NZDF chief plots spending cutbacks

The head of the NZ Defence Force says the organisation cannot "simply keep taking on more and more". Photo: Sam Sachdeva.

The head of the NZ Defence Force has signalled plans to cut back on spending and “reprioritise” resources in the coming years, which National fears could be a sign of further cuts to come.

However, Defence Minister Ron Mark says the message from NZDF chief Lieutenant General Tim Keating to staff is merely part of “routine” budget changes.

In a senior leader message seen by Newsroom, Keating said the NZDF senior leadership team had recently “[taken] decisions to ensure that we are prepared to adequately resource the priorities” as part of its Strategy 2025 plan (an acceleration of the Future35 plan for an integrated Defence Force by 2035).

“We’ve got to be smart with our resources in order to deliver today and over the next four years. We’ve got to prioritise carefully, and not simply keep taking on more and more.”

Keating said the NZDF leadership team had agreed to “reprioritise resources [in 2018/19] to best enable us to deliver on our strategy and our commitments to Government”.

Among the possible changes were focusing efforts on high-value initiatives; making “a deliberate reallocation” across operating budgets; reducing spending on contractors, other professional fees and travel to curb growth; reducing growth in personnel costs; and “moderating demand” for new strategic initiatives in its four-year plan.

“Such discussions are never easy, but we know the Defence Force we want to be, and the Defence Force New Zealand needs to be secure.”

“It feels to me that this is the first of what’s probably going to be more conversations and emails flying about around cost-cutting."

As part of its coalition agreement with Labour, New Zealand First secured a commitment to reexamine the defence procurement programme "within the context of the 2016 Defence Capability Plan budget" of $20 billion.

However, National’s defence spokesman Mark Mitchell - a former Defence Minister - said he was concerned Keating's email was a harbinger of cuts to come as the Government tightened its belt.

“It feels to me that this is the first of what’s probably going to be more conversations and emails flying about around cost-cutting...

“Labour has already stated publicly during the election campaign that defence was one area they were looking at cutting to be able to fund some of the promises and policies they were making a commitment to deliver.”

In March last year, then-Labour leader Andrew Little said the $20b to be spent on the defence upgrade could be better spent on housing and education, while Victoria University's Robert Ayson has suggested military spending may be near the bottom of the list for Finance Minister Grant Robertson.

While New Zealand First had secured a coalition commitment around the quantum of defence funding, Mitchell was concerned that might not hold “at a time when we’re asking them [NZDF] to do more and more.”

“As Minister of Defence, I will work to ensure the men and women of the NZDF have what they need to do their job.”

In a statement, Air Vice-Marshal Kevin Short - the NZDF’s vice chief - said the reallocation of resources was a part of its annual budgeting process for the coming financial year.

“The Government and taxpayers of New Zealand expect us to be smart with our resources in order to continue delivering our mission today, as well as making the enhancements we’ve identified over the medium term.”

Short said the planning work was “about focussing Defence Force effort and spending on the areas that will have the biggest impact on making us a more effective military”, and would help to enhance its capability.

“Just getting a bunch of new equipment doesn’t by necessity mean we’ll be a more effective military.

“Turning these investments in equipment and platforms into enhanced military capabilities requires them to be integrated with people, training support and enablement systems to achieve a military effect.”

Defence Minister Ron Mark said Keating’s email referred to “routine internal budget adjustments for the Defence Force, within their baseline”.

“As with any organisation, these are prudent to ensure taxpayers’ money is used in the most effective way to deliver the outputs the Government expects of the NZDF.”

Strategy 2025 was an internal Defence Force plan, not government policy, and did not “represent an intention to make cutbacks to capability”.

“As Minister of Defence, I will work to ensure the men and women of the NZDF have what they need to do their job.”