Ariki; NZ’s contribution to the global war on terror, TE MANA has been deployed to the Middle East to Operation Enduring Freedom (OEF). The primary role of the NCF was to participate in Maritime Interception Operations (MIO) within the Gulf of Oman and South Arabian Gulf. This contribution helped to curb the shipment of weapons, drugs and people that support Al Qaeda and Taleban terrorist forces.

As a result of a switchboard fire, CANTERBURY spent an extended period in Auckland for repairs. Following the successful repair of the electrical equipment, CANTERBURY deployed to Australia in February 2004 to support the DLOC generation of TE MANA.

As a consequence of the fire, CANTERBURY was unable to support the Governor General’s state visit programme to the Pacific Islands in November and TE MANA’s programme was re–prioritised to support the activity.

Above: HMNZS CANTERBURY engages a target

Below: A Super Seasprite helicopter refuels at sea under the watchful eye of a Flight Deck crew member

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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.


Quantity:

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.

One frigate was available, with embarked SH–2G Super Seasprite helicopter, throughout the reporting period for regional or collective security tasks.

A second frigate, dedicated for low–level security challenges in New Zealand or South Pacific waters, was not available during the middle portion of the reporting period primarily due to the switchboard fire. This resulted in the priority tasks being assigned to other force elements. The embarked SH–2G Super Seasprite could not be provided during the latter part of the reporting period because of a requirement to complete important introduction into service work.

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

A third frigate was available, with an embarked SH–2G Super Seasprite helicopter, throughout the reporting period.

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

Shortages in key positions and branches continue to have an adverse impact on the NCF, particularly Bridge Watch–keeping and Warfare Officers, technicians and some Operations Branch personnel. While some improvement has been evident, the increased operating tempo has necessitated careful HR management to keep the NCF fully mission capable. The priority afforded to the ships has continued to have an adverse impact on the ability to fill shore posts.

Because manning the operationally deployed ANZAC Class frigates has been the priority, CANTERBURY has 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 remains lower than required; some action plans have been implemented during the period to address the shortages.

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

Current equipment has proven suitable for tasks conducted. However, risk is being carried on some weapons and sensors across the ANZAC Class.

The previously reported damaged SH–2G Super Seasprite returned to service in April 2004. Another Seasprite was rendered unserviceable at the end of the period and is scheduled to be repaired in NZ over the next few months.

Readiness:

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

Due to unprogrammed maintenance being required for CANTERBURY following a switchboard fire, it was necessary for the ANZAC frigates to share the DLOC 28, DLOC 60 and DLOC 180 responsibilities between them. Other DLOC criteria were met.

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.

TE MANA generated OLOC for MIO operations in the Middle East during the reporting period. The deployment caused the withdrawal of the NCF from an FPDA exercise with the consequential loss of a warfare training opportunity.

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The Maritime Operational Evaluation Team (MOET) coordinated and assessed all DLOC and OLOC training, with the two ANZAC Class frigates confirmed at DLOC during the period.

With the exception of the period of repair post the switchboard fire, CANTERBURY has maintained a level of training consistent with her allocated DLOC. This was validated by MOET during the period. The loss of 56 sea–training days due to the fire was significant. The loss of training was partially mitigated by absorbing the training across other areas of the Navy, but the impact of the lost training opportunities is still discernable.

To conduct DLOC Readiness training and Combat Viability exercises HMNZS TE KAHA will spend 145 days at sea (target range of 135–145), HMNZS TE MANA will spend 142 days at sea (target range of 135–145), and HMNZS CANTERBURY will spend 137 days at sea (target range of 135–145).

TE KAHA achieved 131 sea days.

TE KAHA commenced the year with a six–week DLOC generation work–up in Australia followed by support to the RAN Principal Warfare Officer (PWO) course. Provision of this support provides a funding offset for RNZN students attending courses in Australia.

TE KAHA also participated in the bilateral exercises Ocean Protector and TASMANEX with the RAN. These were followed by participation in the bilateral exercise Lion Zeal with the Republic of Singapore Navy (RSN). The exercise was conducted this year in New Zealand. The short–fall in sea days was due to a minor programme change.

TE MANA achieved 176 sea days.

The higher than planned sea days figure was due to the ship’s Output 16 tasking for Operation Ariki, and the programme re–prioritisation to support the Governor General’s South Pacific state visits. In early 04 TE MANA commenced a DLOC generation work–up during Exercises Ocean Protector and TASMANEX. These exercises were conducted in Australia and provide significant opportunities to enhance interoperability between the RNZN and RAN. Following OLOC generation, OEF MIO tasking has dominated TE MANA’s activities during the latter part of the reporting period.

CANTERBURY achieved 87 sea days.

The lower than planned sea days figure was a direct result of a fire in CANTERBURY’s switchboard during a Ministry of Fisheries (MFish) support operation on the Chatham Rise in October 03. The switchboard has now been repaired and CANTERBURY returned to sea in late February 04.

Other significant activities during the year included the provision of support to TE MANA’s work–up in Australia, re–supply of Raoul Island and associated DOC (OP NAVDOC), support to MFish operations at the Chatham Rise in April 04 (OP Hudson) and support to MFish and NZ Customs surveillance operations in May 04 (OP Hudson).

CANTERBURY has provided outputs consistent with designated LOC during the periods of availability. On this occasion the reduction in sea days has not caused a significant reduction in the ability for the ship to generate DLOC. The programming of additional in–company time for the ship has maximised the training output during the reduced seatime. However the reduction in sea days has caused a significant loss of training sea days for the NCF.

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The Seasprite helicopters will be under operational control of the RNZN (Maritime Component Commander) when embarked. Seasprite helicopters will fly approximately 670 hours (target range 630–710 hours) for embarked operations, and approximately 1130 hours (target range 1080–1180 hours) for shore–based DLOC readiness training.

Seasprite helicopters flew a total of 531 hours in support of embarked operations, and 746 for shore based DLOC readiness training. The reduced embarked hours were as a result of:

CANTERBURY’s reduced availability during the middle portion of the reporting period;

a period of reduced availability for the Seasprite to allow capability regeneration in the latter portion of the reporting period.

The much reduced shore based hours were a result of:

– The later than expected return of the damaged SH–2G from the US, and

– Serviceability issues with the remaining shore helos.

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; particularly for the higher–level combat capabilities.

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

The outstanding magnetic signature treatment of the ANZAC frigates has been addressed for TE KAHA. Although programmed this year for TE MANA, the activity was cancelled due to OP Ariki requirements.

Further progress in C4I technologies has been accelerated by the OEF MIO deployments and significant progress has been achieved resulting in improved interoperability with coalition forces.

The SH–2G Seasprite has demonstrated its range of capabilities, particularly at night, during embarked operations, and provided an effective adjunct to the frigates capabilities. Following a trial on TE KAHA, the Mk11 Depth Charge was certified for use.

Spares support for the ANZAC Class continues to carry some risk, although this has not had a major impact on combat viability over the period.

CANTERBURY continues to be actively managed to ensure operation until decommissioning (currently May 2005).

Effective standardisation when working with friendly forces.

Standardisation has been proven in Coalition 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 has generated OLOC for OEF MIO. TE KAHA remained capable of generating OLOC.

Munitions, expendable and technical stores available, as specified in the Naval Operational Readiness Criteria Statement and Warrant of Armament Stores.

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

Sustainability:

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

It was considered that the former Contingency Reserve Stock (CRS) levels may have carried risk in some areas. A review of these levels, to quantify the risks, and balance them against requirements has been completed. There are sufficient stocks for OLOC with risk in only a few areas.

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Personnel available for sustainment / rotation of crews.

The training system continues to produce sufficient replacement personnel to sustain the frigates on–task, although this sustainment is fragile in some key areas and has 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 2002/03




Actual 2003/04

($ million)


Revenue460.551 Revenue Crown 472.890 494.574 494.574

2.065 Revenue Other 2.827 2,320 1,682462.616 Total Revenue 475.717 496.894 496.256(0.527) Net Surplus (Deficit) – – (6.455)

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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.

Military Sea–lift capability. (Covered by charter until a Multi–Role vessel is procured under Project Protector)

Undertake Multi–Agency Operations/Tasks (MAO&T), and 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 roles.

Overview

The Naval Support Force (NSF) comprises one replenishment tanker, HMNZS ENDEAVOUR, whose primary role is to provide fuel to the RNZN frigates or other nations’ ships.

This year saw the ship repair the machinery plant Machinery Alarm System with a complete replacement of all the software and much hardware. The replacement was completed ahead of time and has resolved the Machinery Alarm System defect.

In addition to supporting the deployment of HMNZS TE MANA to the South Pacific for the Raoul Island re–supply and the Governor General’s state visit to the South Pacific Islands, ENDEAVOUR has provided support for two major combined exercises in Australian waters (Ex Ocean Protector and TASMANEX) and supported an RNZN task group to Western Australia.

With the final quarter of the reporting period spent in Auckland undergoing planned maintenance and crew training, the ship did not make up the sea days lost during the earlier part of the reporting period.

Until a multi–purpose ship has been purchased under Project Protector, the NZDF’s sea–lift requirements will continue to be met by charter.

Above: HMNZS ENDEAVOUR in company with HMNZS TE MANA departs for an exercise

Below: An HMNZS ENDEAVOUR crew member works to prepare for a Replenishment At Sea

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Performance



Quantity:

HMNZS ENDEAVOUR available for military tasks. The ship was unavailable for tasking during the early part of the period due to rectification of a defect with the ship’s engine Machinery Alarm System. However, early completion of the repair work allowed a successful period of sea trials in time for the ship to deploy to the South Pacific in November. The ship conducted support of HMNZS TE MANA for Raoul Island re–supply and the Governor General’s state visit to the South Pacific islands. In the first quarter of 2004 the ship was available to support RNZN and RAN vessels in Exercises Ocean Protector and TASMANEX.

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 achieved DLOC readiness in Feb 04 (assessed by MOET) and maintained its currency for the remainder of the period at sea.

Ship carries 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.

ENDEAVOUR was able to conduct a full scale DLOC Generation work–up in company with RNZN and RAN units. In addition, the ship participated in two combined exercises during the course of the first quarter of 2004.

To conduct DLOC Readiness training and Combat Viability exercises, HMNZS ENDEAVOUR will spend approximately 143 days at sea (target range 135–145).

Since the rectification of the Machinery Alarm System in Oct 03 the ship spent 86 days at sea of which 39 were in company or on exercise. The shortfall in sea days was due the requirement for these repairs.

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. Although DLOC was achieved during Feb 04, posting of some crewmembers reduced overall personnel collective training levels.


ENDEAVOUR suffered three major problems during the period. The replacement of the obsolete Machinery Alarm System was the most significant and was rectified during the period. In the latter part of the period, a higher than normal consumption of main engine lubrication oil required some engine repairs, and a blown turbo–charger further reduced outputs in June 2004. While these problems are not directly related, they are indicative of the limited life remaining in many of the ship’s systems.


Standardisation was achieved and verified by external agencies in exercises with RAN units. There are some areas of tactical communications interoperability with the RAN that require improvement.

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Deployability:

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

OLOC generation could not have been achieved during the middle of the period as ENDEAVOUR was not available during Machinery Alarm System replacement.

Munitions, expendable and technical stores available to generate OLOC, as specified in the Naval 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.

Sustainability:

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

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

Personnel available for sustainment of Naval logistic support tasks.

Few personnel are available for sustainment without impinging on other NZDF unit requirements.




Actual 2002/03




Actual 2003/04

($ million)

Expenditure7.942 Personnel 8.384 8.758 9.0149.106 Operating 8.265 8.011 8.0543.759 Depreciation 3.890 3.327 3.3626.622 Capital Charge 5.994 6.768 6.758

27.429 Total Expenses 26.533 26.864 27.188


0.197 Revenue Other 0.197 0.175 0.13927.974 Total Revenue 26.533 26.864 26.8280.545 Net Surplus (Deficit) – – (0.360)

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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 and the conduct of route surveys under Employment Contexts 1, 2, 3, 4 and 5.

Undertake Multi–Agency Operations/Tasks (MAO&T), and 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 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 Diving Support Vessel prepared to support MCM and diving operations. This output also includes contributions by the Diving Support Vessel to other government departments, including MAO&T, and the community.

Overview

The primary MCM task is to survey designated shipping routes, and to support the ‘conditioning’ of those routes by the ODT. High definition sidescan sonar is used to identify all mine–like objects that lie within pre–determined approaches to the main ports in NZ. This information is analysed and plotted on charts by the MCM support cell in Auckland and then held in a database. This would allow the Navy to efficiently clear the approaches should any mine threat develop in the future. During the next period the delivery of MCM route survey will migrate from the IPC to HMNZS RESOLUTION, and HMNZS MANAWANUI. This will allow the IPC to concentrate on Multi–Agency Operations and Tasking (MAO&T), in advance of new Inshore and Offshore Patrol Vessels being commissioned under Project Protector.

Above: HMNZS MANAWANUI in Auckland harbour

Below: Defence Divers Course recover an ASW Mortar practice round from the Firth Of Thames

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In Oct 03 an IPC, the ODT and Geospatial Information System (GIS) personnel from the MCM office in Auckland, supported the Police in their search for an aircraft and the bodies of its crew in the Kapiti Coast area. The ship located the aircraft using the side–scan sonar and the ODT recovered one body and the aircraft’s flight recorders.

The RNZN divers have a range of capabilities that allow them to perform a variety of tasks both land based and underwater. (During the period a Navy Diver has been deployed to Afghanistan to assist with the conduct of Explosives Ordnance Disposal – EOD). While their 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 using a Heliox gas mixture. Navy divers will also continue to contribute to the NZDF IEDD response.

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

During the period MANAWANUI has:

— deployed to South East Asia to participate in the FPDA exercise FLYING FISH,

— participated in SQUADEX (the IPC Multi–agency DLOC generation exercise),

— deployed to the South Pacific Islands, and

— participated in Exercise CROIX DE SUD (a multilateral French Armed Forces New Caledonia exercise).

Of particular note over the period, was the successful deployment of a military hydrography element in MANAWANUI that was able to support Exercise CROIX DE SUD, and assist Samoa with some hydrographic work.

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



Quantity:

Diving Support Vessel (HMNZS 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 although personnel numbers are improving slowly. ODT personnel levels are currently at 62% and only one of the two teams can be fully manned.

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


Reliability and supportability issues with respect to the IPC MCM system (MCAIS) computers are continuing to be encountered. It is intended to keep the containerised MCAIS system operating for deployment in MANAWANUI and a feasibility study is to be conducted for deployment in RESOLUTION. A MCM mission capable Remotely Operated Vehicle 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 in the process of replacement.

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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 slowly increasing.

IPC, Diving Support vessel and Operational Diving Team carry out a range of training activities in accordance with Navy METLs and the NZBR 99–RNZN Operational Sea Training Instructions.

Training activities were conducted in accordance with NZBR 99.

The IPC and MANAWANUI conducted a squadron exercise (SQUADEX) during the period. This exercise was covered by the MOET and verified the IPC readiness to conduct MAO&T.

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 approximately 142 days at sea (target range 135–145).

– Inshore Patrol Craft will spend a total of approximately 347 days at sea (target range of 338–350).

– HMNZS KAHU will spend approximately 75 days at sea.

– The Diving Team will spend approximately 7,600 hours (target range 7,200–7,800) hours on MCM training activities. These figures include 3,120 hours on Operation NIAGARA.

MANAWANUI spent 142 days at sea.

The IPC spent a total of 287 days at sea. The reduction is symptomatic of RNZNVR manning deficiencies.

HMNZS KAHU spent 89 days at sea.

The Diving Team conducted 8,342 hours of MCM training. The additional hours were due to an unscheduled MCM exercise (Exercise Mulgogger) with the RAN.

Combat Viability:

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

RNZNVR Units, MANAWANUI and the ODT met collective training standards. The ODT and RNZNVR personnel shortfalls have meant the pool of trained personnel available for operational tasking is lower than is desirable.


The majority of equipment meets the required standard. The exceptions are the MCM computer system and the lack of a VEMS / DEU (Virtual Exercise Mine System/ Diver Evaluation Unit). The SIVA 55 Clearance Diving Breathing Apparatus is at the end of its effective life and is in the process of replacement.


Standardisation with friendly forces continues. This was most recently tested during Exercise Mulgogger 04 in Australia (March 04) and Western Pacific Naval Symposium MCMEX / DIVEX in Singapore (Apr/May 2004).

Deployability:

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 was feasible.

Munitions, expendable and technical stores available to generate OLOC, as specified in the Naval Warrant of Armament Stores.

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

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Sustainability:

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

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

Personnel available for sustainment of crews and Diving Team.

The ODT is currently at 62% manning.

RNZNVR units continue to have problems providing sufficient personnel to man the IPCs and sustainment from within the VR divisions is not currently achievable.




Actual 2002/03




Actual 2003/04

($ million)


29.028 Total Expenses 31.233 30.574 30.553


0.227 Revenue Other 0.261 0.204 0.17129.630 Total Revenue 31.233 30.574 30.541

0.602 Net Surplus (Deficit) – – (0.012)

Cost by Output11.955 Output 4.1 12.847 13.441 13.4154.311 Output 4.2 5.065 4.333 4.440

12.762 Output 4.3 13.321 12.800 12.698

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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.

Overview

The Joint Geospatial Support Facility (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.

HMNZS RESOLUTION and Survey Motorboat (SMB) ADVENTURE are the main hydrographic data collectors for the RNZN. This data is processed onboard with some assistance provided by the 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.

The contracted 110 days1 have been undertaken in accordance with the LINZ MOU for RESOLUTION services. In addition, three local area surveys have been undertaken by SMB ADVENTURE during the year; two on behalf of LINZ (Coromandel and Lake Wakatipu2) with the other (Napier) conducted in cooperation with Port of Napier Limited.

1 The way the LINZ/NZDF contract expresses sea days has changed during the period. 110 days reflects the new agreed

regime.2 The first time the lake has been officially surveyed.

Above: HMNZS RESOLUTION in Auckland harbour

Below: Survey Motor Boat ADVENTURE in Oamaru harbour

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Performance

Output performance of the hydrographic area 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.


Quantity:

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

HMNZS RESOLUTION spent 111 days at sea on hydrographic tasks for LINZ. This meets the requirement of the Memorandum of Understanding (MOU) with LINZ.

The Hydrographic Business Unit available to support the collection and processing programmes.

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

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

Shortfalls in manning levels encountered last FY in the areas of Bridge Watch–keeping Officers for HMNZS RESOLUTION, and Leading Hydrographic Survey Technicians have been reduced but are still below funded levels. These shortfalls also effect the manning of SMB ADVENTURE and subsequently its availability.

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 144 days at sea (in the target range of 137–158) on hydrographic tasks for LINZ.

RESOLUTION spent 115 days at sea, including 1111 days on LINZ contracts. The total number of non–LINZ days spent at sea was reduced this FY due to a major four month planned maintenance period Oct 03–Jan 04.

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 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 for Senior Hydrographic Technician and Electronic Technician trades. The requirement to replace these personnel would have a direct impact on outputs from SMB ADVENTURE, important Naval Support functions, or possibly other Output Classes.

1 The way the LINZ/NZDF contract expresses sea days has changed during the period. 110 days reflects the new agreed regime.

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Actual 2002/03




Actual 2003/04

($ million)

Expenditure5.362 Personnel 3.535 2.937 3.300

(3.363) Operating (0.128) 1.129 1.3572.194 Depreciation 1.225 1.485 1.5832.800 Capital Charge 1.400 1.485 1.5536.993 Total Expenses 6.032 7.036 7.793

Revenue– Revenue Crown 0.317 0.230 0.230

6.994 Revenue Other 5.715 6.806 6.9746.994 Total Revenue 6.032 7.036 7.2040.001 Net Surplus (Deficit) – – (0.589)

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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 and 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, armour 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 an Armoured Personnel Carrier (APC) Squadron (Queen Alexandra’s Sqn, equipped with MII3 APCs). The Territorial Force provides additional capability for reinforcement and rotation of these Regular Force units.

The priority of effort for these units since the withdrawal of NZBATT6 from East Timor in November 2002 has seen the Infantry Battalions concentrate on the training and equipment refurbishment required to regenerate conventional combat capabilities. QA Sqn has the role of providing APC support for EC1 and maintaining armoured vehicle crew skills as part of the introduction into service of new vehicles.

The Land Combat Forces have commenced a significant transformation that will continue over the coming years as the Army modernises. The integration of the new Light Armoured Vehicles (NZLAV) into the Infantry Battalions has begun with the arrival of the first vehicles in August 2003. This modernisation will enhance the mobility, firepower and protection necessary for combat or peace support operations.

Above: NZLAV during training near Mount Ruapehu

Below: A NZ Army Heavy Machine–Gun Detachment engages a target

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Other projects in the Long Term Development Plan that relate to the Land Combat Force include the Light Operational Vehicle to replace the Landrover fleet, the Medium Range Anti–Armour Weapon, Direct Fire Support Weapon and the intelligence, surveillance and reconnaissance capability.

Performance



Quantity:

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 for tasks under ECs 1 and 2.

– Up to an Infantry Battalion Group 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.

Since the return of the Battalion Group from East Timor in Nov 02, the Army has not been able to regenerate this capability fully. An infantry battalion is only able to meet lower – end operational spectrum contingencies. Battalion Group responses for ECs 3 – 5 cannot 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 fully 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 NZDF HQ 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 85% 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 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 Battalion Group conventional field exercise was conducted in Oct 03 as part of Exercise Silver Fern that assessed the trained state of deployable force elements. In addition, a number of Brigade–level Command Post Exercises were conducted. However, additional equipment, personnel and training time would be needed to ensure units fully meet DLOC for larger formation activities.

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69




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 exercised during Exercise Silver Fern in Nov 03 and will be further exercised on Exercise Joint Kiwi 05. However, additional equipment, personnel and training time would be needed to ensure units fully meet DLOC for larger formation activities.


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 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 / CONPLANS.

Major ongoing equipment refurbishment and replacement requirements, resulting from the East Timor commitment, have limited the support available for OLOC generation. There remain shortages in a range of protective equipment, tentage, camouflage nets, radios and night vision equipment.

Sustainability:

Munitions, expendable and technical stores available, as specified in CONPLANS to maintain OLOC for 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.



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Actual 2002/03




Actual 2003/04

($ million)


201.342 Total Expenses 224.207 207.347 209.027



2.703 Net Surplus (Deficit) – – (1.817)

Cost by Output18.341 Output 7.1 19.478 16.702 18.233

183.001 Output 7.2 204.729 190.645 190.794

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71



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, and 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 Squadron1, 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.

1 The Output Plan for 2003/2004 notes 3 Signal Troop. However, under restructuring, the title of the unit has since been changed to 3 Signal Squadron.

Above: NZ Army Engineers work to repair a bridge in Basra, Iraq

Below: A NZ Army Light Gun Detachment on exercise

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

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).

Following the withdrawal of the Battalion Group from East Timor, the Combat Support Forces continue to conduct the training and equipment refurbishment activities required to regenerate conventional combat capabilities.

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



Quantity:

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 Tp, 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:




Army was partially prepared to provide the engineer elements and substantially prepared to provide 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 equipped with the equipment necessary to function effectively on the battlefield. 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 75% 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.

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73




Readiness:


– DLOC for units contributing to Company and Battalion Groups.


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.

Land Combat 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.

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, with the exception of a Battalion Group field exercise conducted in Oct 03.

Combat Viability:


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.


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:


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. 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.



Sustainability:

Munitions, expendable and technical stores available, as specified in CONPLANS, to maintain OLOC for 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 2002/03




Actual 2003/04

($ million)


132.568 Total Expenses 135.951 134.462 135.472


0.148 Revenue Other 0.568 0.283 0.179130.645 Total Revenue 135.951 134.462 134.358(1.923) Net Surplus (Deficit) – – (1.114)

Cost by Output44.327 Output 8.1 45.563 46.754 47.36060.982 Output 8.2 63.176 58.135 58.57527.259 Output 8.3 27.212 29.573 29.537

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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, and 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.

Above: 2 LFG Units deploy for an exercise

Below: A NZ Army Medic prepares to innoculate a patient

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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.

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). On the return of NZBATT 6, 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



Quantity:

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 Health Support Battalion, 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:




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 85% 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.

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Readiness:


– DLOC for units contributing to Company and Battalion Groups.


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. The Battalion Group exercise conducted in Oct 03 highlighted the current training gap for conventional operations.

Combat Viability:


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.


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

Deployability:


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


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.



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Actual 2002/03




Actual 2003/04

($ million)


107.572 Total Expenses 111.991 111.223 113.105


0.118 Revenue Other 0.455 0.253 0.157109.274 Total Revenue 111.991 111.223 111.127(1.702) Net Surplus (Deficit) – – (1.978)

Cost by Output22.974 Output 9.1 24.470 23.211 21.52317.573 Output 9.2 17.902 17.238 17.83527.092 Output 9.3 27.604 28.894 31.41628.675 Output 9.4 28.849 30.224 30.67311.288 Output 9.5 13.166 11.656 11.658

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79



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.

Above: A patrol member during night operations

Below: A Counter-Terrorist team during training

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The capability to neutralise chemical and biological devices has not yet been fully developed. This will be addressed during 2004/2005. There is provision in the Long Term Development Plan to rectify deficiencies in special operations mobility, communications and firepower.

Performance



Quantity:

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.

– 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) to undertake emergency national IEDD/CB Response tasks. Existing IEDD teams will be cross–trained in CB Response.

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

A CTG was available. This was exercised during Exercise Lawman 04.

This capability was maintained (with the CB limitations noted above) and was exercised during Exercise Lawman 04. However, skilled personnel and equipment shortages have affected this capability on occasion.

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 substantially met performance and reliability standards. There are specialist equipment shortfalls which are being addressed.


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.

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81




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.


Actual 2002/03




Actual 2003/04

($ million)


9.119 Operating 9.054 9.925 9.6243.724 Depreciation 3.603 3.667 3.5932.642 Capital Charge 2.711 3.632 3.623

32.758 Total Expenses 31.589 38.607 37.634


0.035 Revenue Other 0.132 0.088 0.05332.337 Total Revenue 31.589 38.607 38.572(0.421) Net Surplus (Deficit) – – 0.938


– Output 10.3 – – –

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 avionics system 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 February 2004, under the Defence Long Term Development Plan, the Ministry of Defence identified a preferred tenderer for the upgrade of the aircraft’s sensors, mission management system, communications and navigation systems. 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 all 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 surveillance of Vanuatu and Niue following cyclone damage. The MPF also completed the operational deployment to the Gulf of Oman in support of the Operation Enduring Freedom Maritime Interdiction Operation. During the nine month deployment the aircraft flew in excess of 1000 hours and successfully completed 97% of assigned tasks. The interim capabilities developed for the deploying aircraft allowed them to effectively integrate with coalition forces, although the relative complexity of the missions combined with the increasing requirement for interoperability reinforces the need for the systems upgrade planned for the aircraft.

Performance


Above: Maintenance Personnel work in the engine of a P–3K Orion deployed to the Gulf Region

Below: An RNZAF P–3K Orion Maritime Patrol Aircraft returns to base after a mission over the Arabian Gulf

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Quantity:

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, and the constitution of an additional crew occurred in July 2003.

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 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 maritime air operations tasks. The interim capabilities developed for the aircraft deploying to the Gulf of Oman allowed them to integrate with coalition forces and to effectively conduct surveillance operations in the low intensity and low threat environment. However, as with other nations, there remain some issues with C2 interoperability across the Coalition.

Readiness:

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

The MPF is fully prepared to conduct maritime surveillance in a low threat environment and is only partially prepared to conduct other 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. The preparation of aircraft for the mission to the Gulf of Oman demonstrated the RNZAF’s ability to generate and field limited capability enhancements within prescribed periods of notice if required.

Maritime Patrol Forces carry out a range of training activities in accordance with the NZDF MAS, RNZAF METLs and the RNZAF Exercise Programme.

Although some planned activities in early 2004 were cancelled the MPF was able to practice all Mission Essential Tasks in conjunction with a wide cross section of potential coalition partners. 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. These exercises helped crews to develop and maintain proficiency in Maritime Anti–Surface Warfare, and to prepare for the deployment to the Gulf of Oman in support of Operation Enduring Freedom.

To conduct DLOC Readiness training and Combat Viability exercises No 5 Squadron will fly a total of approximately 2,500 hours (target range 2,475–2,520 hours), including surveillance patrols.

No 5 Squadron flew a total of 2,911 hours, of which 1,717 hours directly contributed to the maintenance of DLOC. 659 hours were flown under D16 during operations in the Gulf of Oman, and 390 hours were flown on NZ EEZ surveillance patrols.

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 but is growing steadily under the supervision of senior tradesmen.

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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 unsuitable for many civil and military tasks. Limited equipment upgrades were undertaken to prepare aircraft for the deployment to the Gulf of Oman but the development of new capabilities has stopped in order to achieve a standard equipment configuration across the aircraft fleet.


Maritime Patrol Forces doctrine, training and operating procedures allow ready integration with friendly forces as demonstrated during international exercises. Equipment limitations reduce the level of interoperability achievable. Equipment upgrades to the aircraft participating in Operation Enduring Freedom successfully provided the minimum level of capability required for the low intensity operation, in the low threat environment.

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 generate OLOC within the designated response times of the more demanding employment contexts. The preparation of aircraft for the mission to the Gulf of Oman demonstrated the RNZAF’s ability to generate and field limited capability enhancements within prescribed periods of notice if required.

The aircraft and crew achieved OLOC for Operation Enduring Freedom tasks.

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 surveillance roles in a low threat environment, but has insufficient weapons, expendables and technical stores to generate OLOC for the more demanding employment contexts.

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. However, one aircraft was deployed for nine months without compromising the conduct of routine local tasking.



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Actual 2002/03




Actual 2003/04

($ million)


128.701 Total Expenses 127.929 143.674 142.290



2.275 Net Surplus (Deficit) – – 1.202

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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 the deployment of a Hercules aircraft to Kyrgyzstan in support of Operation Enduring Freedom, and operational support by both aircraft types to NZDF deployments in Afghanistan, Iraq, and 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 CHOGM and the Prime Minister’s visit to Dubai, Kabul, Bagram, and Basra.

The Air Force successfully completed the introduction of the two Boeing 757–200 aircraft into service. The new 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 July 2005 and will take eleven months to complete. The aircraft modifications are now unlikely to include the long–range fuel tanks.

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.

Above: A RNZAF Boeing 757 aircraft arrives in the Solomons to deliver personnel and freight

Below: A NZLAV is loaded onto a RNZAF C–130 Hercules aircraft at Ohakea

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The two Boeing 727s, which ceased operational flying in May 2003, made their final RNZAF flights in July and August 2004 respectively. One aircraft has been sold while the other was flown to RNZAF Woodbourne, where it will be used as a ground training aid for aircraft technicians.

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 2005/09 timeframe and will extend the aircraft’s life, improve reliability, and make the navigation and communications suite compatible with international standards.

Performance



Quantity:

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.

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.

Air and ground crews were maintained at the manning levels specified, although identification of suitable AE support staff is required.

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 July 2005 and will take eleven months to complete.

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 (with the exception of the modifications scheduled for 2005/06). The Hercules were substantially prepared for operations at the lower end of the threat spectrum across the range of ECs.

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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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 success of the contribution to Operation Enduring Freedom demonstrated the sound nature of the RNZAF’s training and its ability to work with diverse coalition partners.

The Boeings will fly a total of 1,100 hours (target range 1,050–1,150), and the Hercules will fly a total of 2,400 hours (target range 2,380–2,420).

The Boeing 757s flew a total of 1,252 hours. The Hercules flew a total of 2,668 hours. 989 hours flown by the Boeing 757s contributed directly to the maintenance of DLOC. 2,030 hours flown by the Hercules contributed towards the maintenance of DLOC.

Combat Viability:


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. The high operational tempo has, however, resulted in a shortfall in some DLOC training.

Participation in a number of Operations and Exercises, ranging from the short runways and tropical environment of Timor, 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.


The introduction of the Boeing 757 has overcome many of the shortfalls in performance and reliability suffered by the Boeing 727. Modifications, including cargo door, strengthened floor, and air stairs are required before the Boeing 757 is fully compliant. The modification program is scheduled to commence in the third quarter of 2005 and will take eleven months to complete.

The Hercules continues to face problems with reliability and other age–related factors. The limited availability of rotable spares has had an adverse effect on serviceability. In particular, the aircraft radar and the self– protection system are affected. The upgrade of avionics and structural components during the C–130 life–extension program will address these issues.


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. Capital acquisitions in the short and medium terms will address these 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.

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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 Boeing 757 support–base achieved OLOC levels in January 2004, although a number of logistics support procedures have yet to be finalised.

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.

Equipment limitations, such as the lack of night vision capability, are now affecting interoperability. Capital acquisitions in the short and medium terms will address these deficiencies.

Personnel 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 shortage of qualified maintenance personnel would have impacted upon the sustainment of deployed operations over an extended period.




Actual 2002/03




Actual 2003/04

($ million)


178.102 Total Expenses 180.722 196.731 194.049



0.620 Net Surplus (Deficit) – – 2.412


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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 Aero–medical Evacuation and Search and Rescue.

The Rotary Wing Transport Force deployed four aircraft to the Solomon Islands in July 2003, providing tactical air transport and aero–medical 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 planned in late 2004 and early 2005 will address 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 both the Iroquois and the Bell 47G Sioux training helicopter.

Above: No 3 Squadron UH–1H Iroquois Helicopters work alongside Australian Forces in the Solomon Islands

Below: No 3 Squadron Maintenance Personnel service a UH–1H Iroquois Helicopter during an exercise in Waiouru

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Performance



Quantity:

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 AE element for the support of land operations.

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 staffed in accordance with the Master Establishment. Maintenance crews were supplemented to provide additional servicing capability, and other RNZAF personnel provided the necessary administrative, logistics and operational support to deployed operations in the Solomon Islands. This was at the expense of other support function outputs within New Zealand.

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.

The lack of opportunity for the RWTF to consolidate on the regeneration program that followed the East Timor deployment has had a significant impact on its preparedness for conventional battlefield operations and higher threat environments. In spite of this the RWTF has conducted some exercise and continuation flying and remains substantially prepared for lower level contingencies as a result.

OLOC was maintained 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 operation in the Solomon Islands has demonstrated a high state of readiness for the conduct of operations in a low–threat tropical environment. The deployment has however affected training for conventional battlefield operations and higher threat environments. Exercises planned in late 2004 and early 2005 will address this deficiency.

No 3 Squadron will fly a total of approximately 4,660 Iroquois hours (target range 4,600–4,720).

No 3 Squadron flew a total of 4,745 hrs for the FY 03/04. 510 hours flown by the Iroquois directly contributed to the maintenance of DLOC.

Combat Viability:


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. The lack of opportunity to consolidate on the regeneration program that followed the return from East Timor has affected training for conventional battlefield operations and higher threat environments. Exercises planned in late 2004 and early 2005 will address this deficiency.

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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 has been effectively managed, although not without 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.

Deployability:

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 within designated response times for low–level contingencies and operations in low–threat environments. The lack of aircraft performance, night–vision capability, and aircraft self–protection means the RWTF could not generate OLOC with a full complement of aircraft 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 are being 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.

Squadron personnel were available to provide for the sustainment/rotation of the RWTF as specified in Schedule 4. The manning of the Air Security and Aviation Refueller trades would make the sustainment and rotation of a full complement of support personnel problematic.

Some aircraft maintenance was undertaken by contractor to compensate for the on-going deployment of maintenance personnel on operations.




Actual 2002/03




Actual 2003/04

($ million)

Expenditure29.971 Personnel 30.135 28.738 29.76424.441 Operating 24.087 23.345 23.222

8.794 Depreciation 4.967 7.851 7.7569.086 Capital Charge 8.620 10.169 10.252

72.292 Total Expenses 67.809 70.103 70.994

Revenue70.793 Revenue Crown 67.215 69.475 69.4750.647 Revenue Other 0.594 0.628 0.547

71.440 Total Revenue 67.809 70.103 70.0220.852 Net Surplus (Deficit) – – (0.972)

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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.

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.

Above: LSV Course members on their Graduation Parade

Below: Cadets from Air and Sea Cadet units practice their bushcraft skills

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Quantity:

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 achieved 18,833 training days which included formal training, technical advice, tertiary study, exchanges and participation in minor projects or exercises with defence and/or law and order forces of MAP participating countries. The decrease in the number of training days against last year is the result of a reduction in the number of formal training activities provided to the Solomon Islands and Vanuatu due to their internal security problems. The reduction in the number of offshore training activities is also due to the NZDF being unable to provide the planned number of Mutual Assistance Training Teams (MATTs) to conduct courses overseas due to its operational commitments.

Support for the New Zealand Cadet Forces (NZCF) involving the conduct of 52 courses for cadets and 15 courses for NZCF officers, during which it is anticipated that 1,829 cadets and 133 officers will receive training. This includes a projected total of 104 NZCF Units and approximately 3,850 NZCF officers and cadets. Permanent staff includes 27 training and support staff, and 4 civilian administrative staff.

Support has been achieved for 106 cadet units comprising 313 officers and 3,406 cadets with a total of 7,592 cadet training days delivered. This comprised 43 courses for cadets and 14 courses for NZCF officers. The average parade attendance during the year was 2,250.

Special 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 03 – 30 Jun 04).

Five LSV courses were held offering 720 places (144 per course). A total of 500 trainees commenced training and a total of 382 trainees completed training.

There has been a noticeable increase in disciplinary releases from courses run during the past year, reflecting a negative trend in the motivation and attitude of trainees, assessed as mainly due to current lower unemployment rates. The lower average age of trainees (with 17 year olds now accepted) has also changed the character of the course. Changes to the course content and disciplinary processes are being implemented. The LSV Company is confident that this problem can be resolved without affecting the benefit of the course for those graduating.

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.

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.

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 LSV scheme continues to be a useful component to the RMT Programmes sponsored by the Ministry. Work outcomes for LSV graduates compare very favourably with trainees from other RMT courses.

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Actual 2002/03




Actual 2003/04

($ million)


Revenue5.848 Revenue Crown 6.184 5.922 5.9221.446 Revenue Other 1.446 1.367 1.3497.294 Total Revenue 7.630 7.289 7.2710.720 Net Surplus (Deficit) – – 0.546

Cost by Output1.826 Output 15.1 2.180 2.060 1.8902.307 Output 15.2 2.502 2.630 2.3852.441 Output 15.3 2.948 2.599 2.450

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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 and the Ministry of Fisheries.

Over the last twelve months the major focus of effort for Headquarters Joint Forces New Zealand has been campaign planning, deployment and the rotation of Force Elements in support of Operation Enduring Freedom and operations in Iraq. Support to these operations has seen two deployments of ANZAC Class ships, a P–3K Orion aircraft, a C–130 Hercules aircraft, an Engineer Squadron, a Provincial Reconstruction Team and staff officers from all three Services to the Gulf Region and Afghanistan. Significant staff effort was also required to plan and conduct the deployment of Force Elements including a Rifle Company and No 3 Squadron RNZAF Detachment in support of the restoration of law and order under the Australian–led Regional Assistance Mission to the Solomon Islands.

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

Above: A Boarding Team from HMNZS TE MANA board a dhow in the Gulf Region to conduct a search

Below: Members of the New Zealand PRT during a ceremony at Bamyan, Afghanistan

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of capability achieved by individuals, detachments or units before departure is assessed by the designated Operational Commander.

Quantity:

Targets

Maintain the commitments specified by Government in its approval for each task/mission/operation.

Performance Achieved

At the start of the reporting period, 377 NZDF personnel were posted overseas on operations. By the end of the year this figure had increased to 506 personnel. The number of personnel deployed overseas peaked at 556 during the second 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 P–3K Orion and C–130 Hercules aircraft deployments to the Gulf region. During the third quarter the P–3K Orion and C–130 Hercules returned to NZ. An ANZAC Class Frigate deployed on operations to the Gulf region during Apr 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 2003–2004:

Region and Mission NZDF Commitment

Pacific

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. There are currently two UNMO deployed throughout Timor Leste conducting a variety of tasks including border liaison, facilitation of meetings, patrols, and visiting remote villages and sites.

Four NZDF personnel were assigned to HQ UNMISET staff positions and assist in co–ordination duties for the Peace Keeping Forces under the control of HQ UNMISET. The mission has since downsized to one staff officer. The NZ National Support Element (NZ NSE) of two NZDF personnel was withdrawn on 28 May 04. The NZ NSE facilitated the movement of all NZ personnel and equipment in and out of Timor Leste and provided the national link between the NZDF and HQ UNMISET.

The NZ Training Advisory Team, comprising ten NZDF personnel is based in Metinaro and Dili to assist the Office of Defence Force Development with the training of the Timor Leste Defence Force. The Team has since been downsized to a single specialist–training officer and four staff officers.

Peace Monitoring Group, Bougainville (PMG)

(Operation BELISI II)

The PMG was an Australian led deployment to monitor the cease–fire agreement between the warring Bougainville factions. NZ led a Truce Monitoring Group (TMG), which deployed to Bougainville in Nov 97. In Apr 98 the TMG was succeeded by the Australian led PMG of 195 personnel. In Jul 01 the PMG was down–sized to 75 personnel, and reduced from six to two operational bases, as a precursor to eventually exiting Bougainville and handing over to a civilian led organisation. This key event was marked by the cessation ceremonies that were conducted on 30 Jun 03.

19 NZDF personnel (including four dedicated Weapons Disposal personnel) filled a variety of operational, administrative and logistic appointments until the PMG was withdrawn on 20 Aug 03.

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Regional Assistance Mission Solomon Islands (RAMSI)

ADF led Combined Joint Task Force (CJTF) 635

(Operation RATA)

A total of 226 NZDF personnel deployed to the Solomon Islands (SI) in Jul 03 to provide NZDF augmentation and support to the ADF–led CJTF 635. The complete NZDF contingent consisted of a HQ / National Command Element, Engineer Section, and RNZAF elements to support four deployed UH–1H helicopters. An infantry company from 1 RNZIR also deployed in Aug 03. This commitment was reduced as part of a planned draw down during Nov 03. The current contingent of 88 NZDF personnel includes an Infantry Platoon and two UH–1H helicopters with maintenance and support personnel. The current contingent has been extended to 31 Jul 04.

Asia

Support to Multinational Operations against trans–national terrorism in Afghanistan

(Operation ARIKI)

Two NZDF personnel are currently deployed to the Coalition Joint Task Force Headquarters (HQ CJTF 180), in Bagram, Afghanistan.

Four NZDF personnel are deployed to the ISAF Headquarters in Kabul as Staff Officers in the support, works, plans and mine awareness areas.

Two NZDF personnel assisted in the training of the Afghan National Army as part of a British Army Training Team.

95 NZDF personnel deployed to the New Zealand Provincial Reconstruction Team (NZPRT) during Aug 03 to the province of Bamyan in Afghanistan.

Three NZDF staff officers are based at US CENTCOM in Florida to provide planning advice and assistance for Operation Enduring Freedom and operations in Iraq.

HMNZS TE MANA relieved HMNZS TE KAHA in the Middle East in Feb 03. HMNZS TE MANA conducted Maritime Interdiction Operations (MIO) contributing to the multinational effort against trans–national terrorism in the Middle East and returned to New Zealand in Aug 03. HMNZS TE MANA redeployed to the Arabian Gulf in Apr 04 for a four month period of MIO.

An NZDF P–3K Orion maritime patrol aircraft deployed to the Gulf of Oman in May 03 to conduct MIO in the Arabian Sea. This ceased in Feb 04 with the return of the aircraft to NZ. Nine NZDF personnel remain in the Arabian Gulf to support air operations for Operation Enduring Freedom.

A NZDF C–130 Hercules aircraft, support crew and an air loading team deployed to Kyrgyzstan on 23 Jun 03 as part of New Zealand’s contribution to the International Security Assistance Force in and around Afghanistan. This commitment concluded in Oct 03.

Cambodian Mine Action Centre (CMAC)

(Operation CAMBER)

In Dec 91 the NZDF committed two 10 man engineering training teams to Cambodia to train Cambodians in de–mining skills. This deployment was a precursor to the establishment of the CMAC Training Centre in 1993. NZ has provided two officers to the CMAC since 1996 in positions of Technical Advisor (Operations) to the CMAC at Kampong Chhnang, and Technical Advisor (Logistics) to HQ CMAC in Phnom Penh.

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NZ Contingent Korea (NZCK) Eleven personnel departed NZ in Mar 03 for a tour with the United Nations Command Honour Guard Company in Seoul returning to NZ late Aug 03. They worked alongside US, UK, Turkish and Korean Honour Guard Elements.

UN Command Military Armistice Commission in Korea (UNCMAC)

(Operation MONITOR)

In Jun 04 one staff officer deployed as an assistant operations officer within HQ UN Command Military Armistice Commission in Korea.

Middle East

NZDF support to the multinational reconstruction effort in Iraq

(Operation HAVEN)

The NZDF contributed de–mining specialists (advisers and trainers) under the United Nations Mine Action Service programme in Iraq. Two officers deployed in late May 03, one as an Operations Officer in Baghdad and the other as a Liaison Officer in Basra, the commitment concluding in Dec 03.

61 NZDF personnel are attached to a British Engineer Regiment based in Basra, Iraq. The Light Engineer Group deployed in Sep 03 and was relieved by a second contingent in Mar 04. The Group works alongside the Multinational Division South East conducting humanitarian aid tasks and reconstruction projects in Basra.

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 with a helicopter detachment and recently the NZDF has continued to provide a contingent of 27 personnel. The contingent provides expertise in Force 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 and Syria.

Europe

NATO Stabilisation Force, Bosnia (SFOR)

(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 maximum of seven staff officers to the Stabilisation Force in Bosnia. Six personnel are attached to the Multinational Brigade (Sector North–West) HQ in Banja Luka, Bosnia.

UN Mission In Kosovo (UNMIK)

(Operation KOSTER)

In Jun 99 the UN Security Council authorised the establishment of an interim civil administration in war–ravaged Kosovo. The NZDF commitment is one staff officer as a Military Liaison Officer with the UNMIK Headquarters in Pristina, Kosovo.

NATO Stabilisation Force, Bosnia (SFOR)

(Operation FORD II)

Ten NZDF personnel are attached to British Army units assigned to SFOR in Bosnia, during the European summer period. The current NZDF commitment is a Liaison and Observation Team.

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Africa

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 current NZDF commitment is two Technical Advisors to the Program based at the Mission HQ in Maputo.

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. UNMO strength will drop from 230 to 141 by Feb 05. The NZDF has committed two UNMOs who are based in Freetown and Kailahun.

Quality:

Letters of appreciation were received from Chiefs of Staff and Commanders–in–Chief regarding the NZDF contributions to various operations and missions around the world. Letters of appreciation were also received from other Government Departments for inter–departmental support provided by the NZDF to overseas missions.

The performance of the NZDF against the following targets was assessed by United Nations Department of Peace Keeping Operations.


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 2002/03




Actual 2003/04

($ million)


25.120 Operating 9.495 46.847 39.5370.106 Depreciation 0.195 0.557 0.4510.055 Capital Charge 0.177 0.283 0.283

28.336 Total Expenses 11.081 51.738 43.381

Revenue32.181 Revenue Crown 10.596 51.138 51.1380.977 Revenue Other 0.485 0.600 0.277

33.158 Total Revenue 11.081 51.738 51.4154.822 Net Surplus (Deficit) – – 8.034


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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 Achieved

Navy

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.

One 500 person Reserve The designated personnel from 2 and 3 Land Force Groups were available.

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.

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Availability Performance Achieved

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 (Hercules/Orion) was always available at 2 hours notice for tasking.

One Hercules at 14 hours DON for emergency flights

One Hercules aircraft was maintained on 14 hours notice for emergency flights.

One 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:

Above: NZDF personnel prepare sandbags to prevent local flooding in the Lower North Island

Below: NZDF and Police personnel worked together to rescue people trapped by flooding in the Lower North Island in Feb 04

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Agency Support Provided

NZ Police (excluding SAR)

The NZDF provided HMNZS KIWI, vehicles, aircraft and personnel in support of the NZ Police terrorist response exercise held during Mar 04 (Exercise LAWMAN) in the Christchurch area. RNZAF aircraft flew 52.4 hours during the exercise.

The NZ Army provided military support to the NZ Police including assistance with traffic control, road closures due to snow, vehicle checkpoints, traffic accidents, scene assistance (photographs and guards), and domestic disturbances on 75 occasions.

The NZ Army also provided Firearms and Medical training, and catering support for NZ Police during the period.

Naval Support Services in Devonport provided the National Clandestine Drug Lab Team with support and services for 8 days during Apr 04.

1 NZ SAS Group in conjunction with the NZ Police conducted pre–planned searches during Aug 03 involving 10 man–days.

RNZAF Base Auckland personnel assisted a NZ Police search for a police suspect.

NZDF personnel, in conjunction with the NZ Police, conducted an immediate search of a school following a bomb threat –no device was found.

RNZAF Iroquois helicopters flew 203.3 hrs in support of the New Zealand Police Special Tactics Group, Armed Offenders Squad and Drug Recovery Operations.

RNZAF No 40 Squadron C–130 Hercules and the Boeing 757 aircraft flew NZ Police equipment and personnel deployed to Honiara and the Solomon Islands, and repatriated Police Officers back to New Zealand during Aug 03, Oct to Dec 03 and Jan 04. A further 4 flights during May and Jun 04 carried freight and personnel to and from Honiara.

Land, Sea and Air SAR (in support of NZ Police, NRCC or other requesting agency)

HMNZS WAKAKURA conducted a search in the Kapiti Island area for a missing Convair aircraft over a period of five days during Oct 03. The RNZN Operational Dive Team conducted visual searches of all contacts made during the search.

The NZ Army provided personnel and logistic support to SAR. This included assistance to the NZ Police in locating a missing child in Waiouru as well as preparing vehicles, equipment and personnel for 3 major searches during Aug and Sep 03.

RNZAF Woodbourne SAR personnel assisted with locating an injured tramper and supported a caving rescue.

RNZAF P–3K Orion crews conducted 16 major SAR tasks in Port Chalmers and Cook Strait and as far afield as Norfolk Island and the Samoa and Tonga areas, flying a total of 147.6 hours.

RNZAF Iroquois helicopters conducted 7 SAR operations involving 94.9 flying hours. These included locating a missing aircraft in the vicinity of Kapiti Island, as well as searching for trampers, climbers and hunters. A further 68.3 hours were flown during SAR training exercises in the Nelson, Canterbury, Wellington and Whakatane areas.

RNZAF C–130 Hercules aircraft conducted 2 SAR tasks North East of East Cape and east of Norfolk Island during Dec 03 involving 18.6 flying hours.

The National Rescue Coordination Centre (NRCC) called out RNZAF Air Directing Officers on 57 occasions involving 58.9 man–days.

Ministry of Civil Defence and Emergency Management

The NZ Army assisted Police with the recovery of 200 stranded motorists in and around Waiouru and the Desert Road, providing meals and accommodation after heavy snowfalls closed all arterial routes in the Central North Island on 5 Jul 03.

NZ Army and RNZAF personnel supported declared Civil Defence emergencies (Operation Awhina) in the Lower North Island and Picton area during Feb 04. Support provided included searching for missing persons, rescue evacuation, sandbagging, water distribution, emergency service vehicle meals, transporting gravel for stop bank repairs, house content removal and clean up assistance. A total of 1,616 man–days were expended, 12,339kms travelled providing this logistical support. RNZAF Iroquois helicopters also flew 48.5 hours in support.

NZDF personnel also attended Civil Defence meetings in support of local councils in BOP, Ruapehu and Taupo.

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Department of Conservation (DOC)

HMNZS HINAU conducted surveillance and enforcement tasks in conjunction with Department of Conservation (DOC) and NZ Customs in the Poor Knights, Hen and Chicken Islands, East Coast, Northland and Auckland regions during Sep 03.

HMNZS WAKAKURA conducted surveillance and enforcement tasks in the Stephens/ Brothers Islands and Long Island during Apr 04. Similar tasks were also conducted in the Nelson/ Marlborough area in June 04.

HMNZS ENDEAVOUR conducted a resupply of stores and equipment to Raoul Island during Nov 03.

HMNZS CANTERBURY conducted a resupply of Raoul Island during Apr 04. This was supported by a P–3K airdrop of helo spare parts to enable HMNZS CANTERBURY to continue the resupply of Raoul Island.

An RNZAF P–3K Orion on a routine Maritime surveillance patrol conducted a mail drop at Raoul Island on 23 Dec 03 and again on 4 Mar 04.

RNZAF 3 Squadron Iroquois helicopters provided helicopter transport in support of hut maintenance within the Mount Cook region on 28 Jan 04. Additionally they also provided airlift assistance with the removal of car bodies and loose car parts at Whiteria Park, Titahi Bay on 31 Mar 04.

Army ATG assisted DOC with the annual cull of Kaimanawa horses where horses were culled from the ATG area.

Department of Corrections

The NZ Army provided facilities in Linton Camp for Prison Wardens to conduct riot control training.

National Rural Fire Authority

NZ Army Units at Burnham, Linton and RNZAF Base Auckland attended 233 callouts in support of the NZ Fire Service. Callouts attended included rural fire assistance during the extreme dry weather experienced in the South Island during Dec 03 and Jan 04, fire alarm activations, motor vehicle accidents, a range of domestic fires, medical assistance and hazardous substance spill clean–ups.

The RNZN and RNZAF provided venues and facilities for conferences on Crash and Terrorist Awareness.

The RNZAF 3 Squadron Iroquois helicopters flew 7.5 hrs in support of Rural Fire Fighter training in the Taranaki and Wellington regions.

Department of Internal Affairs

NZDF personnel provided ceremonial support for Waitangi Day activities, visits by foreign Heads of State and other dignitaries including visits to NZ by HRH The Princess Royal, HRH The Earl of Wessex, the President of the People’s Republic of China and the Singaporean Minister of Defence, as well as memorial and commemoration services which included at Parliament the presentation of posthumous NZ Operational Service Medals to families.

A Tri–Service contingent travelled with the Governor General, the Maori Queen and other Government representatives, to Tonga to celebrate the King of Tonga’s 80th birthday, during Jul 03. Ceremonial support included a parade and tattoo.

A Tri–Service contingent travelled with the Prime Minister to Korea for the 50th Anniversary Commemoration of the Korean War, during Jul 03.

16th Field Regt provided ceremonial support and a 21 Gun Salute for several Royal celebrations including HM The Queen’s Official Birthday, HM The Queen’s Actual Birthday, the anniversary of the coronation of HM The Queen, and HRH Prince Philip’s birthday.

ANZAC Day 2004 was celebrated by the NZDF with strong representation at major commemoration sites in NZ and overseas. This included parades, catafalque guards, door openers, flag orderlies and wreath–laying.

RNZAF Boeing 757 aircraft provided transport to commemorate the Battle of Monte Cassino. The personnel list included the NZ Prime Minister and her party of 11, 2 Historians, 11 Media, the NZDF ceremonial contingent, 3 cadets, 52 Veterans, 2 RSA reps, 2 Members of Parliament (Samuels and Gudgeon), 4 VANZ personnel and 4 essay winners.

Explosive Ordnance Disposal (EOD)

NZDF Explosive Ordnance Disposal (EOD) personnel attended 95 callouts between Jul 03 and Jun 04. Items dealt with included a call out to clear live ordnance found at Queen Elizabeth Park that had been buried by the 2nd US Marine Division during WWII. Other items included hand fragment grenades, practice and mortar bombs, trip flares, detonators, an Italian WWII Brixia mortar, aircraft practice bombs, a sonar buoy and various types of rifle rounds.

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Ministry of Fisheries, New Zealand Customs Service, Ministry of Foreign Affairs and Trade (MFAT)

HMNZS CANTERBURY and Ministry of Fisheries officers conducted Ministry of Fisheries protection and boarding patrols in the Chatham Rise area during Oct 03, and Apr 04. During May 04 HMNZS CANTERBURY conducted NZ Customs and Ministry of Fisheries surveillance and enforcements tasks around the NZ coastline.

HMNZ Ships MANAWANUI and KAHU, with Ministry of Fisheries and NZ Customs officers on board, conducted surveillance and enforcement tasks along the North East Coast of the North Island and the greater Hauraki Gulf regions during Oct 03. HMNZS MANAWANUI also conducted surveillance and enforcement tasks in the same area during Mar 04. HMNZS KAHU conducted further tasks in the Cook Strait, and East and West Coasts of the North Island during Apr/ May 04.

HMNZS WAKAKURA conducted surveillance and enforcement tasks in the Cook Strait and Marlborough Sounds during Jul 03.

HMNZ Ships HINAU, KIWI and WAKAKURA conducted further tasks in the Wellington, Auckland and Canterbury areas during Jan and Feb 04. HMNZS HINAU conducted further EEZ patrol tasks during Apr 04, and HMNZS MOA also conducted EEZ patrol tasks during May 04.

HMNZS HINAU conducted surveillance and enforcement tasks in conjunction with Department of Conservation (DOC) and NZ Customs in the Poor Knights, Hen and Chicken Islands, East Coast, Northland and Auckland regions during Sep 03.

HMNZS TE KAHA departed NZ in Sep 03 for a 4–month deployment to Australia returning to NZ in Dec 03. During the deployment TE KAHA conducted training and exercises with the Australian Defence Force. The vessel also supported Defence Diplomacy activities with port visits to Sydney (4), Adelaide, Fleet Base West, Fremantle (2) and Melbourne.

HMNZS TE MANA has conducted a number of operational port visits during her tasking with Operation Enduring Freedom (TG TIKI II), Apr – Jun 04.

HMNZ Ships ENDEAVOUR and TE MANA departed NZ for the South Pacific in Nov 03 in support of the Governor General of New Zealand’s Vice Regal visits. Both ships supported Defence Diplomacy activities through port visits to Niue, Apia, Tokelaus, Cook Islands, Rarotonga and Tonga before returning to NZ in Dec 03.

HMNZS MANAWANUI conducted a six–week South Pacific deployment between May and Jun 04, conducting port visits to Nuku’alofa, Apia, Port Vila and Noumea and assisting the Governments of Samoa, Tonga and Vanuatu with maritime tasks.

A construction team of 5 Engineers from NZ Army’s 2nd Land Force Group deployed to Kiribati to construct and repair NZ High Commission facilities over the period Jul – Aug 03.

RNZAF Maritime Patrol Force P–3K Orion aircraft conducted 51 surveillance patrols in the NZ EEZ and Antarctic areas. A total of 388.9 hours were flown. This activity was conducted on behalf of civilian agencies represented by the National Maritime Coordination Centre.

RNZAF P–3K Orion aircraft conducted 10 Exclusive Economic Zone (EEZ) surveillance patrols with a total of 308 flying hours flown in support of Pacific Island nations (Cook Islands, Niue, Tokelau, Tuvalu, Tonga, Samoa, Kiribati, Palau, Federated States of Micronesia, Marshall Islands, Solomon Islands, Vanuatu, and Papua New Guinea) and the Forum Fisheries Agency.

RNZAF Boeing 757 and C–130 Hercules aircraft transported charitable freight to the Solomon Islands, Rarotonga, New Caledonia, and cargo to the NZ High Commission in Canberra, NZ Embassy in Rome, NZ Embassy in Washington, and the NZ Embassy in Riyadh, Saudi Arabia, during the reporting period, totalling 426.8 flying hours.

RNZAF assistance was also provided to NZ Customs during the period, providing logistical support and services. Army ATG provided logistical support, services and training to Ministry of Fisheries during May 04.

Air terminal services were provided for a VIP aircraft operating in support of a visit of the Australian Minister of Foreign Affairs.

Air terminal, baggage party services and vehicles were provided in support of the visit of the President of Chile in May 04 comprising 20 man–hours and 250 km vehicle support.

The Minister of Defence for Papua New Guinea was conveyed from Wellington to Whenuapai, via Waiouru, using a Kingair aircraft, in May 04.

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Support to the NZ Antarctic Programme (NZAP)

A total of 88 NZDF personnel provided terminal and logistic support operations at Christchurch, McMurdo Station and Scott Base for varying periods during the summer season. Fourteen NZDF personnel deployed to Antarctica in Oct 03. Twenty additional personnel deployed during Jan 04 to conduct ship off–load operations and environmental maintenance tasks. All these NZDF personnel returned to NZ by 19 Feb 04.

The RNZAF conducted fifteen C–130 Hercules flights to Antarctica in support of the NZ scientific projects, which included an Air Supply Parachute drop into Cape Hallet over the period 16 Nov to 19 Dec 03. A total of 236.8 hours were flown.

Government House The NZDF provided Boeing 757 transport, involving 12.9 flying hours, and personnel for ceremonial support to the Governor General of NZ and VIP party attending the King of Tonga’s 80th birthday celebration over the period 2 – 6 Jul 03.

The NZDF provided Boeing 757 transport involving 23.1 flying hours for a MFAT Pacific Trade Tour which included Minister Goff and 44 other delegates/media over the period 1 – 9 Jun 04.

RNZAF Boeing 757 transport returned the Governor General of NZ from Rarotonga to New Zealand in Nov 03. A total of 7.7 hours were flown.

NZDF personnel provided ceremonial support to the Governor General, including band performances (Waitangi Day Garden Party and the Government House Open Day), Credential Ceremonies, and VIP air transport within NZ. A total of 11.4 hours were flown.

The Governor General of NZ was conveyed from Wellington to Dunedin, using a Kingair aircraft, in Jun 04. A total of 3.6 flying hours were flown.

Disaster Relief (South Pacific)

RNZAF C–130 aircraft flew eight missions during Jan 04 to Niue for disaster relief operations (Cyclone Heta). Tasks carried out included the transportation of a medical team and relief supplies to the island, and ferrying 26 civilians and tourists off the island some of whom received medical treatment in New Zealand. A total of 42.3 hours were flown.

RNZAF P–3K Orion aircraft flew to Vanuatu in Feb 04 to conduct Cyclone Ivy disaster reconnaissance. Passengers carried included the Vanuatu Minister of Foreign Affairs and Internal Affairs, as well as representatives from the National Disaster Office. 12.6 hours were flown in support of this activity.

Department of Prime Minister and Cabinet (DPM&C)

RNZAF Boeing 757 aircraft transported the Prime Minister, NZDF personnel and Korean War Veterans to Korea, for the 50th anniversary war commemorations during Jul 03.

RNZAF C–130 Hercules aircraft transported the Prime Minister and VIP party to Honiara, Solomon Islands for a visit. They also visited NZ personnel around the Middle East during Sep, Oct and Nov 03, flying a total of 183 hours.

RNZAF Boeing 757 aircraft transported the Prime Minister and Heads of State of South Pacific Nations to and from Nigeria for the CHOGM 2003 over the period 2 – 10 Dec 03, flying a total of 48.9 hours.

VIP air transport for the Prime Minister and Cabinet Ministers within NZ included 74.2 flying hours for fixed wing aircraft and 17 hours for helicopters.

RNZAF Boeing 757 aircraft provided transport to commemorate the Battle of Monte Cassino, utilising 52 flying hours.

The Minister of Defence was conveyed on a return trip between Wellington and Whenuapai, and the Prime Minister from Whenuapai to Wellington, in Apr 04.

The Hon Ms Dyson was conveyed on a return trip between Wellington and Christchurch, in May 04.

General Medical Assistance/Support

A RNZAF Boeing 757 transported charitable medical supplies to the Solomon Islands during Nov 03. A total of 17 hours were flown during this activity.

Army Training Group Hospital staff in Waiouru provided medical support to the local community and St John Ambulance involving 475 emergency treatments.

HQ 3 Land Force Group personnel provided assistance to the NZ Fire Service and St John Ambulance attending 7 call–outs over the period Jul – Dec 03.

3rd Auckland North Battalion personnel provided medical assistance to athletes during the Taupo Ironman Triathlon in Mar 04.

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General Community Support

The Navy, Army and Air Force provided a wide range of support to communities throughout New Zealand. This included support to ANZAC memorial events, the Battle of Britain Commemoration, and the RSA (including the transportation of RSA Christmas welfare parcels by Boeing 757 aircraft to personnel in Afghanistan). Other activities included the Lord of the Rings, Return of the King, movie launch as well as supporting schools, sports clubs, major sport fixtures, charities, veterans groups, and youth organisations. Other activities included ceremonial, band performances, air shows, national appeals (such as Poppy Day), logistics support and training.

General Training Courses NZ Army Units and RNZAF Base Ohakea and Auckland conducted pre–deployment training, security, weapon safety training, basic leadership, various team building, workplace, open life skills and Youth Life Skills training courses.

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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 this framework 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 of case management 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 1964

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 coordination 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 2003/2004 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.

Veteran’s Affairs New Zealand is constantly seeking to improve the quality of the advice it provides. During this financial year, the Director identified the need for more frequent briefing meetings with the Minister. These are now taking place and the Director is able to ensure that the Minister is briefed on significant issues in a timely manner.

The Veterans’ Administrations Senior International Forum was successfully hosted by New Zealand in Wellington from 21 February to 27 February 2004. The Forum involved representatives from the Commonwealth Department of Veterans’ Affairs Australia, Veterans’ Affairs Canada, the Veterans Affairs Secretariat in the United Kingdom and the Department of Veterans Affairs in the United States of America.

The theme of the Forum was “Into the Future – developing a veterans’ administration that is flexible enough to meet the changing needs of the veteran population”. The Forum commenced with each country providing an overview of its structure and responsibilities, providing a context for the discussion that followed. The topics covered during the Forum were commemorations, business innovation, transition issues and research. A presentation was also made to the Forum by Associate Professor Dr Judith Davey, of the University of Victoria, Wellington, on New Zealand’s approaches to positive ageing and ageing in place. Each country also gave a presentation on its strategies for addressing the needs of a changing veteran population.

The Forum provided a number of opportunities to share information and current practices, and has created opportunities for ongoing collaboration in a number of areas.

Eligible veterans and their dependants have access to the appropriate services in recognition of their Service.

The policy surrounding the application of the War Pensions Act 1954 is constantly being reviewed to ensure that it accurately reflects the intent of the legislation. The Veteran’s Pension policy manual has been redeveloped and is currently in the process of final review. Staff from War Pension Services who administer the Veteran’s Pension will be trained using the new manual.

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Discussions were held with the RNZRSA in September 2003 over nominations for RNZRSA claims panellists. Criteria were agreed and the RNZRSA asked to nominate two candidates for each panel. The RNZRSA have not been able to provide the Secretary for War Pensions with a list of nominations for the claims panels. In order to ensure that the war pensions claims process can continue, the Secretary for War Pensions has extended the term of the current RNZRSA nominated claims panellists for a further 6 months.

An extensive amount of work has been undertaken to gain background information on the impact of deployments post 1974, as part of the consideration of war pension coverage and entitlement for interment in Services Cemeteries. A briefing paper has been prepared for the Minister of Veterans’ Affairs.

Veterans’ Affairs New Zealand has worked with the New Zealand Defence Force in order to ensure that New Zealand Defence Force personnel have war pensions cover in place at the time of deployment. In the 2003/04 year war pension coverage was put in place for the New Zealand Defence Force personnel deployed to Iraq and the Solomon Islands.

In consultation with Veterans’ Affairs New Zealand, the Ministry of Social Development has made changes to the pamphlet providing information on War Disablement Pensions and Veteran’s Pension.

All of the form letters sent to veterans by War Pension Services are currently under review by the Secretary for War Pensions, in consultation with the Ministry of Social Development.

Veterans’ Affairs New Zealand is currently in a process of negotiation with the Ministry of Social Development over the content and style of the Veteran’s Pension application form.

Veterans’ Affairs New Zealand has launched its website. The website provides comprehensive information on the range of services available to veterans.

In order to ensure that health and social work professionals are aware that veterans’ have additional entitlements, Veterans’ Affairs New Zealand is commencing a programme of sending information out to Primary Health Organisations, Social Work agencies and other community organisations to ensure that they are aware of the services that are available to veterans.

In consultation with the Ministry of Health, Veterans’ Affairs New Zealand is providing information on the health care options that are available to the veteran community.

In order to establish effective liaison points within the Maori veteran community, the Director of Veterans’ Affairs New Zealand has attended a number of hui held by the 28th Maori Battalion Association. As a result of this interaction she has been able to identify and support individuals who are able to work with Maori veterans to ensure that they are able to access the support they require.

Work has been undertaken to improve the quality of decision–making around the awarding of War Disablement Pensions, Veteran’s Pensions and associated allowances and concessions. 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. A change has been made to the Burial and Cremations Act 1964 to transfer responsibility for approving eligible service for burial in a Services Cemetery from the Minister of Internal Affairs to the Minister of Veterans’ Affairs. A revised information package has been distributed to all funeral Directors and RSAs.

A land management database has been developed to support the process of planning for and monitoring the maintenance and development of Services Cemeteries.

Veterans’ Affairs New Zealand is working with War Pension Services, 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 Secretary for War Pensions has instituted new administrative procedures to improve the management of war pension files and improve the turn around time for war pensions claims.

Regular communication and exchange of information has been established with the Ministry of Social Development Forecasting and Modelling Unit to improve the analysis of the expenditure trends in the War Disablement Pensions and Veterans’ Pensions.

Case management has been a fully functioning service for two years. A review of the processes and procedures used by the case management service is currently underway. This review will ensure that the processes and procedures that are in place, serve to facilitate veterans’ ability to access services and do not add additional layers of bureaucracy.

In order to establish effective working relationships with a variety of veterans’ groups and organisations, the Director, Veterans’ Affairs/Secretary for War Pensions has attended a number of regional meetings of veterans’ organisations and given presentations on the services available to veterans and their families.

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Planning has been undertaken to identify possible ways of implementing a series of health and lifestyle information seminars. More work needs to be undertaken before these seminars can be introduced.

Veterans’ Affairs New Zealand operational policy and procedures are constantly under review to ensure that service delivery is effectively supported. Veterans’ Affairs New Zealand has taken responsibility for a number of payment processes and other administrative procedures to ensure that it can respond to the needs of its client group by providing more effective mechanisms for managing the relationship with its service providers.

The community will be aware of the role veterans played and continue to play in developing New Zealand as a nation.

Veterans’ Affairs New Zealand is responsible for coordinating government participation in key commemorations. In the 2003/04–year, commemorations were held in Korea, Gallipoli, Monte Cassino and Normandy. Veterans’ Affairs New Zealand was involved in the development of the programme of events in consultation with other agencies and countries and the management of New Zealand’s participation in the events at the commemorations.

The coordination of New Zealand’s involvement in these commemorations also involved the organisation of, and provision of support for, the 30 veterans who travelled with the official party to the commemoration of the 50th Anniversary of the signing of the armistice of the Korean War, the 52 veterans who travelled with the official party to the commemoration of the 60th Anniversary of the Battle of Monte Cassino and the 11 veterans who travelled with the official party to the commemoration of the 60th Anniversary of the D–Day landings. Funding was also provided to assist veterans’ groups to hold reunions, to veterans undertaking battlefield revisits and to 160 veterans who returned to Italy to attend the 60th Anniversary of the Battle of Monte Cassino.

As a result of the information gained from the coordination of the commemorations held in Korea, Gallipoli, Monte Cassino and Normandy, Veterans’ Affairs New Zealand has been able to develop a model for costing a range of commemorative activities. This will improve the quality of the planning process associated with commemorations.

Veterans’ Affairs New Zealand developed background material and questions for the Prime Minister’s essay competition for the Korean and Monte Cassino commemorations. This material was distributed to all secondary schools.

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 with some schools in rural communities to promote participation in caring for Services Cemeteries and resources have been provided to community groups undertaking projects associated with Services Cemeteries.

Above: Veteran Rei Rautahi wonders around the Sangro War Cemetery

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Veterans’ Affairs New Zealand Statement of Objectives and Service Performance

Output Class D1: Policy, Administration and Assessment

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 coordination of New Zealand’s participation in the commemoration of significant military anniversaries.

Performance


Quantity:

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 15 – 20

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 7

– Special Briefing Papers 46

Provide Ministerial servicing and support

– The anticipated range of written submissions includes the following:

– Ministerial Correspondence 200 – 300

– Parliamentary Questions 60 – 100

– Select Committee Reports 2 – 5

– Draft replies to Ministerial Correspondence 316

– Draft replies to Parliamentary Questions 21

– Select Committee Reports 4

Provide 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 two occasions during the year.

The War Pensions Appeal Board met on eight occasions during the year.

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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 177 maintenance agreements will be administered.

– An estimated 50 (in the range of 40 –80) contracts for service will be administered.

169 maintenance agreements were administered.

144 contracts for service 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 177 Services Cemeteries in New Zealand on a rotational basis over a three–year period.

There were 136 quality audits of Services Cemeteries carried out as part of the three–year cycle.

Coordinate 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 coordination.

There was participation in four commemorative activities during the financial year. These were for ANZAC Day at Gallipoli, the 50th Anniversary of the signing of the armistice of the Korean War, the 60th Anniversary of the Battle of Monte Cassino and the 60th Anniversary of the D–Day landings.

Quality

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.

– 95% of all responses will be completed within requested time frames, 20 working days if not otherwise specified.

– 95% of all responses will be 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.

The Minister accepted 100% of first drafts of all policy papers. 86% of all responses were completed within requested timeframes. 98% of all responses were accepted without amendment.

The numbers of requests for draft replies to ministerial correspondence exceeded what was anticipated due to a number of high profile issues such as the health of Vietnam veterans and the commemoration of the Battle of Monte Cassino. The fact that an increased amount of correspondence coincided with the need to divert resources to assist with another unplanned activity associated with commemorative events, meant that the response time was not met.

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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.

The decisions of the War Pensions Appeal Board were notified to claimants within the agreed timeframe, where a decision had been made.

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 them to make payments on Rehabilitation Loans.

Contracts for the maintenance and development of Services 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 were no breaches of contract by either Veterans’ Affairs New Zealand or contractors.

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 coordination will be to the satisfaction of the key stakeholders.

The coordination of commemorative events was to the satisfaction of the key stakeholders.

Costs for Output Class D1 (GST Exclusive)

Actual 2002/03




Actual 2003/04

($ million)

Expenditure0.981 Personnel 0.455 0.446 0.3951.426 Operating 0.984 0.993 1.0532.407 Total Expenses 1.439 1.439 1.448

Revenue2.809 Revenue Crown 1.439 1.439 1.4390.430 Revenue Other – 0 03.239 Total Revenue 1.439 1.439 1.4390.832 Net Surplus (Deficit) – – (0.009)

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N

5

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N



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


Quantity:

Assess and review entitlements to War Disablement Pensions and Veterans’ Pensions.

– An estimated 4000 (in the range 3500–4500) 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 30 decisions will be reviewed by the War Pensions Appeal Board.

– An estimated 200 (in the range of 150 – 250) reviews will be undertaken by the Secretary for War Pensions.

– An estimated 30 decisions on eligibility for Veterans’ Pension will be made by the Secretary for War Pensions.

The War Pensions Claims Panels considered applications for 12,689 disabilities. Of those disabilities 11,128 decisions involved the consideration of new disabilities and 1,561 decisions involved the consideration 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 201 reviews of the decisions made by the War Pensions Claims Panels on those applications, at the request of the veteran concerned.

The War Pensions Appeal Board considered 47 individual War Disablement Pension cases at the request of the veteran concerned. The Board upheld 9 of the decisions made by the National Review Officer, overturned 19 decisions made by the National Review Officer and 2 decisions made by the Secretary for War Pensions, and adjourned 17 cases awaiting further information.

The Secretary for War Pensions undertook 305 reviews at the request of the veteran concerned.

The Secretary for War Pensions undertook 75 reviews of eligibility for Veterans’ Pensions at the request of the veteran concerned. The higher than anticipated number of reviews of eligibility for Veterans’ Pension is a result of the introduction of the abatement regime.

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.

2088 orders for memorial plaques and headstones were completed.

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Provide Case Management.

– Case Management will broker appropriate services and supports connecting veterans and their families to services and supports within the community.

– Arrange counselling service for veterans’ families.

– Arrange additional health services for children of Vietnam and Operation Grapple veterans.

1556 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.

The service provided support for the veteran and the veteran’s family from within the veteran’s own community.

99 veterans’ families were provided with counselling.

44 children of Vietnam and Operation Grapple veterans were provided with additional services.

Quality:

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.

84% 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 fact that the position of National Review Officer was vacant for 2 months.

6% of Appeals were heard by the War Pensions Appeal Board within 3 months of receipt. Performance in this area is below the quality specification due to the fact that it is difficult to get the current Board members to agree to dates for sittings. The Minister has sought a review of this situation and a strategy is in place to improve the turn around time.

84% of reviews of Veterans’ Pension were completed by the Secretary for War Pensions within 1 month of receipt. This is due to the fact that there were 150% more reviews than anticipated. A number of these reviews were complicated as they involved issues relating to assessment of income associated with the new abatement regime.

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 2088 orders completed, 12 required replacement at Veterans’ Affairs New Zealand expense. This is an accuracy rate of 99%.

When correct documentation was supplied, 77% 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 services provided will be to the satisfaction of the veteran and, or their family.

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 timely manner.

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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 2002/03




Actual 2003/04

($ million)

Expenditure– Personnel 0.643 0.643 0.782– Operating 1.053 1.088 0.920– Total Expenses 1.696 1.731 1.702

Revenue– Revenue Crown 0.370 1.326 1.326– Revenue Other 1.326 0.405 0.403– Total Revenue 1.696 1.731 1.729– Net Surplus (Deficit) – – 0.027

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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


Quantity:

Develop and maintain Services Cemeteries.

– All 177 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.

169 Services Cemeteries have a maintenance agreement specifying the maintenance standards in place. Negotiations are under way with the Cemetery Authorities that have responsibility for the remaining 8 Services Cemeteries where there is no agreement in place.

Capital works were managed in accordance with the agreed programme. Of the 144 contracts for service that were agreed to as part of the capital works programme, 137 were completed. The remaining 7 contracts were withdrawn as Cemetery Authorities completed the required work at their cost.

Quality:

90% 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.

99% 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 2002/03




Actual 2003/04

($ million)0.234 Total Expenses 0.804 0.804 0.807

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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


Quantity:

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.

202 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.

Quality:

95% 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 2002/03




Actual 2003/04

($ million)– Total Expenses 0.581 0.581 0.221

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SECTION 6Financial Statements

Statement Of Accounting Policies for the Year Ended 30 June 2004

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. The financial statements cover all the activities of the NZDF as set out in the 2003/2004 Departmental Forecast Report 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 (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.

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 2002 as determined by Dunlop Stewart Limited, 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 Dunlop Stewart, as at 30 June 2003. 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 2003.

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. 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 – 30 years

Plant and Equipment 5 – 30 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.

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Statement of Financial Performance for the Year Ended 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000) Note

Actual ($000)

Main Estimates

($000)

Supplementary Estimates

($000)

Revenue (See Note 1)1,418,556 Crown 2 1,517,503 1,432,856 1,517,503

8,578 Departmental 3 8,706 8,430 8,5378,134 Other 4 6,502 8,421 8,456

76 Interest 5 216 200 212– Profit on sale of assets 25,483 – –

1,435,344 Total Revenue 1,558,410 1,449,907 1,534,708

Expenditure522,157 Personnel costs 6 557,480 535,156 548,673434,204 Operating costs 7 457,011 432,809 468,249211,171 Depreciation 8 229,392 219,815 228,567261,770 Capital charge 9 289,007 261,927 289,007

1,429,302 Total Output Expenses 1,532,890 1,449,707 1,534,49623,414 Other expenses 10 72,000 – –

1,452,716 Total Expenses 1,604,890 1,449,707 1,534,496(17,372) Net Operating Surplus/(Deficit) (46,480) 200 212

The accompanying accounting policies and notes form part of these Financial Statements

Statement of Movements in Taxpayers’ Funds for the Year Ended 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000) Note

Actual ($000)

Main Estimates

($000)


($000)3,079,648 Taxpayers’ Funds brought

forward as at 1 July3,294,814 3,081,493 3,294,814

(17,372) Net operating surplus/(deficit) (46,480) 200 212241,771 Increase/(decrease) in

revaluation reserves11 8,008 – 10,545

224,399 Total recognised revenues and expenses for the year

(38,472) 200 10,757

1,844 Capital contribution 291,307 285,405 291,307(11,077) Provision for repayment of

surplus to the Crown19 (25,520) (200) (212)

3,294,814 Taxpayers’ Funds as at 30 June 3,522,129 3,366,898 3,596,666


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Statement of Financial Position as at 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000) Note

Actual ($000)

Main Estimates

($000)


($000)

Taxpayers’ Funds2,814,256 General funds 11 3,030,339 3,119,311 3,110,253

480,558 Revaluation reserve 11 491,790 247,587 486,4133,294,814 Total Taxpayers’ Funds 3,522,129 3,366,898 3,596,666

Represented by:

Current Assets235,451 Cash at banks 268,967 63,958 186,739

14,123 Debtors and receivables 12 20,132 8,694 18,251– Debtor–Crown 17,921 – 15,930

151,111 Prepayments to the Ministry of Defence

13 216,387 348,494 261,799

32,820 Prepayments other 25,226 19,444 26,220202,277 Inventories 14 208,649 219,239 225,14230,306 Property, Plant and Equipment

Identified for Disposal15 31,775 – –

666,088 Total Current Assets 789,057 659,829 734,081

Non – Current Assets2,985,518 Property, Plant and Equipment 16 2,936,614 2,991,219 3,077,182

279 Property, Plant and Equipment Identified for Disposal

15 66,997 – –

2,985,797 Total Non – Current Assets 3,003,611 2,991,219 3,077,1823,651,885 Total Assets 3,792,668 3,651,048 3,811,263

Current Liabilities120,016 Creditors and payables 17 141,403 89,172 111,70121,782 Provisions 18 9,876 18,934 9,28911,077 Provision for repayment of

surplus to the Crown19 25,520 200 212

15,756 Provision for employee entitlements

20 17,465 18,000 15,000

102,417 Deferred Payment 21 1,967 – –271,048 Total Current Liabilities 196,231 126,306 136,202

Non – Current Liabilities24,921 Deferred Payment 21 14,709 103,630 19,89561,102 Provision for employee

entitlements20 59,599 54,214 58,500

357,071 Total Liabilities 270,539 284,150 214,597

3,294,814 Net Assets 3,522,129 3,366,898 3,596,666


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Statement of Cash Flows for the Year Ended 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)

Main Estimates

($000)


($000)

Cash Flows – Operating ActivitiesCash provided from:

Supply of Outputs to:1,418,556 – Crown 1,499,582 1,432,856 1,501,573

8,574 – Departments 8,601 7,690 7,826(639) – Others 8,370 11,146 5,068

76 Interest 216 200 2121,426,567 1,516,769 1,451,892 1,514,679

Cash disbursed to:

Produce outputs945,962 – Personnel and operating 991,155 966,610 1,029,126261,770 – Capital charge 289,007 261,927 289,007(3,717) Net GST (received)/paid (3,589) 6,181 3,592

1,204,015 1,276,573 1,234,718 1,321,725222,552 Net cash flows from Operating

activities240,196 217,174 192,954

Cash Flows – Investing ActivitiesCash provided from:

14,938 Sale of property, plant and equipment 32,464 1,105 12,440Cash disbursed to:

124,874 Ministry of Defence prepayments 462,297 523,730 462,29863,714 Purchase of property, plant and

equipment57,077 102,108 72,038

(173,650) Net cash flows from Investing activities

(486,910) (624,733) (521,896)

Cash Flows – Financing ActivitiesCash provided from:

1,844 Capital contributions 291,307 285,405 291,307Cash disbursed to:

1,673 Repayment of surplus 11,077 200 11,077171 Net cash flows from Financing

activities280,230 258,205 280,230

49,073 Net increase/(decrease) in cash held 33,516 (122,354) (48,712)186,378 Add opening cash balance 235,451 186,312 234,451235,451 Closing cash balance 268,967 63,958 186,739


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Reconciliation of Net Surplus/(Deficit) to Net Cash Flow from Operating Activities for the Year Ended 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)

Main Estimates

($000)


($000)(17,372) Net Operating Surplus/(Deficit) (46,480) 200 212

Add/(less) non – cash items211,171 Depreciation 229,392 219,815 228,567(1,589) Increase/(decrease) in the provision

for stock obsolescence(1,867) 9,079 (1,013)

226 Increase/(decrease) in provision for doubtful debts

(155) (69) (29)

(2,055) Increase/(decrease) in non–current employee entitlements

(1,503) (3,386) (2,602)

23,414 Write off debit balance in Revaluation Reserve

– – –

– Write down of property, plant and equipment

72,000 – (4,855)

231,167 Total Non – Cash Items 297,867 225,439 220,068

Working Capital Movements(4,289) (Inc)/Dec in inventories 10,497 (18,668) (21,852)(8,777) (Inc)/Dec in debtors and receivables (16,158) 1,985 (20,029)(3,196) (Inc)/Dec in prepayments other 7,594 (844) 6,60023,318 Inc/(Dec) in creditors and payables 18,967 9,062 21,204

3,717 Inc/(Dec) in GST Payable 3,589 – –– Inc/(Dec) in provisions (11,906) (12,493)

(3,014) Inc/(Dec) in current employee entitlements

1,709 – (756)

7,759 Net Working Capital Movements 14,292 (8,465) (27,326)

Add/(less) Investing Activity items998 Loss/(Gain) on disposal/retirement of

property, plant and equipment(25,483) – –

998 Total Investing Activity items (25,483) – –222,552 Operating Activities Net Cash Flows 240,196 217,174 192,954


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Statement of Commitments as at 30 June 2004

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

Capital Commitments504,381 Not later than one year 237,210191,163 One to two years 71,19235,054 Two to five years 19,803

– Over five years –730,598 328,205

Non – Cancellable Accommodation Leases9,658 Not later than one year 9,6747,040 One to two years 6,2066,723 Two to five years 2,2141,093 Over five years 881

24,514 18,975

Commitments Arising from Other Contracts168,325 Not later than one year 99,876

17,461 One to two years 21,04022,430 Two to five years 11,526

1 Over five years –208,217 132,442963,329 Total commitments 479,622

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 2004

30 Jun 03 30 Jun 04Actual ($000) Contingent Liabilities

Actual ($000)

1,496 Potential claims arising from disputes 2,048

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 03 30 Jun 04Actual ($000) Contingent Assets

Actual ($000)

1,058 Claims for costs resulting from legal proceedings –– Claim for damage to Boeing 757 caused by 3rd party 911

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.

A claim for personal injury has been made relating to an alleged injury at an NZDF warehouse, but no information has been provided as to the basis of the claim or the compensation sought.

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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 2004

01 Jul 03 30 Jun 04Opening Balance

($000)Reimbursements from MSD

($000)Distributions on behalf of MSD

($000)Closing Balance

($000)– 12,078 12,078 –

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 2004 are not included in the NZDF’s financial statements.


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Statement of Unappropriated Expenditure for the Year Ended 30 June 2004

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04Unappropriated

Expenditure ($000) Output Class

Actual ($000)

Appropriation ($000)

Unappropriated Expenditure

($000)

Vote Defence Force8,998 1 Military Policy Development 9,916 10,182 –

520,970 2 Naval Combat Forces 564,743 559,006 5,73730,926 3 Naval Support Forces 30,542 30,222 32032,732 4 Mine Countermeasures, Diving

and Diving Support Forces34,371 34,396 –

4,649 5 Naval Control of Shipping Forces

– – –

7,867 6 Hydrographic Data Collection and Processing

8,694 8,266 428

226,848 7 Land Combat Forces 234,928 233,265 1,663148,899 8 Land Combat Support Forces 152,267 151,770 497121,231 9 Land Combat Service Support

Forces126,996 125,626 1,370

36,800 10 Specialised Forces 42,456 43,433 –144,504 12 Maritime Patrol Forces 160,227 160,783 –200,287 13 Fixed Wing Transport Forces 218,607 220,522 –

81,222 14 Rotary Wing Transport Forces 79,747 78,866 8817,486 15 Miscellaneous Support 7,634 8,200 –

32,481 16 Operationally Deployed Forces 49,808 58,205 –Vote Veterans’ Affairs–Defence

2,812 1 Policy & Administration 1,628 1,619 9– 2 Services to Veterans 1,918 1,947 –

Other Expenses– Other Expenses 72,000 – 72,000

Unappropriated Expenditure is due to:

D2: Due to a provision for impairment associated with a Seasprite being damaged.

D3: Due to costs associated with the renegotiation of the dockyard management contract, and higher than forecast repair costs to HMNZS ENDEAVOUR.

D6: Due to costs associated with the renegotiation of the dockyard management contract and allocation of overheads.

D7 – D9: Due to higher than forecast Regular Force leave accruals due to high operational tempo and the impact of pay increases on the leave provisions.

D14: Due to higher than forecast Regular Force leave accruals due to high operational tempo and the impact of pay increases on the leave provisions.

Other Expenses: Due to an adjustment made to the balance of the MoD prepayment to allow for the impact of exchange rates applying as at 30 June 2004, in particular the strong NZ dollar compared to the US dollar.

Veterans Affairs

O1: Due to minor variations in input costs.

Approval of this unappropriated expenditure has been sought from the Minister of Finance in terms of Section 12 of the Public Finance Act 1989.


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Statement of Departmental Expenditure and Appropriations for the Year Ended 30 June 2004

(All figures are GST inclusive)

Main Estimates

Appropriation ($000)


Change ($000)

Section 5 Changes

($000)

Total Appropriation

($000)

Audited Actual

Outturn ($000)

Vote Defence Force1 Military Policy Development,

Coordination & Advice9,166 716 300 10,182 9,916

2 Naval Combat Forces 535,181 23,825 – 559,006 564,7433 Naval Support Forces 29,850 372 – 30,222 30,5424 Mine Countermeasures,

Diving and Diving Support Forces

35,137 (741) – 34,396 34,371

6 Hydrographic Data Collection and Processing for LINZ and Third Parties

6,786 1,130 350 8,266 8,694

7 Land Combat Forces 252,233 (18,968) – 233,265 234,9288 Land Combat Support

Forces152,945 (1,675) 500 151,770 152,267

9 Land Combat Service Support Forces

125,990 (864) 500 125,626 126,996

10 Specialised Forces 35,538 7,895 – 43,433 42,45612 Maritime Patrol Forces 143,920 17,713 (850) 160,783 160,22713 Fixed Wing Transport Forces 203,312 18,010 (800) 220,522 218,60714 Rotary Wing Transport

Forces76,285 2,581 – 78,866 79,747

15 Miscellaneous Support Activities

8,584 (384) – 8,200 7,634

16 Operationally Deployed Forces

12,466 45,739 – 58,205 49,808

Total Vote Defence Force 1,627,393 95,349 – 1,722,742 1,720,936

Vote Veterans’ Affairs – Defence1 Policy & Administration 1,619 – – 1,619 1,6282 Services to Veterans 1,908 39 1,947 1,918

Total Vote Veterans’ Affairs – Defence

3,527 39 3,566 3,546

Total Output Appropriations 1,630,920 95,388 – 1,726,308 1,724,482Total Appropriations 1,630,920 95,388 – 1,726,308 1,724,482


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135



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 2004.


Statement of Non–Departmental Expenditure and Appropriations for the Year Ended 30 June 2004

(All figures are GST inclusive where applicable)

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04

Actual ($000) Description

Main Estimates ($000)


($000) Actual ($000)

Vote Veterans’ Affairs – Defence

Appropriations for non– departmental output classes234 Development & Maintenance of

Service Cemeteries804 – 807

– Support for Veterans and Their Families

581 221

Appropriations for Other Expenses to be incurred by the Crown– Ex Gratia Payment for POWs/

Surviving Spouses 337 – 90

– Loan to the Rannerdale Trust – 225 2251,238 Donation to the Rannerdale Trust – – –1,472 Total 1,722 225 1,343

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.

On 23 April 2001 Cabinet agreed to provide for an ex gratia payment of $30,000 to each, of up to 150 surviving ex–POWS and civilian internees, or their surviving spouses, who were held prisoner by the Japanese during World War II. In April 2002 a decision was made by Ministers of Veterans’ Affairs and Finance to extend the end date for applying for the payment to April 2003 in order to ensure that eligible people who had not made application for the payment were able to do so. $0.337 million (GST Inc) has been transferred to 2003/04. [Joint Ministers Agreement dated 26 Feb ({2003 February Baseline Update (FBU) for Vote: Veterans’ Affairs–Defence refers})].

On 10 May 2004 Cabinet agreed to offer a loan of $0.225 million (GST not applicable) to the Rannerdale Trust on the condition that the loan would be repaid when there are no longer any World War II veterans resident in the Rannerdale Veterans’ Home, or in the event that the Home is sold. [CAB Min (04) 15/7].


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Schedule of Non–Departmental Assets for the Year Ended 30 June 2004


30 Jun 03 30 Jun 04Actual ($000) Description

Actual ($000)

Vote Veterans’ Affairs – DefenceAppropriations for non– departmental output classes

1,976 Crown Bank Account 868– Loan to Rannerdale Trust 225

1,976 Total 1,093


Schedule of Non–Departmental Liabilities for the Year Ended 30 June 2004


30 Jun 03 30 Jun 04Actual ($000) Description

Actual ($000)

Vote Veterans’ Affairs – DefenceAppropriations for non– departmental output classes

– Creditors and Payables 323– Total 323

There are no non–departmental commitments, contingent assets or contingent liabilities at 30 June 2004.


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Notes to the Financial Statements for the Year Ended 30 June 2004

Note 1: Budget Composition – NZDF & VANZ

Main Estimates ($000)

Supplementary Estimates Changes

($000)


($000)

RevenueCrown 1,432,856 84,647 1,517,503Departmental 8,430 107 8,537Other 8,421 35 8,456Interest 200 12 212

Total Revenue 1,449,907 84,801 1,534,708

ExpenditurePersonnel 535,156 13,517 548,673Operating 432,809 35,440 468,249Depreciation 219,815 8,752 228,567Capital charge 261,927 27,080 289,007

Total Output Expenses 1,449,707 84,789 1,534,496Other expenses – – –

Total Expenses 1,449,707 84,789 1,534,496Net operating surplus/(deficit) 200 12 212

The main contributors to the Supplementary Estimates changes were: $000The net increase comprises of:

Vote Defence ForceRevenue Crown Funding to provide for the capital charge and depreciation effects

of the 30 June 2003 asset revaluation.42,974

Funding to provide for the cost of operations in Afghanistan; Arabian Sea region; Iraq and the Solomon Islands.

41,673

84,647

Vote Defence Force Revenue Department State Services Commission (SSC) sourced revenue estimated

as required to provide for the 2003/04 costs of a State Sector Superannuation scheme.

107

Vote Veterans’ Affairs – DefenceRevenue Other Recovery of additional costs associated with the manufacturing

costs of plaques for ex–service memorials.35

142Personnel Expenses Reductions planned as a consequence of the Air Combat Force

disbandment were reflected in the Main Estimates values. However, an increased operating tempo associated with ongoing commitments to operational deployments required a continuation of Air Force manning at 2002/03 levels. The costs of enhanced remuneration for members of the Specialised Forces further contributed to the overall increase.

–

Operating Expenses The increase reflects costs of an increased operating tempo that largely is associated with the cost of operations in Afghanistan; Arabian Sea region; Iraq and the Solomon Islands.

–

Depreciation The increase largely reflects the impact of a revaluation of NZDF Specialist Military Equipment (SME) and Building assets on 30 June 2003.

–

Capital Charge Expenses The increase reflects the impact of a revaluation of NZDF Specialist Military Equipment (SME) and Building assets on 30 June 2003.

–

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Variations from Budget

The actual result for the year was a deficit of $46.480 million, compared with a budgeted surplus of $0.212 million. This results from two main factors (figures exclude GST):

— An over–spend arising from the write down of $72.000 million of MoD Prepayments (see note 10). This is non–cash, technical adjustment, and is largely due to the exchange rates applying in the calculation as at 30 June 2004, in particular the strong NZ dollar compared to the US dollar.

— Profit on sale of assets of $25.483 million.

Note 2: Crown RevenueThis is revenue earned for the supply of outputs to the Crown.

Note 3: Departmental Revenue

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)6,730 Land Information New Zealand 6,841 6,6771,333 Department of Work and Income 1,350 1,367

515 Ministry of Defence 515 493– Ministry of Foreign Affairs and Trade – –– New Zealand Police – –

8,578 Total Departmental Revenue 8,706 8,537

Note 4: Other Revenue

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)621 Use of RNZAF aircraft 675 697

2,720 Third party cost recoveries 2,620 2,769975 UN peacekeeping 271 600430 Contributions from Veterans for plaques 403 405

3,388 Miscellaneous 2,533 3,9858,134 Total Other Revenue 6,502 8,456

Note 5: Interest RevenueInterest is earned on funds in various overseas bank accounts.

Note 6: Personnel Costs

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)520,277 Salaries and wages 549,251 545,474

1,880 Retirement and accumulated leave 8,229 3,199522,157 Total Personnel Costs 557,480 548,673

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Note 7: Operating Costs

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)160,324 Materials 164,615 169,453

43,214 Premises costs 45,543 19,58371,293 Repairs and maintenance 67,117 67,50745,356 Training and travel 47,823 53,50730,613 Operating lease rentals 34,403 34,076

998 Loss on disposal/retirement of property, plant and equipment

– –

3,554 Consultancy 3,968 2,592322 Audit fees: Audit NZ 322 322

71 Non–audit fees: Audit NZ 54 8173 Increase/decrease in provision for doubtful debts (9) (18)135 Bad debts written off 15 1

1,932 Net foreign exchange (gain)/loss (377) (7)27 Fees to auditors other than Audit NZ for other

services provided21 18

2,608 Impairment costs 10,000 –73,584 Other operating costs 83,516 121,207

434,204 Total Operating Costs 457,011 468,249

Note 8: Depreciation

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)27,358 Buildings 32,926 32,270

168,208 Specialist Military Equipment 179,593 179,3287,502 Plant and Equipment 7,940 8,1114,486 Office and Computer Equipment 5,488 5,5703,617 Motor Vehicles 3,445 3,288

211,171 Total Depreciation Costs 229,392 228,567

Note 9: Capital ChargeThe 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 2004 was 8.5%.

Note 10: Other Expenses

30 Jun 03 30 Jun 04 30 Jun 04

Actual ($000)

Actual ($000)


($000)23,414 Write off debit balance in Revaluation Reserve

arising from revaluation of SME (note 11)– –

– Technical adjustment to write down the carrying value of MoD prepayments, primarily to allow for changes in foreign exchange rates.

72,000 –

– Total Other Expenses 72,000 –

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Note 11: Taxpayers’ FundsTaxpayers funds comprises two components:

General Funds

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

2,832,061 Balance brought forward 2,814,256(17,372) Net Operating Surplus/(Deficit) (46,480)

8,800 Gains/(Losses) on revaluation realised and transferred from Revaluation Reserve for assets disposed of

(3,224)

1,844 Capital Contribution 291,3072,825,333 3,055,859

(11,077) Provision for repayment of Surplus to the Crown (25,520)2,814,256 Balance Carried Forward 3,030,339

Revaluation Reserve

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04 30 Jun 04

Total ($000)

Land & Buildings

($000)

Library Collection

($000)

Specialist Military

Equipment ($000)

Total ($000)

247,587 Balance brought forward 479,578 980 – 480,558218,357 Revaluation movement 3,697 (980) 5,291 8,008(8,800) (Gains)/Losses on revaluation realised

and transferred to General Funds for assets disposed of

(1,582) – 4,806 3,224

23,414 Debit balance expensed (note 10) – – – –480,558 Balance Carried Forward 481,693 – 10,097 491,790

Note 12: Debtors and Receivables

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

270 Trade debtors: departments 37514,315 Trade debtors: non departments 20,064

(462) Less: provision for doubtful debts (307)14,123 Total Debtors and Receivables 20,132

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Note 13: Prepayments to Ministry of DefenceIn 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 2004 the reported prepayment of $216.387million (2003 $151.111million) remains uncapitalised.

Note 14: Inventory

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

339,310 Inventory 343,815(137,033) Less: provision for obsolete stock (135,166)202,277 Total Inventory 208,649

Note 15: Property, Plant and Equipment Identified for DisposalIncluded in Property, Plant and Equipment Identified for Disposal are property and Air Combat Force assets that have been identified as surplus.

The Air Combat Force (ACF) (Output Class D11) was disbanded during the 2001/02 year. Assets associated with the ACF and identified as for disposal were written down in the 2000/01 financial year against the Specialist Military Equipment revaluation reserve.

The disposal of the ACF assets is currently under negotiation. Separate negotiations are taking place for the 2 aircraft fleets, one for 17 Skyhawk and one for 17 Aermacchi aircraft. Costs of the disposal, including maintaining the aircraft in a saleable condition have been capitalised and are recorded as a receivable. Any sale proceeds will be recognised when a sale contract is in place. Any sale proceeds, less costs of disposal, will be transferred to the Crown.

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

Current Assets3,498 Air Combat Force –

26,925 Land & Buildings Intended for Sale 34,061(117) Accumulated depreciation (2,286)

30,306 Total Current Assets 31,775

Non – Current Assets279 Land & Buildings Intended for Sale 70,747

– Accumulated depreciation (3,750)279 Total Non – Current Assets 66,997

30,585 Total Assets Intended for Disposal 98,772

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Note 16: Property, Plant and Equipment

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

Land & Buildings509 At cost 10,465

1,105,281 At valuation 900,718(124,733) Accumulated depreciation (29,697)

981,057 Land & Buildings – net carrying value 881,486

Specialist Military Equipment1,062,072 At cost 1,231,0281,559,897 At valuation 1,105,530(755,577) Accumulated depreciation (482,456)1,866,392 Specialist Military Equipment – net carrying value 1,854,102

Plant & Equipment201,181 At cost 206,721

(118,528) Accumulated depreciation (126,106)82,653 Plant & Equipment – net carrying value 80,615

Office & Computer Equipment40,444 At cost 46,282

(25,860) Accumulated depreciation (31,168)14,584 Office & Computer Equipment – net carrying value 15,114

Library Collection980 At valuation –980 Library Collection – net carrying value –

Capital Work in Progress4,971 Buildings 4,207

24,801 Specialist Military Equipment 90,0193,062 Plant & Equipment 2,3077,018 Office & Computer Equipment 8,764

39,852 Capital Work in Progress– net carrying value 105,297

Total Property, Plant and Equipment4,010,216 At cost and valuation 3,606,041

(1,024,698) Accumulated depreciation (669,427)2,985,518 Total Net Carrying Value of Property, Plant and Equipment 2,936,614

Land & Buildings – Building Lives and Infrastructure

NZDF has reviewed the values and useful lives of its building assets to ensure they are appropriate. There is ongoing development of the information held relating to NZDF’s Land and Building assets, with an Integrated Land and Facilities Management System (ILFMS) being developed. This system will provide additional information useful to valuing as well as managing these assets. Infrastructure assets included within Land and Buildings such as roading, runways, sewerage and water reticulation systems have been identified as a particular area of priority.

For the 30 June 2003 revaluation revised standard lives were adopted for most building assets. Infrastructure assets, due to their diversity, have a wider range of useful lives and the 30 June revaluation for these assets was based on an indexation of existing values, together with a review to ensure the useful lives were appropriate.

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Note 17: Creditors and Payables

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

44,647 Trade creditors 28,40945,433 Accrued expenses 75,30313,617 Salaries and payroll liabilities 16,0491,580 Other short term liabilities 3,314

105,277 Total trade creditors and accruals 123,07514,739 GST payable 18,328

120,016 Total Creditors and Payables 141,403

Note 18: Provisions

30 Jun 03 30 Jun 04 30 Jun 04 30 Jun 04 30 Jun 04

Total ($000)

Environmental ($000)

Contract Restructuring

($000)Other

($000)Total

($000)20,377 Opening balance 9,449 12,250 83 21,7822,650 Additional provisions made

during the year600 – – 600

(1,245) Charged against provision for the year

(256) (12,250) – (12,506)

21,782 Closing balance 9,793 – 83 9,876

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 03 30 Jun 04Actual ($000)

Actual ($000)

(17,372) Net operating (deficit)/surplus (46,480)23,414 Less: other expenses 72,0006,042 Net surplus from delivery of outputs 25,5205,035 Gains on revaluation realised –

11,077 A. Total provision for repayment of surplus 25,52076 B. Interest received 216

11,077 Surplus Repayable – the higher of A or B above 25,520

Note 20: Provision for Employee Entitlements

30 Jun 03 30 Jun 04Actual ($000)

Actual ($000)

Current Portion3,036 Retirement, incentive and long service leave 2,079

12,720 Accrued and annual leave 15,38615,756 Total current portion 17,465

Non – Current Portion49,269 Retirement, incentive and long service leave 48,29811,833 Accrued leave 11,30161,102 Total non – current portion 59,59976,858 Total Provision for Employee Entitlements 77,064

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Note 21: Deferred PaymentThis 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 03 30 Jun 04Actual ($000)

Actual ($000)

102,417 Current Portion 1,96724,921 Non – Current Portion 14,709

127,338 Total Deferred Payment 16,676

Note 22: Financial Instruments

Credit Risk

Credit 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 WestpacTrust Bank of $3.337 million (2003, $0.433 million).

Fair Value

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 $0.528 million (2003, deficit of $4.750 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 Risk

Currency 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 $60.842 million (2003, $70.737 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 InformationThe 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 Zealand

Veterans’ Affairs New Zealand (VANZ) is a “semi–autonomous body” within the NZDF. 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

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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.

The Crown

The NZDF raises invoices in the name of the Crown on the United Nations (UN), for the reimbursement of the NZDF’s contribution in East Timor. The Treasury records the receivable(s) on the Crown Statement of Financial Position.

Ministry of Social Development

The 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 Defence

During the year the NZDF paid the Ministry of Defence $462.298 million (2003 $124.875 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 (2003 nil). $16.676 million (2003 $127.338 million) was owing to the Ministry of Defence as at 30 June 2004 (see Note 21). During the year the NZDF recovered Administrative and Project costs from the Ministry of Defence totalling $4.945 million (2003 $5.868 million). The amount outstanding as at 30 June 2004 was $0.077 million (2003 $0.003 million). NZDF reimbursed Ministry of Defence $5.154 million (2003 $2.508 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 Funds

A 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 $29.4 million.

— Annual revenue of $2.4 million

— Annual expenditure of $1.6 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 Museums

The 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 $9.4 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 $1.3 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.

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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 major camps and bases.

OtherThe NZDF undertakes a number of trading activities with other Government Departments, Crown agencies and state–owned enterprises on an arm’s length basis. These activities are not considered to be related party transactions.

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 2003 1,912,798

Deployments in Support of the Effort To Combat TerrorismP–3K Orion aircraft deployment CAB Min (03) 34/9 13 Oct 03 1,435Training Assistance to Afghan National Army CAB Min (03) 25/2 28 Jul 03 226Provincial Reconstruction Team in Afghanistan CAB Min (03) 23/3 7 Jul 03 16,298C–130 Hercules aircraft to Operation Enduring Freedom

CAB Min (03) 18/4 26 May 03 3,898

Light Engineering Group to Iraq CAB Min (03) 30/4 8 Sep 03 5,044De–Mining in Iraq Ministers with Power To Act 1

Apr 03109

Extend Afghanistan International Security Assistance Force

CAB Min (03) 40/2 8 Dec 03 190

Operation Enduring Freedom Package CAB Min (04) 8/5 23 Feb 04 5,285 32,485

Solomon Islands DeploymentSolomon Islands Assistance Force CAB Min (03) 25/7 21 Jul 03 5,646Solomon Islands Assistance Force CAB Min (03) 28/2 25 Aug 03 2,086Solomon Islands Extension Ministers with Power To Act 1

Oct 036,665

14,397

Other ChangesFinancial Effects of Asset Revaluation Joint Ministers 26 Sep 03 44,135Capital Charge Impact of Asset sale March Baseline Update (MBU)

29 Mar 04217

State Sector Superannuation Estimate March Baseline Update (MBU) 29 Mar 04

120

Recover Capital Charge expense CAB Min (04) 13/3(22) 26 Apr 04 3,995 48,467

Capital Contributions (GST not applicable)Provincial Reconstruction Team (PRT) CAB Min (03) 23/3 7 Jul 03 867Asset Sale Proceeds 2002/2003 CAB Min (03) 40/2 8 Dec 03 5,035

5,902

101,251Total Supplementary Estimates of Appropriations 2,014,049

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Note 25: Employee RemunerationThe 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.

2003/04 2002/03

Remuneration band Number of employees Number of employees$290,001 – $300,000 1 –$280,001 – $290,000 1 –

$260,001 – $270,000 – 1

$220,001 – $230,000 2 –$210,001 – $220,000 – –$200,001 – $210,000 1 3$190,001 – $200,000 1 –$180,001 – $190,000 7 3$170,001 – $180,000 1 2$160,001 – $170,000 2 –$150,001 – $160,000 4 3$140,001 – $150,000 6 7$130,001 – $140,000 15 10$120,001 – $130,000 24 18$110,001 – $120,000 48 24$100,001 – $110,000 89 62

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CDF/CFO Statement of Responsibility

In terms of Sections 35 and 37 of the Public Finance Act 1989, I am responsible, as Chief Executive of the New Zealand Defence Force, for the preparation of the Department’ financial statements and the judgements made in the process of producing those statements.

I have responsibility of establishing and maintaining, and 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 operation of the Department for the year ended 30 June 2004.

B. R. Ferguson Air Marshal Chief of Defence Force

06 August 2004

M. Horner Corporate Financial Officer

06 August 2004

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Audit Report

To the Readers of the New Zealand Defence Force’s Financial Statements for the Year Ended 30 June 2004

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 2004.

Unqualified opinion

In our opinion the financial statements of the New Zealand Defence Force on pages 47 to 107 and pages 113 to 147:

— comply with generally accepted accounting practice in New Zealand; and

— fairly reflect:

— the New Zealand Defence Force’s financial position as at 30 June 2004;

— the results of its operations and cash flows for the year ended on that date;

— 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 2004.

The audit was completed on 6 August 2004, and is the date at which our opinion is expressed.

The basis of the 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 our 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 the opinion.

Our 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 the 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 2004. 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, and trust monies, managed by the New Zealand Defence Force on behalf of the Crown for the year ended 30 June 2004. 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 section 38(1) of 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 assignments in the areas of tendering, project management and we also provided a resource to assist the Directorate of Risk and Assurance in a project management assignment. These assignments are compatible with the 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 2004 included on 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 web site. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.

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 6 August 2004 to confirm the information included in the audited financial statements presented on this web site.

Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

new zealand defence force annual report 2004 · new zealand defence force te ope kaatua o aotearoa...

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