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Operational Costs

How much does it cost to operate the NZDF now?
 
 
New Zealand defence policy is based on a series of appropriations for specific units (in order of expense).
These are (text is from Treasury/NZDF) as follows. Risks attached to the costs are identified below.

As can be seen some of the more expensive military structures have very little peacetime utility.
The taxpayer costs of military operational costs are derived from Treasury estimates


Naval Combat Force
Provision of the capabilities of the frigates, HMNZ Ships TE KAHA and TE MANA, prepared to conduct
maritime operations and to contribute support services to the community, in accordance with NZDF
Output Plan specifications
$408m p.a 
This is equivalent to a one-percentage-point change in second personal tax rate (rate = 17.5%)=$430m

Risks
  • Piracy +++
  • State failure +
  • Low intensity proxy wars +
  • High intensity war +++
  • Submarine Sneak Attack +++
  • Antarctic Programme +


Land Combat Force
Provision of the capabilities of the Land Combat Forces (command, control, intelligence and manoeuvre
force elements) prepared to conduct land operations and to contribute support services to the
community, in accordance with NZDF Output Plan specifications.
$384m
This is equivalent to a one-percentage-point change in bottom personal rate (rate = 10.5%) = $340m

Risks
  • State failure ++
  • Low intensity proxy wars ++
  • Occupation/Guerilla Wars ++
  • High intensity war +++


Long Range Transport (Air)
Provision of the capabilities of No 40 Squadron RNZAF (Boeing 757-200 and C-130 Hercules aircraft)
prepared to conduct strategic and tactical air transport operations, including aeromedical evacuation, in
accordance with NZDF Output Plan specifications, and to contribute support services to the community.
$261m p.a.
This is equivalent to a one-percentage-point change on both the top and second tier tax rates = $260m

Risks
  • Volcano ++
  • Earthquake ++
  • Tsunami ++
  • Pandemic +
  • Terrorism ++
  • State failure +++
  • Low intensity proxy wars +++
  • Occupation/Guerilla Wars +++
  • High intensity war +
  • Antarctic Programme +++


Land Support
Provision of the capabilities of the Land Combat Support Forces (artillery, engineers, communications
and military police force elements) prepared to conduct land operations and to contribute support
services to the community, in accordance with NZDF Output Plan specifications.
$215m
This is equivalent to increasing the middle personal income tax threshold to $50,000 (from $48,000)

Risks
  • Volcano ++
  • Earthquake ++
  • Cyclone ++
  • Pandemic ++
  • Agricultural epidemic +
  • Chemical oil spill +
  • Terrorism +
  • State failure ++
  • Low intensity proxy wars +++
  • Occupation/Guerilla Wars +++
  • High intensity war++

Maritime Surveillance (Air)
This appropriation is limited to the provision of the capabilities of No 5 Squadron RNZAF (P-3K2 Orion
aircraft) prepared to conduct airborne surveillance of New Zealand's EEZ, the Pacific region and the
Southern Ocean, to conduct search and rescue missions, and to conduct maritime and land air
operations, in accordance with NZDF Output Plan specifications. This output expense also includes
some support services to the community
$175m p.a.
This is the equivalent of reducing the top personal income tax rate by 1 percentage point = $145m

Risks
  • Volcano (remote from NZ especially) +
  • Earthquake +
  • Cyclone+
  • Pandemic +
  • Agricultural epidemic +
  • Chemical/oil spill ++
  • Unsustainable fishing ++
  • Piracy ++
  • Maritime search and rescue +++
  • Cyber warfare +
  • Terrorism +
  • State failure +
  • Low intensity proxy wars +
  • High intensity war +++
  • Submarine Sneak Attack +++
  • Antarctic Programme ++


Land Logistics
Provision of the capabilities of the Land Combat Service Support Forces (transport, medical, supply,
maintenance support and movements force elements) prepared to support land operations and to
contribute support services to the community, in accordance with NZDF Output Plan specifications.
$158m p.a
This is the equivalent of reducing the top personal income tax rate by 1 percentage point = $145m

Risks
  • Volcano ++
  • Earthquake ++
  • Cyclone++
  • Pandemic ++
  • Agricultural epidemic +
  • State failure++
  • Low intensity proxy wars +++
  • High intensity war+++
  • Antarctic Programme +


Helicopters (land)
Provision of the capabilities of No 3 Squadron RNZAF (Iroquois helicopters) prepared to conduct
tactical air transport, including aeromedical evacuation, and counter-terrorist operations, and to
contribute support services to the community, in accordance with NZDF Output Plan specifications.
$143m p.a.
This is the equivalent of reducing the top personal income tax rate by 1 percentage point = $145m

Risks
  • Volcano ++
  • Earthquake ++
  • Cyclone ++
  • Pandemic ++
  • Agricultural epidemic ++
  • Chemical/oil spill +
  • Maritime search and rescue ++
  • Terrorism ++
  • State failure +++
  • Low intensity proxy wars +++
  • Occupation/Guerilla Wars +++
  • High intensity war ++


Naval EEZ Patrol
Provision of the capabilities of the Offshore and Inshore Patrol Vessels (OPVs, IPVs) prepared for the
conduct of maritime operations in support of Multi-Agency Operations and Tasks (MAO&T), and for the
security and protection of New Zealand's economic border and EEZ, in accordance with NZDF Output
Plan specifications. The OPVs will also be prepared to conduct sovereignty and resource protection
patrol operations in the Southern Ocean, Ross Dependency, South Pacific region and further afield
when directed.
$139m p.a
This is equivalent to increasing the middle personal income tax threshold a further $1000

Risks
  • Volcano +
  • Unsustainable fishing ++
  • Piracy ++
  • Maritime search and rescue +
  • Antarctic Programme +


Naval transport and support forces
Provision of the capabilities of the Fleet Replenishment Ship, HMNZS ENDEAVOUR, and the Multi-
Role Vessel, HMNZS CANTERBURY, prepared to conduct maritime logistic support and amphibious
sealift operations for deployed military forces, in accordance with NZDF Output Plan specifications.
This output expense also includes contributions to a range of services provided to Government and the
community.
$105m p.a.
This is equivalent to increasing the middle personal income tax threshold a further $1000

Risks
  • Volcano +++
  • Earthquake +++
  • Cyclone +++
  • Pandemic +
  • Piracy ++
  • Maritime search and rescue +
  • State failure +++
  • Low intensity proxy wars +++
  • Occupation/Guerilla Wars ++


Special forces
Provision of the capabilities of the Special Operations Forces prepared to conduct special forces
operations in support of land operations, counter-terrorist operations, and the provision of Chemical,
Biological, Radiological, Explosive, Improvised Explosive Device Disposal (CBRE IEDD) that threaten
public safety or national interests, in accordance with NZDF Output Plan specifications.
$75m p.a.
This is equivalent to increasing the top personal income tax threshold a further $7000

Risks
  • Pandemic + 
  • Chemical fire/gas +
  • Piracy ++
  • Terrorism +++
  • State sabotage +
  • Low intensity proxy wars +++
  • Occupation/Guerilla Wars +++
  • High intensity war +++


Naval helicopter
Provision of the capabilities of No 6 Squadron RNZAF (Seasprite SH-2G helicopters) prepared to
conduct maritime operations in support of other Output Expenses, especially the Naval Combat Forces,
Naval Support Forces and Naval Patrol Forces, in accordance with NZDF Output Plan specifications.
$66m p.a.
This is equivalent to increasing the top personal income tax threshold a further $7000

Risks
  • Volcano ++
  • Earthquake ++
  • Cyclone ++
  • Unsustainable fishing +++
  • Piracy ++
  • Maritime search and rescue +++
  • Terrorism +
  • State sabotage +++
  • State failure +
  • Low intensity proxy wars +
  • High intensity war +++
  • Submarine Sneak Attack +++
  • Antarctic Programme ++


Naval Hydrology
Provision of the capabilities of the hydrographic and oceanographic survey vessel, HMNZS
RESOLUTION, specialist personnel and support infrastructure to conduct military hydrography in
accordance with NZDF Output Plan specifications, and hydrographic data collection and processing
that meets contractual commitments to Land Information New Zealand (LINZ). This output expense is
supported by the Hydrographic Business Unit.
$13m
This is equivalent to increasing the top personal income tax threshold a further $1000

Risks
  • Volcano ++
  • Earthquake ++
  • Unsustainable fishing +
  • State sabotage ++
  • Antarctic Programme ++


Naval Mine Countermeasures
Provision of the capabilities of the Mine Countermeasures (MCM) Forces, including HMNZS
MANAWANUI, prepared to conduct route surveys and conditioning of selected New Zealand ports, and
the provision of the Operational Diving Team prepared to support MCM operations and to conduct
independent diving tasks, in accordance with NZDF Output Plan specifications. This output expense
also includes some support services to the community.
$25m
This is equivalent to increasing the top personal income tax threshold a further $2000

Risks
  • Unsustainable fishing +
  • Terrorism ++
  • State sabotage +++
  • High intensity war +++
  • Submarine Sneak Attack ++

Tax Effect Summary based on treasury data

 Programme  Cost 2010  Cost per taxpayer
 Naval Combat  $408m  $136
 Land Combat  $384m  $128
 Air Transport  $261m  $87
 Land Support  $215m  $72
 Marine surveillance  $175m  $58 
 Land logistics  $158m  $53
 Helicopters (land)  $143m  $48
 Naval EEZ Patrol $139m   $46
 Naval transport  $104m  $35
 Special forces  $75m  $25
 Helicopters (Naval)  $66m  $22
 Hydrology (Naval)  $13m  $4
 Naval divers  $25m  $8
 Total  $2167m  $722


Tax Benefits of discontinuing Naval and Land combat forces

If Naval and Land Combat programmes were discontinued  three million taxpayers would reduce Vote Defence by $864 million. This would be the same as increasing the Vote Education budget allocation to primary and secondary school operation by 50%.

The risks effected would be
  • Piracy  (slightly as Naval transport and helicopters could cover this)
  • State failure  (somewhat as combat forces are backup)
  • Low intensity proxy wars  (somewhat as special forces and helicopters remain for retaliation)
  • Occupation/Guerilla Wars  (somewhat as special forces and support remain)
  • High intensity war  (significantly as there would be no officer nucleus)
  • Submarine Sneak Attack  (significantly, although in two world wars it never happened)
  • Antarctic Programme  (very slightly as most programme EEZ patrol, air transport or logistics)