Finance From U.S. For New Equipment

Press, Volume CVI, Issue 31071, 28 May 1966, Page 1

Finance From U.S. For New Equipment

(N.Z.P.A. Reuter—Copyright)

WELLINGTON, May 27.

Finance for much of the new equipment required by the armed services was likely to come from the United States, through the Export-Import Bank, the newly-appointed Secretary for Defence (Mr W. Hutchings) said today.

Mr Hutchings said that this type of finance by America required the approval of the United States Defence Department. It had been under study for some time, and the Government understood that it would be given favourable consideration.

Mr Hutchings said such an offer raised its own difficulties. It would ease finance in the present year, but would still have to be repaid later. Mr Hutchings was available for questioning on the White Paper on Defence this afternoon, with the Minister of Defence (Mr Eyre), the Chief of Defence Staff (LieutenantGeneral L. W. Thornton), and the Secretary for External Affairs (Mr A. D. Mclntosh). Mr Eyre said that, although in 1963-64 only 7.4 per cent of the defence vote was spent in equipment, this year the percentage would be 24.4, He said that the Government was not wedded to a four-frigate Navy. The requirements were under constant review. The Blackpool would be attached to the New Zealand Navy for four or five years, until a ship shortly to be ordered became operational.

H e thought the new ship would be ordered in about two months. Asked if the New Zealand Navy still thought exclusively in terms of Royal Navy ships, Mr Eyre said that this was no longer so. Mr Hutchings: The Austra-

The request had not yet been made.

lians have bought three American missile destroyers of the John Adams class. But these cost about £3O million each.

Mr Hutchings said a squadron of close-support aircraft would cost about £l2 million. At least five categories of aircraft were being considered for this role. Mr Eyre said the orders would be placed before the end of the year. Mr Eyre said the new frigate will cost up to £9 million.

General Thornton said the Army’s Regular Force emergency reserve would be made up of volunteer former regular officers and other ranks who could be called up and sent overseas in conditions short of a declared war.

He said Increased national service intakes would lift the Territorial ceiling to 11,000. At present about 1000 young men were chosen by ballot for military training in each of three intakes yearly. With volunteers, this gave about 4000 men a year. This figure would be increased to about 1250 an intake. Recruiting Mr Eyre said recruiting for the Regular Force was still difficult. “One of our difficulties is In respect of people who have served a term and who we think might reengage. Civilian pay is making a difference there.” Mr Hutchings said it was intended to spend 5 per cent more than last year in recruiting. There was no way to assess the value of recruiting. An added expenditure would not necessarily bring more recruits. “A change in the overseas situation might increase the recruiting rate without expenditure being involved.”