Wednesday, March 15, 2017

Good Lord! Labour is waking up!

News that the Labour Party is waking up to the insane defence force spend-up proposed by the Defence White Paper 2016 is naturally welcomed by defencecosts.nz. Andrew Little's clear statement of priority is not only good politics, but also common sense. Defence Minister Brownlee has claimed that $20,000,000,000 is needed to ensure Defence is "fit for purpose", but that claim bears no scrutiny whatsoever.

Defence is engaged in an orgy of spending as much as it possibly can, relying on American diplomatic pressure to see defence spending bumped up to 2% of GDP. That's what we spend on roads, and most people make far more use of them. There is no rational justification for us to spend 2% of GDP on defence. And if the Minister doesn't know that he bloody well should. Of course Minister Brownlee's main concern is sucking up to the right people, and in this case the right people is President Trump, not the taxpayers of New Zealand.

For while the Labour Party's declaration is a step in the right direction it doesn't go far enough. The fundamental problem with the defence force is structural, and until the structure is changed career officers are going to spend their time trying to find ways to fund their outrageously expensive careers.

For example No.5 Anti Submarine Warfare squadron will want the best kit for ASW, even though there is no need for ASW capability. There are no submarines to fight. The difference in cost between an excellent ASW aircraft and a servicable EEZ patrol aircraft is about US$250 million each. That's quite a lot over six aircraft!

I should stress here that the target of most of my concern is not the Army. The Army has, in my view, been sadly underfunded (except for the ridiculous $700 million overspend on the useless LAVIIIs). The Army is also poorly structured and probably too large. But, in a time of asymmetric warfare, the Army (and bio and cyber defence) is where New Zealand's main defence focus should be. In this day and age armies must be much more police-like and land combat is only one of the capabilities needed. My real concern is with the utter fiscal irresponsibility of the Navy and the Air Force. Neither have great track records.

Back in the 90s the Navy bought two ASW frigates which today cost a third of a billion a year to operate and whose sole purpose seems to be sailing around exercising with other navies. They are too expensive to use in EEZ patrol (effectively stealing resources from it), too small for helping much with humanitarian disasters, and not ice proof enough for patrolling the Antarctic in the depths of winter. What they are really good at is hunting submarines. But as ISIS doesn't have any, and there are very few submarines in the Pacific that could reach our waters, that hasn't been much use. Over twenty years these giant money pits have chewed up resources that could have been better spent elsewhere.

HMNZS (A11) Endaevour

Now the Navy is replacing its most efficient ship (Endaevour, worth at most $5 million after depreciation) with a $500 million monster. The capital charge on the "biggest ship in the Navy" as its being billed, will be huge - once again limiting what it can be used for efficiently. It's a move of breath-taking arrogance.

Not to be out done the Airforce has built a helicopter force which does far less than commercial New Zealand helicopter companies do. The RNZAF never flew in Afghanistan but the Helicopters New Zealand Global (Canadian Helicopters division) did. The RNZAF helicopters cost taxpayers $200 million a year while HNZ Global makes $200 million a year and pays tax for, among other things the RNZAF to waste. That might be OK if the RNZAF helicopters were all high technology Apache attack helicopters (the US Army bought an extra 35 for US$591 million in 2015) armed to the teeth and solely useful for killing people and blowing things up. That obviously isn't a capability that civilian companies are allowed. But the Air Force's 8 NH-90s (which we bought for US$533 million) are not only the most expensive helicopters of their kind, but are also unarmed transport helicopters little different to the capability a civilian company might buy if they suddenly had more money than sense. In short the RNZAF helicopters are a giant waste of money compared to commercial operators and deliver less, rather than more value to New Zealand.

The same could also be said for the RNZAF's latest acquisition. They spent a $150 million on non-NZ made Texan II air trainers (we do make air trainers at Pacific Aerospace in Hamilton) used for initial pilot training of military jet fighters. The RNZAF doesn't have, and couldn't use, jet fighters. Most of the Air Force's fixed wing planes are multi engine turboprops needed for the vast ranges in the Pacific. The only possible target inside any conceivable New Zealand based jet fighter's combat radius is French owned New Caledonia or Australia's Norfolk Island. Neither are rational targets. Nor does the RNZAF need to train new combat pilots with high performance single engine aircraft given they will spend their careers in multi engine aircraft. Especially when there is a plethora of commercial air training operators in New Zealand who can offer the capability far cheaper. So what are these Texan IIs for? Air shows and displays! Really! That's $150m not spent on Police or schools but spent on air displays by the Air Force. Unbelievable!

Private L29 jet operated by Double XX Aviation

While New Zealand civilians buy, service and maintain a fleet of old L29 Czech trainer jets which are the mainstay of air shows out of their own pockets, the taxpayer funds the Air Force to do the same so that its officers have something to fly.

The only way this is going to stop is to take combat capability out of the equation and convert the Navy and the Air Force into a Coast Guard. That's what Norway and Ireland have done. The career officers will make grave faces about protecting our shipping lanes (all of which are impossible to blockade) and similar bullshit. But Norway, which has a land border with Russia has a Coast Guard not a Navy. Ireland too. Both are richer than we are. If we had a Coast Guard then we would get the mix of lower cost, lower capability systems this country can actually afford.

By contrast the Army should incorporate a helicopter component (as does the US and Australian armies) and these should be armed. That way you have only one mobile combat force that is able to be deployed by sea or air. Realistically New Zealand would lose almost no defence capability, increase its industrial assistance via defence spending but reduce its overall defence expenses significantly. This could then be redeployed to social spending as Mr Little has realised.

see www.defencecosts.nz for the full story.