Labour Defence Minister Peeni Henare has signalled the government is planning to trim the defence budget. He says Covid-19 means the Budget is now much tighter and defence will look different under Labour than it did under its coalition with NZ First.
This comes as Australia, New Zealand’s primary ally, is pursuing a defence strategy aimed at countering the rise of China, while warning that Australia faces regional challenges on a scale not seen since World War II.
Australia is re-equipping its armed forces with a 10-year budget of $A270m. But for NZ, the planned $20bn outlay on new defence equipment is the latest Covid-19 casualty, with a range of options to scale it down now before the finance minister.
The major investment in a range of new military hardware and upgrade was announced by former Defence Minister and NZ First MP Ron Mark in 2019 .
Henare says that when he got the job last year, Prime Minister Jacinda Ardern “was quite clear that she wanted Labour, us, to put our fingerprint on defence”, but what that looks like would be influenced by Covid-19.
“I made it clear that I wanted to have a policy reset, in the first instance.
“You’ll see a distinctive shift and the ability for Labour to be able to influence this … portfolio but in line with our broader objectives, and that is obviously with respect to foreign policy,” Henare says.
The Defence Capability Plan included $1bn to replace the old 1960s Hercules fleet with modern versions – or “Super Hercs” – by 2023 and four new P-8A Poseidon aircraft, which will replace the Orion fleet, also in use for decades.
Those projects are largely completed, along with the frigate upgrades, and so won’t be affected.
Henare, though, is flagging a stronger focus on upgrading bases and other infrastructure that supports defence force personnel.
“It’s little known that in a flood in king tide, quite a large percentage of the Devonport base goes underwater, and that’s a problem,” he says.
Cabinet has also signed off on a “significant investment” on a logistics base for Linton Camp near Palmerston North.
There are question marks over much of the plan, however, including the timetable for the new Southern Patrol Vessel (SPV), and a proposed “enhanced” sealift vessel to work alongside HMNZS Canterbury – between them estimated to cost more than $1.5bn.
Henare is reluctant to start naming projects that might be scrapped or delayed. He has been quoted as saying “all of the capability plan” progressed under former minister Ron Mark is “still on the table”.
“A redraft will look towards aligning with our priorities under this government.”
While he will not put a figure on how much they’re looking to trim overall, Henare says the new plan will not have a $20bn price tag.
All of the options before the finance minister feature some degree of scaling back, says Henare, as well making sure the decisions help New Zealand economically.
“We want to be stimulating our economy and how do we do that in the defence portfolio? One way not to do that is to send large amounts of our money offshore.”
So do the planners think NZ’s ally across the Tasman is wasting its money?
Not if they are keeping posted with what China is doing. The “Economist” carries a report on how the Chinese are building a new aircraft carrier which the journal says will mark another leap forward in China’s advance as a naval power.
The new ship is expected to have a catapult, a system currently used only by the US and France. This will allow the ship to launch more fuel and weapons—and not just fighter jets.
The air wing of the new carrier will almost be as large as the entire air force of the Philippines.
America’s Indo-Pacific Command estimates China will operate four carriers by 2025.
Not surprisingly, the Australian government has indicated the ADF will get long-range anti-shipping missiles as it refocuses on possible conflict with China in the Indo-Pacific.
Equally unsurprisingly, National is warning the Ardern government to proceed cautiously with its budget trimming plan, because there are significant operational and strategic risks.
“Frankly, it’s a pretty lean operation as it is , and to be cutting into that would be making serious strategic decisions and scaling down in a way that could be considered reckless,” defence spokesperson Chris Penk says.
NZ does not have the luxury of making these sorts of decisions while ignoring the foreign policy implications.
“The reality is that we are not equipped to have an independent foreign policy backed by a military that is able to stand alone.
“So we do need our friends, we do need allies and so we do have to take seriously the attitude that they would have to us being less inter-operable with them and carrying our weightless overall.”
According to some reports, the importance of the trans-Tasman relationship, and the ability for the two militaries to train and deploy together, or ‘interoperability’, was raised in Queenstown by Australian Prime Minister Scott Morrison with PM Ardern in May.
Point of Order suspects he was a bit more vigorous than that.
Earlier in a speech at the Australian Defence Force Academy, Morrison argued the Indo-Pacific is the “epicentre” of rising strategic competition and “the risk of miscalculation — and even conflict — is heightening”.
“The Indo-Pacific is where we live — and we want an open, sovereign Indo-Pacific, free from coercion and hegemony,”.
He insists increasing Australia’s defence capability is vital to shoring up the nation’s position in the region.
It leaves a question mark over the NZ government’s strategic thinking – and an even bigger one over the decision to cut defence spending.