Defence loses battle for huge spend-up

The conflict between Helen Clark and officials over the future shape of the defence forces has heated up again.

Nicky Hager reports.

Just a year ago the RSA was attacking the government’s defence plans as being “frightening” and “backward”. National said Prime Minister Helen Clark was “hell-bent on disembowelling New Zealand’s defence force”.

Seven retired defence chiefs went public attacking moves towards a more New Zealand-oriented defence force. A lot has changed since then. In a year, defence conservatives have regained considerable control of defence decision making, Clark has become the first prime minister since the Vietnam War to send SAS troops to a US war and elements of her plan to change our military’s Anzus-era orientation have been thwarted.

But last week the hawks in defence pushed her too far. A cabinet paper was presented at Wednesday’s cabinet policy committee meeting which, if Clark had not stopped the process, would have been a further victory for officials quietly campaigning to stop re-orientation of the defence forces.

The confidential document intended for approval at tomorrow’s cabinet meeting, contains a $2380 million spending plan for new military purchases over the next 10 years. The most controversial item is $390m for new “mission systems” for the air force’s six Orion patrol aircraft. It was this which made Clark baulk.

The mission systems include sophisticated radars, computers and electronic sensors used to detect targets such as ships_plus communications and eavesdropping equipment. Defence wants the same equipment as is on Australian and US surveillance planes: designed for hunting enemy targets in hi-tech war zones, not for the Orions’ routine patrolling in the South Pacific. The government had already said no to this approach and sent defence away to produce new, cheaper options focused on New Zealand’s needs. A year later, on Wednesday, it had arrived back to try to slip through a re-packaged version of its original plan.

The earlier proposal for upgrading the Orions, developed under a National government and called Project Sirius, was rejected by the Labour-Alliance government in August 2000. Defence Minister Mark Burton said that proposal “would have locked us into a specific capability before a clear assessment of how best to meet New Zealand’s [maritime surveillance] needs was available”.

The story of this assessment, completed in February 2001, and the attempts by defence officials in the year since to undermine it, give an insight into the politics of defence in New Zealand.

Clark felt defence was committed to its Project Sirius option and set up a review within her own department chaired by Pat Helm, a special defence adviser to prime ministers since the 1980s. She briefed Helm at length in her office, without defence officials present, explaining that he was to look beyond the Australia-US option and study New Zealand’s maritime surveillance needs. She said she wanted a professional and irrefutable review that could form the basis for a new policy direction.

Helm is no peacenik. He was the only official in government who had helped write all the 1990s National government defence reviews. However, after reviewing what Orions actually do, his report was scathing. His Maritime Patrol Review analysis began: “There is a widely held impression among New Zealanders, relating perhaps to the considerable public relations activities of the RNZAF, that military assets provide a comprehensive coverage of our ocean areas. This is not the case at all.”

He reported that the Orions conducted surveillance around New Zealand “for just 2%-3% of each year” and that 99% of marine rescues were by civilian aircraft and vessels. He found the Customs Service and fisheries authorities were under-resourced and poorly served by defence. Each Orion aircraft flew “on average only 5% of the year” and, even then, 75% of this was for defence’s priority of training and exercising for war fighting roles (although in 35 years they had never been used for this). It was a similar story with the frigates.

The report recommended a very different approach to that favoured by defence. It proposed a re-oriented navy with a fleet of patrol ships built to commercial standards filling a range of customs, fisheries and military roles around New Zealand. On Orions, it recommended a “major shift in focus” towards surveillance for civilian roles, such as patrolling around New Zealand, instead of equipping the Orions to “engage in major coalition war with advanced military nations”. It proposed more surveillance aircraft, possibly including “some” of the Orions, but fitted with much less costly commercial (as opposed to military) radars and other detection gear. Anti-submarine equipment and the “large data-handling/communications capabilities” needed for coalition war could not be justified. Conservative officials reacted angrily.

At a Ministry of Foreign Affairs and Trade senior management group meeting with three cabinet ministers on March 12 2001, foreign affairs secretary Neil Walter described the Helm report as “one of the worst documents I’ve seen”. Behind the scenes, the navy and air force old guard intensified its campaign to resist the policy changes.

Guided by professional public relations advice, they focused their campaign on army head Maurice Dodson, the most prominent of those at Defence Headquarters supporting the government’s policy direction.

A whispering campaign, backed by a co-ordinated stream of documents leaked to opposition MPs, was orchestrated to discredit Dodson. The aim: to take out the main advocate for an army-centric and more independent defence force before he had his expected promotion to chief of Defence Force.

As an unnamed witness told the 2001 Ansell-White inquiry into the defence leaks: “The aim [of the leaks campaign] was to ensure the right people would hold the key positions when the next round of major funding and equipment decisions occurred.” It worked.

With Dodson’s downfall, the air force and navy_which spend big but compared to the army do little_were restored to dominance. (Ungenerously, Clark and Burton left Dodson to sink, seemingly not appreciating the policy significance and relieved it was he, not them, taking the flak.) It’s surprising how much news coverage the accusations and leaks received month after month without the motives of the accusers and leakers being questioned and investigated.

To the public, the defence issue looked like a circus: more leaks and accusations, yet another investigation. The real policy issues dropped from sight. All this served the conservatives well.

Burton, who has little interest in defence and was preoccupied by the succession of controversies, put the job of implementing Helm’s recommendations into the hands of defence staff who opposed them. They got to “build on” (ie rewrite) Helms’ conclusions into what they wanted.

The first defence victory was in January this year when the government announced $500m of new navy ships. Helm had recommended a fleet of affordable vessels under “guaranteed operational control” of a non-military Maritime Control Centre (ie guaranteeing availability for the under-resourced customs, rescue and fisheries roles).

Instead, cabinet approved half the new money going to a large multi-purpose military vessel, equipped with frigate-type equipment, which will end up serving primarily as a training ship for frigate crews.

The cabinet paper admitted that many of the civilian roles would not be helped. Colleagues reported that Helm was appalled by the decision.

The Orion funding proposals intended to go to tomorrow’s cabinet meeting are even less in tune with the prime minister’s 2001 review. The cabinet paper didn’t mention the proposal for using civilian aircraft or reducing the number of Orions.

Instead, the proposal was simply a slightly scaled down Project Sirius, the main difference being that it called for “sensor, communications and management systems” required for “surface” surveillance. It was Project Sirius with some of the anti-submarine modules left off (or deferred to a National government) to make it more palatable to a Labour-Alliance government.

The Orions were purchased in the 1960s as anti-submarine warfare (ASW) aircraft, identical to the Cold War Orion squadrons of various US allies. The ASW role has diminished with the passing of the Soviet submarine fleet and today the US and its allies focus their Orions on “anti-surface” roles. For example, the US navy website records that during Operation Desert Storm in Iraq in 1991, US Orions “searched for Iraqi naval units and directed strike aircraft to them”, claiming that more than 50 destroyed Iraqi vessels “were initially detected by the P3s [Orions]“.

Clark had publicly agreed with Helm last year that the submarine threat was insignificant. Like the Skyhawks, this is a rational decision to get rid of expensive capabilities for which there is no longer any serious use. But it is not a reorientation of defence. The key to Helm’s recommendations is shifting from a “full military capability” to “high quality commercial radar and electro-optical systems”_giving priority to surveillance around New Zealand over Gulf War-like coalition wars of the future.

Experience tells us that once defence has sophisticated military ships and aircraft, most of their time is spent keeping up training and exercising for the combat roles. That is why the frigates and Orions do so little now protecting New Zealand from resource poaching, smuggling and other practical threats. If most of the maritime surveillance spending goes into more hi-tech gear, that’s the way it would stay.

Although cabinet has not yet seen specific defence proposals for the Orions, there is no doubt that defence is pursuing military rather than commercial systems_in defiance both of Clark’s review and public statements. The president of the US arms manufacturer L3 Corporation (previously called Raytheon), Bob Drewes, was in Wellington in the week of April 15, meeting with air force and defence ministry staff during the preparation of these proposals. Although another company (Thales Corporation) has also been lobbying for the contract, L3 will be defence’s preference because they want the same equipment as Australia and the US.

The price tag also makes it clear they want the hi-tech military option. In 1998 National approved the Orion upgrade “in principle” at a $220m price. In March 2000 a private defence power point presentation to Burton stated the price as $445m and when the government turned down Sirius in August that year it had risen to more than $500m. Without the submarine sensors, the price in the current planning paper is $390m and in the accompanying cabinet papers “$345-$410m”.

The problem is that cabinet ministers, who argue knowledgeably over $10,000s in portfolios they understand, have no basis for judging whether an Orion sensor should cost $1m, $10m or $100m. At $390m, New Zealand would be paying more to upgrade six planes than governments have paid_in total_to Ngai Tahu for the South Island, Tainui for Waikato land and all other Maori land settlements to date.

That is why independent reviews like Helm’s are vital. During their study, his committee found that the main surveillance radars for Orions could be bought for about $4m each_a fraction of the military options. They estimated that the total cost for “high quality commercial systems” would be “$NZ10m-$12m per aircraft”.

The greatest cost in the military surveillance option is complex data-processing computers designed to integrate all the targeting information coming from aircraft’s various sensors and other parts of the battlefield. These central computers will make up a large part of the $390m. Sources say defence advisors told Burton these central computers were necessary for civil and regional patrolling, thus getting his buy-in to the funding document. This is not correct. The Helm report concluded that these computers were unnecessary except for high-level war roles. They wrote: “Having considered the military requirements in the light of government’s defence policy framework, we are not persuaded that a comprehensive military aerial maritime patrol capability incorporating … large data-handling/communications capabilities should be maintained.Based on this independent review, equipping the Orions with high quality radars and optical sensors, and military communications equipment to allow co-operation with Australia, could be done for well under $100m. This is still expensive, but it would give New Zealand good maritime surveillance for this region for $300m less than proposed. The extra $300m is for military capabilities the review concluded we do not need.

Burton had already put his name to the defence funding paper when it went to the Cabinet Policy Committee on Wednesday. Curiously his paper did not once mention the word Orion or the controversial name Project Sirius in three pages of discussion. Instead the next major spending decision coming up on defence was being slipped before cabinet as an obscurely titled item, “P-3 mission systems”.

The prime minister sent the officials away to come up with a much cheaper option. It is once more Clark vs the defence old guard. The outcome of this struggle will determine whether she can renew her government’s planned re-orientation of defence – or whether defence will succeed, again, in defending its fine tradition of existing primarily to be available for far-away wars.