Hon Phil Goff - Minister of Defence

24 November 2005

Speech Notes

NZ Army Leadership Conference

Speech delivered Thursday 24 November
Massey University, Palmerston North

Can I begin by thanking Massey University and the New Zealand Army for inviting me to address the conference today.

The topic I have been given, “New Zealand in the International Environment” is particularly challenging in terms of the scope it allows for what I might choose to talk about.

Given that the conference theme is about leadership, I thought about three aspects of leadership that it may be pertinent for me to discuss.

The first is whether there is a leadership role, and if so what, for a small nation of just four million people within a much larger international community with bigger and more powerful players.

Secondly, I would like to touch upon the leadership role of government in setting a vision and a direction for the New Zealand Defence Force.

And thirdly and much more briefly I would like to talk on the demands that our contemporary economic and political environment places on leadership within the New Zealand Defence Force.

To begin with the first aspect of New Zealand’s place in the world, our size results in our having no illusions about our ability to impose our will on any other country.

Nor does our location suggest that New Zealand has a huge strategic importance. We are, as David Lange once quipped, a dagger pointing at the heart of Antarctica.

But notwithstanding our relatively isolated geographic position and size we as a nation have never been isolationist or reluctant to pull our weight and to become involved in international affairs.

Our self-perception has been shaped by our participation in the two major international conflicts of the twentieth century.

In the First World War, our per capita casualties were amongst the highest of any country. After the Second World War, we were a notable participant in the establishment of an international body, the United Nations, which could fulfil a central role in resolving disputes and settling conflicts between nations.

We have from that time maintained a strong commitment to promoting the role of multilateral institutions in maintaining rules-based systems governing conduct between nations.

This has led us to endorse not only the United Nations, but also the World Trade Organisation, which determines rules governing international trade.
As a small country, multilateralism is an attractive alternative to large and powerful nations simply being able to assert their will.

New Zealand has also developed in more recent times a strong belief that we should as a nation independently promote our own values and principles, rather than as we once did simply follow in the footsteps of larger and more powerful friends.

While we lack hard power as a small country, we have been able to exert influence and win respect for the role we play in the world. In our case leadership depends on our ability to persuade others of the merits of our arguments.

I take some pride in the comment made to me by UN Secretary General, Kofi Annan, when he visited New Zealand that he regarded us as a model international citizen.

Our reputation and effectiveness can be judged in part by the success of individual New Zealanders in the international arena, Mike Moore elected as Director General of the WTO, Don McKinnon as Secretary General of the Commonwealth and recently Sir Ken Keith elected as a Judge on the international court of Justice.

As a liberal democracy we have exercised leadership in promoting commitment to democratic procedures, good governance and human rights. We have been a strong voice in promoting non-proliferation and disarmament.

We have played a prominent role in promoting trade liberalisation and in opposing the distorting effects on trade and development of export subsidies, domestic subsidisation of agriculture and high tariffs preventing market access.
Peacekeeping is another area where New Zealand has played an important role.

As Minister of Foreign Affairs over the last six years I had the privilege of visiting Defence Force personnel serving in Bougainville, East Timor, Solomon Islands, Bosnia, Cambodia, the Sinai, Israel and Afghanistan.

While our role is often small, in some areas in the Pacific in Bougainville, East Timor and the Solomons we have together with Australia played a leading role in restoring and maintaining peace.

We are a significant player in the Pacific in development, trade, security and assisting in conflict resolution. Our cultural, family and historical links and the attitude and ability of our Defence Force personnel to get on well with local people have assisted in the leadership role we have been able to play.
Ironically one factor in our success in peacekeeping around the world is that because we are small we are seen by locals as non threatening and not simply being motivated by promotion of our own interests.

It is vital that we continue to exercise a leadership role in the Pacific.
In particular in Melanesia, population pressures, land disputes, ethnic tensions, failing economies, corruption and loss of good governance and the rule of law are factors creating serious instability.

If states fail in the region, the vacuum of authority creates a haven for
trans-national crime and even potentially terrorism.

That not only blights the lives of local people but also threatens the security of the region and impacts on us.

I believe the RAMSI mission in the Solomons is a good model of regional cooperation and measured intervention which has successfully pulled that country back from the brink of anarchy.

While there is still a long way to go, the work that we have been able to do with Australia and others has made a real difference and created the basis for national recovery.

In summary, I believe that New Zealand has punched above its weight in the international arena and has shown leadership by example and in influencing outcomes in key areas.

I want to turn now to the second question, which relates to government leadership in setting direction for the New Zealand Defence Force.

Not long after becoming a Minister in 2000, I noted in a speech on foreign security policy challenges that in a troubled world military forces would continue to be an important foreign policy instrument and crisis management tool for New Zealand.

Early in its term the new government noted that there had been a shift in New Zealand's strategic environment.

The threat to security from interstate conflict had diminished while the threat to peace from terrorist or criminal activity had increased. We also recognised that after a decade of funding cuts the Defence Forces were in poor shape.
Significant investment was needed to rebuild them and the structure of the forces needed to be reshaped to maximise their effectiveness in response to the new strategic realities.

Resources needed to be more targeted to those areas where we could make a real and credible contribution to regional and global security. A whole of government rather than a fragmented approach was needed to more effectively meet security challenges.

The government's defence policy framework of June 2000 reaffirmed New Zealand's five areas of policy focus: the defence of New Zealand's economic zone; a strong strategic relationship with Australia; fulfilling our responsibilities in the Pacific islands; an expanding role in the security dialogue of Asia; and a global approach to multilateral peace support and humanitarian commitments.
To meet these policy objectives the future shape of the defence forces was set out in the Government Defence Statement: A Modern Sustainable Defence Force Matched to New Zealand's Needs.

It directed investment towards the rebuilding of a combat capable Defence Force encompassing a motorised land force, an enhanced Navy and a refocused Air Force.

To improve its capability, a joint approach was developed to Structure and Operations within Defence.

Changes were made to enhance cooperation and collaboration between the New Zealand Defence Force and the Ministry of Defence.

Policy branches were integrated; joint governance fora established, and shared and separate accountabilities more clearly defined.
As the first major step towards enhancing ‘jointness’ and eliminating unnecessary duplication, Headquarters Joint Forces New Zealand was created; a Joint Command and Staff College was opened at Trentham, and work started on establishing a Joint Logistics and Supply Organisation.
In 2002 the Defence Long Term Development Plan was adopted as a mechanism to update and replace a range of obsolescent capital equipment.
Over the next couple of years, the Navy will acquire seven new vessels. These will allow improved maritime surveillance, greater capacity for sealift, and enhanced fisheries and coast guard functions.
A modernised and motorised Army is now in place, as I hope to observe with Exercise Silver Warrior this afternoon.
We now have 105 new Light Armoured Vehicles that are state of the art. We have recently acquired Pinzgauer Light Operational Vehicles. I am pleased to say the teething problems with transmissions have been sorted out, and when I welcomed home the third rotation of the SAS from Afghanistan on Tuesday, they spoke highly of the vehicles' effectiveness.

The restructuring of the Air Force has been more controversial in respect to the disbandment of the Air Combat Wing.

It is not, however, financially viable for a country of New Zealand's size to have a combat air wing that is sufficiently modern to be a credible combat force, and update and replace all the other aircraft for which we have a more immediate and practical need. The two B757 aircraft have been delivered and will shortly undergo conversion for freight. The P3K Orion fleet's mission, communication and navigation systems are being upgraded and the C-130 Hercules' life extension project is underway.

Proposals will shortly be considered to replace the Iroquois and Sioux helicopter fleets with NH 90 helicopters and light utility training helicopters.
In total, $3 billion has been set aside for the capital acquisitions under the Long Term Development Plan.

Even more significantly, a major decision was made in Budget 2005 to set aside $4.6 billion for a 10-year capability rebuilding system known as the Defence Sustainability Initiative.

This followed a review that concluded that such an investment was vital if the Defence Forces are to meet the government's policy requirements.
The Defence Sustainability Initiative provides for a staged recovery of personnel numbers (an increase of around 1200 within the next five years), infrastructure, reserve stocks, and corporate planning capability.

The DSI and the LTDP provide Defence for the first time with financial certainty well into the future.

I come finally to the third question I foreshadowed, which is the new demands placed on Defence Force leadership by the contemporary economic and political environment.

This, in fact, is addressed within the DSI. Strong and robust organisational planning and management systems are critical for the Defence Force to secure maximum benefits from its new funding. It is vital that we achieve high cost effectiveness and productivity.

Defence currently consumes around $1.5 billion in government funding a year, and this will increase to over $2 billion by 2010. It employs over 12,000 people and that will increase in due course by a further 2000 people. It is one of the government's largest investors in capital.

Defence is a big business. It requires strong and effective leadership supported by robust corporate systems. This has not traditionally been the focus of the Defence Force. The traditional focus has been on operational management, which it has done tremendously well. The Defence Force has always been able to be relied upon to deliver in this respect.

In the 21st Century, we need equally to be able to rely on the Defence Force to demonstrate strong corporate management skills.

I would like to acknowledge the role that Bruce Ferguson, as CDF, has played in modernising the leadership and management of the NZDF.

The establishment of an Executive Leadership Team, and enhancements to the corporate management planning and reporting systems are first and big steps towards ensuring that the business of the NZDF is as well managed as the Force has been well led.

To be effective, a leader of a modern defence force has to embrace good public sector management skills.

In conclusion, in making my comments today I have drawn on my recent experience as Minister of Foreign Affairs. I am still learning about the demands of Defence and my other portfolios, which include Trade and Associate Finance responsibilities in the areas of International and Defence Policy.

However, the experience I have already had with our Defence Force personnel on international deployments gives me confidence in their ability and, as a New Zealander, real pride in their achievements.

Clear direction from government on the tasks we require the Defence Force to fulfill and adequate resourcing of their needs together with strong management and leadership within the NZDF will ensure we can realise their full potential.

That in turn will help New Zealand to make a real difference as a good international citizen and demonstrate that leadership is not only the preserve of the large and the powerful in the international community.

ENDS

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