Sunday, June 3, 2018

Ron Mark needs to open up NZDF

A recent front page story in the Dominion Post by Andrea Vance [https://www.stuff.co.nz/national/politics/104238788/hey-big-spender-nzdf-chief-flew-top-brass-around-nz-on-costly-helicopter-rides] pointing out that the NZDF had used the NH90 combat transport helicopters to take foreign brass to dinner seems to have so far failed to embarrass New Zealand’s minor defence empire.

One reason for this appears to be that it seems to be reciprocating treatment its own brass have enjoyed overseas in other defence empires. The other is the way the NZDF is, with the connivance of New Zealand First Party Defence Minister Ron Mark, succeeding in its battle with the truth by its obscuring costs. The figure Vance uses for the cost of the helicopter rides is ridiculously low.

Over the past two years the NZDF’s appropriations in the Budget has become increasingly obscure. The purpose of the budget is to illuminate government spending to the public but in budget 2018 the coalition government seems to be plumbing new depths in avoiding departmental accountability.

Consider this drivel (p60, [https://budget.govt.nz/budget/pdfs/estimates/v4/est18-v4-deffor.pdf]):

The appropriation increased by $29.541 million to $839.757 million for 2018/19. This increase between 2017/18 and 2018/19 relates to:
  • increased funding of $28.188 million as a result of the Defence White Paper 2016 funding decisions for the introduction into service of new capabilities that enhance and maintain the delivery of outputs 
  • increased funding of $3.613 million in Capital Charge as a result of the revaluation of assets, and 
  • increased funding of $143,000 due to a reduced contribution towards the share of costs for Budget 2015 whole-of-government initiative 
That’s the explanation for increasing a budget activity code 28-fold from 29 million to 839 million. It doesn’t even pretend to add up and its deliberately clear as mud.

Considering that Ron Mark has had a long record of criticizing the NZDF’s expenditure while in opposition you might think that as a new Minister he might actually try to get some daylight into NZDFs nonsense budget. Is he following a long line of Ministers into meek submission to the Defence Force’s game of hoodwinking the public?

Because if you can’t change an aspect of government by voting you really don’t live in a democracy. Increasingly the NZDF is doing its level best to not to defend democracy as it claims but erode it. How can any politician campaign to change aspects of their portfolio if they don’t get clear information about them? How can the public demand change from politicians if information about what a department is doing is obscure nonsense?

Take for example Vance’s column about helicopter rides for the brass.

The article claims that the cost of operating the NH90 helicopter is $1,182 an hour. This is utter crap. That figure is the marginal consummable cost per hour. It is not the operating cost. A marginal consummable cost is the cost of the fuel, pilot, machine oil etc . It’s like saying the cost of operating a car is the cost of the petrol and oil consumed in an hour of extra driving.

But that is not how you calculate the cost of operating aircraft. For a start aircraft have a limited lifetime based on flying hours. After so many flying hours aircraft require maintenance. So the cost of operating an aircraft has to include the maintenance costs needed to keep the machine flying safely. In the Air Force’s case there is no garage down the road to take its NH90’s to. The Air Force is not just the flier of the aircraft it has to be its own garage as well. So the cost of operating the aircraft has to include the cost of operating the maintenance of the aircraft as well. This is not unusual. It is what any commercial helicopter operator has to do.

In addition to the maintenance costs of operations is the capital cost of operating the asset. If you buy a car you typically have finance costs and insurance costs as well. The government doesn’t borrow from the bank to buy defence kit nor will any insurer (in their right mind) insure an air force helicopter. Government takes money from trade in the economy to fund the things it does (taxation). So Governments charge a cost of capital on all departments including defence. The point of this is to ensure that capital expenditure is properly accounted for, just as it would be by any business that needed to buy a machine for production in a factory.

So what is the cost of operating the NH90?

According to this source [https://corporalfrisk.com/category/sweden ] the Swedes were paying just under thirty times more than Vance reported at $31,740 per hour to operate the NH90s, while the Finns (who bought their NH90s for a fraction of the price paid by New Zealand) were paying $25,000 per hour and have brought it down to $16,700 per hour.

This source [https://www.strategypage.com/htmw/htproc/20180524.aspx ] claims the NH90 operating cost is US$24,000 $34,370 ( and points out the US blackhawk is a quarter of that). That figure is from Wikipedia (sourced originally from [https://www.svt.se/nyheter/inrikes/forsvarets-helikopter-dyr-att-flyga] based on the Swedish high cabin NH90 model.

This article [https://www.globalsecurity.org/military/library/news/2018/01/mil-180125-sputnik02.htm ] on Global Security says the Norwegian NH90s cost US$23,000 or $32,930 per hour.

However a large part of the operating cost comes down to the purchase price which has to amortised (plus capital charge) over the operational hours of the aircraft. The Finns bought their NH90s for $29 million each. We spent $96 million each on each operational NH90, more than three times more. So it should not be too surprising if our operating costs are considerably greater than that of the Finns.

When figures were more forthcoming from Treasury (in 2016) the total operating cost of No.3 Squadron which operates the NH90s and the A109M training helicopters was $229 million. No.3 squadron said “The Squadron is annually allocated approximately 1500 flying hours for the A109 and approximately 1700 flying hours for the NH90 to achieve the stated tasks". Assuming the NH90 costs four times the A109 (and that is very generous because the Swedes report their NH90s cost four times the Blackhawk UH-60 which is bigger than the A109) and you divide the total squadron operating cost by the flight hours you got an operating cost to taxpayers of $107,647 per flight hour for the NH90s and $30,000 a flight hour for the A109s.

On Responsibledefence.org.nz I contrast this with a private New Zealand helicopter firm (Helicopters New Zealand Global) that operates in Afghanistan for the US military (the RNZAF never flew in Afghanistan) and delivers 46,202 flight hours. It operated almost 40 choppers globally for a cost of $194m including provision for tax. So a private firm could deliver 14 times more operational flight hours for less cost and pay tax to help fund the Air Force. In short the Air Force is 14 times less efficient than a private company at delivering flight hours.

This is why every flight hour the NH90s spent delivering bigwigs to dinner matters. It isn’t a $100 per passenger ride as Vance suggested but closer to a $10,000 per passenger ride.

But without honest and open figures who would know what waste the Defence Force is perpetrating. If Minister Mark is even vaguely able to influence the Defence Force the one thing he should demand is open information. There is nothing militarily sensitive about the operating cost of defence equipment. Nobody is counting the dollars when the bullets start flying, but if there aren’t any bullets left because the brass spent it all on dinner that is something we, the owners of this government department should be able to find out.

The US Air Force Comptroller has released this table of costs [http://nation.time.com/2013/04/02/costly-flight-hours/] so if the US can release operating costs so can New Zealand. Let’s see it!












Friday, April 6, 2018

Fake News to support RNZAF arms deal has begun


In the paid adnews links on Stuff.co.nz a link to Kiwireport.com with an article about "Chinese superweapons that the world needs to know about" by Ethan Gorstein. The amazing image of a catamarran aircraft carrier is typical of those clickbait stories designed to get people to follow links in that it is clearly the work of an illustrator than any naval architect. It features an RNZAF roundel as the firm's mini icon.

Naturally Responsible Defence was immediately drawn to the story which was basically a breathless parade of Chinese military developments which were largely misleading if not untrue. The interesting thing about Kiwireport.com is that it is a two year old domain held via "Registration Private Domains By Proxy, LLC", and previously "Gil Bar Tur Pesto Media Shemesh LTD" an Israeli firm. It is about as Kiwi as an Indian made tiki.

So how is it this firm has the money to place an ad on Stuff? And more to the point why would it bother? Well, the answer to that is pretty easy to guess. Right now the RNZAF is in the market for replacements for the P3-K Orion anti submarine warfare aircraft. As this blog has noted many times there is no justification for ASW aircraft in New Zealand at all but military forces do not give up capability easily and defend their budgets ruthlessly. There have been numerous speculative news reports about possible replacement aircraft but especially the US made P8 Poesidon which would cost about $1.5 billion.

However the sudden interest of Israel in New Zealanders' perceptions of a Chinese military threat might suggest that the Israeli military industrial complex has an interest in pursuing the contract as well. Israel Aerospace Industries has developed a suite of ASW technology which can be retrofitted into any long range business jet. [http://www.iai.co.il/2013/32981-46349-en/MediaRoom_News.aspx]. Israel is also known to operate a sizeable and sophisticated cyber warfare system [ https://www.israelnationalnews.com/News/News.aspx/208126 ] and troll armies [ https://www.theguardian.com/media/2016/nov/06/troll-armies-social-media-trump-russian].

Israel is not the only nation in the world to offer this technology. SAAB of Sweden also offers this kind of integration using the Bombadier Global 500 platform and the Leonardo radar https://quwa.org/2017/03/05/profile-saab-swordfish-maritime-patrol-aircraft-mpa.

While I initially favoured a business jet platform for maritime patrol (not ASW) over time my view has changed significantly. I now believe it would be better to combine the transport airlift capability of the RNZAF with the maritime patrol capability effectively reducing two squadrons down to one. Transport aircraft such as the Hercules C-130J or the KC-390 are used as maritime patrol aircraft (by adding additional radars, and imaging stations) and can there is no reasons taxpayers should pay for two squadrons when one would do.

While the RNZAF can probably claim 'plausible deniability' relating to the paid story on Stuff it is probably only too happy to see Israeli agents doing its propaganda work for it. After all, few New Zealanders are particularly interested in or aware of the capabilities of Chinese submarines. The prospect of Kiwis supporting an investment of billions in ASW aircraft while their hospitals are full of mould is rather unlikely so the RNZAF certainly won't want to own any of this obvious "Yellow Peril" nonsense.

However the Israelis would surely be incredibly naive to think that New Zealanders will be
keen on an arms deal with their country which they are currently engaged in gunning down unarmed Palestinian protesters who simply want the same 'right of return' that Israel offers any Jew in the world. The simple fact is Israel's racist and apartheid policies stink to high heaven, leading even the National party to side against Israel in the UN.As one of the many who stood against a simple Rugby game with an apartheid state in a protest movement that split the country nearly in 1981 I rather doubt the Labour party would be at all keen to put its fragile coalition to the test by spending several hundred million on Israeli arms - especially when there is a Swedish alternative.

Even more to the point I cannot see any strategic reason why New Zealand would want its maritime security to depend on Israeli technology. For as we have seen time and time again in the aerospace sector those that sell technology can stop supporting technology for any reason they care to think of.

But the Israelis are not naive, and they probably realise this. This makes me think that an Israeli Aerospace connection is probably a ruse by a somewhat naive organisation that thinks it can get away with this kind of stunt: The New Zealand Defence Force.

Why do I think this? It's as simple as the detective work in most murders. In most murders it is the spouse or partner that did it. Why? Because nobody else cares enough. This is exactly the same rationale.

Nobody else cares enough about New Zealanders perceptions of a "yellow peril" threat from China as those whose jobs depend on it. Israel can find other, much easier customers, but the NZDF is stuck with the public it has. And as it has repeatedly demonstrated a profound contempt for the economic welfare of the taxpayers that sustain it, combined with a tendency to place very fast and lose with the truth, it would seem the NZDF would be the obvious suspect in this fake news attempt.

I certainly urge my friends and colleagues still in mainstream journalism to investigate.

FOLLOW ON

The NZ Herald followed this rather smelly ad with a story [http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12029995]  lifted from the Sydney Morning Herald quoting un-named official sources suggesting that Australian defence officials were concerned that the Chinese were seeking to establish a Naval base in Vanuatu.

It was a classic "Yellow Peril" story that racist elements of the Australian media and political life revel in. NZ Herald ran the story, practically verbatim.

It took the BBC (half a world away in another time zone) to call the Vanuatu government and check. The answer? http://www.bbc.com/news/world-australia-43707975 No. Vanuatu doesn't want any military bases, thank you very much.

The Chinese government carefully referred reporters to Vanuatu officials. However anyone with half a military brain can see that a Chinese base in Vanuatu would be logistically very vulnerable. While the Chinese have militarised an island in the Spratley chain 5,000km away in the South China Sea the logistic link back to China is within air cover range of China. A base in Vanuatu would be completely on its own. So if there were any hostilities a Vanuatu base wouldn't be worth anything.

But that isn't the point. The point is "Yellow Peril". It's all they have to sell the public the notion that they need billions of dollars worth of anti-submarine aircraft. And it's not just crap, it's pretty racist crap at that.


Monday, January 29, 2018

Kiwi taxpayers spend $6 million saving 7 Kiribatis from drowning, $0.3m on 1,796 Kiwis.

Last year 88 kiwis drowned. There are a number of agencies which try to prevent this loss of life, including the Royal NZ Coastguard, Life Savers NZ, the New Zealand Water Safety Council all of which have to raise money from the public or businesses to maintain their operations. The news has, naturally been topical lately because 2017/18 has been a fairly not summer.

But at the same time there was another story happening. A RNZAF P-3K2 Orion was flying around Kiribati looking for survivors of a ferry which had gone missing with 57 people aboard. Eventually it found one boat with seven aboard [https://www.reuters.com/article/us-kiribati-ferry-rescue/search-resumes-after-eight-survivors-of-kiribati-ferry-rescued-idUSKBN1FH0D9]

Now Kiribati is 5,500km from New Zealand [https://www.distancefromto.net/distance-from-kiribati-to-new-zealand] which is just within the one-way range of an Orion [ http://www.airforce.mil.nz/about-us/what-we-do/aircraft/orion.htm]. So this anti submarine warfare aircraft wasn't just making a minor detour while patrolling our EEZ it is carrying out a full on Search and Rescue mission.

As you can see, technically Kiribati isn't strictly inside the the NZ SSR but obviously we do our best to help out. But at what cost? The NZDF Budget statements under National over the years became more and more opaque making it very difficult to work out how much it cost taxpayers to operate the NZ Defence Force. However the last time such values were available (2015) it was clear that for each operational hour the RNZAF spent flying the P-3K2 Orion Taxpayers paid $85,000. So ten hours flight there and back plus five days of ten hour operational patrols comes to 70 hours or just shy of $6 million.

The Surf Life Saving New Zealand Annual Report [ https://issuu.com/slsnz/docs/annual_report_2017_full_version/1?ff=true] shows that the annual expenditure of that organisation is just shy of $9.5 million. So the RNZAF mission to Kiribati costs taxpayers $6.5 million but running 5,000 New Zealand life saver volunteers quarter of a million patrol hours and 1,796 rescues has to come from lotto tickets and cake stalls.

What is this shit?

The only way this makes sense is if you operate on the basis that you need to find something useful for a large but completely useless military asset to do, because you need to have a completely useless military asset regardless.
Why do you need a completely useless military asset?

  1. To keep the US (who sells them) sweet.
  2. In case a submarine attacks us.

As this page points out [ https://sites.google.com/site/nzdef2030/flaws-in-nz-military/na ] there is an almost zero chance of our being attacked by a hostile submarine. In two world wars we never were. There is no particular reason for New Zealand to get involved in blowing up other people's submarines either. Anyone who feels threatened by submarines (e.g South Korea) already has (16 of) its own P-3 Orions for that purpose.

So how about this crazy idea. How about not having an anti submarine warfare squadron at all and just replace the C-130H Hercules transport with an aircraft also capable of maritime patrol. That might save us a $1.5 billion (I am not kidding).

You do not need sonar buoys, or magnetic resonance to detect an overloaded lifeboat floating in the Pacific. That's for detecting a stealth war machine. The nice thing about SAR victims is they really want to be seen. What you mostly need is standard ocean surface scanning radar, FLIR (forward looking infrared), binoculars, and eyeballs. This is all you need to find 6,000T fishing boats too! Hell, a satellite can spot them. Fishing boats are very hard to hide compared to a submarine. 

It would be perfectly feasible to half the number of large multi engined aircraft in our Air Force by doubling up on transport and EEZ patrol functions. That would save us both capital and operational costs. And if we really need extra capacity for civilian missions like SAR and Disaster Response a private contractor like Air Chathams could provide it at a fraction of the cost. Yes, some in the RNZAF will scream and have tantys, (just imagine the fuss if you look their indulgent $150m aerobatic trainers away) but a government which is interested in results needs to look hard at the numbers.

The Labour-NZ First coalition has made a great deal of noise about impoverished kids. But so far the answer seems to be more cake stalls. If it seriously wants to make a difference it has to look very differently at the gargantuan waste of money that is the NZDF.

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Life Saving NZ income includes $2.2m from Lotto, $0.2m from NZSAR,$0.1m from Sport New Zealand. The rest of the $9.5m is fundraising. [ 2017 Annual Report, page 34]