Defence purse cut this year

Press, 28 July 1989, Page 4

Defence purse cut this year

By

DAVE WILSON

Budget allocations for the Army, Navy and Air Force have all been cut this year, but the decreases relate to a transfer of funds to a central account to pay for major capital equipment for the three services. Defence was one arm of Government with ample public warning that last evening’s Budget contained no handouts. Military spending has been capped at $l4OO million a year for three years. Because of forthcoming structural changes within Defence, all big capital purchases will in future be paid from the Defence general fund. As a result, the 1989-90 estimates for Defence general are 112 per cent greater than the sum spent in 1988-89, up from $lBl million to $384 million. The allocation for the Navy is down 14 per cent, from $289.2 million to $247 million, the difference explained as a transfer of funds to Defence. Defence sources say the

I Defence

$42.2 million difference in the Navy allocation is unlikely to include any specific sum tagged for Anzac frigates, with the Government still a month away from a formal decision on the project. The Navy’s capital equipment funds transfer might, however, cover new radar and sensor equipment, communications equipment and the purchase of items associated with the refits of the frigates Southland and Canterbury. Some costs toward the feasibility study for a logistic support ship are expected to be covered also. The Budget provision for the Army, at $416.4 million, is $31.6 million or 7 per cent down on 198889 expenditure. The effective transfer of this sum to Defence general is expected to cover the purchase of the balance of the Army’s new Steyr

rifles, field guns and battlefield communications equipment approved before the imposition of the Defence spending cap. The Air Force allocation at $361.6 million is $45.1 million or 11 per cent down on the 1988-89 expenditure. R.N.Z.A.F. capital equipment items include the ongoing Project Kahu Skyhawk upgrade, the updating of Orion aircraft and the projected replacement of the Strikemaster trainers. The biggest cut in Defence budgeting is a 49 per cent reduction in the allocation for Defence Forces Overseas, reflecting the withdrawal of the Army battalion from Singapore. The Budget has provided for a modest increase for New Zealand Armed Forces personnel taking part in United Nations and other multinational peace-keeping forces.