In 2005 the Government announced a Defence Funding Package (DFP) and DSI to underpin the achievement and sustainability of its defence policy objectives. The DFP reflected a commitment to inject $4.6 billion over 10 years to develop military capability and organisational capacity in the NZDF.
As part of the DFP/DSI, the NZDF’s governance structure has been reviewed and updated to ensure better co-ordination of work and alignment of strategic objectives and priorities. The Executive Leadership Team (ELT) meets monthly against a standard agenda and reports through mandated sub-committees on emerging issues and business as usual topics.
As noted above, the recovery of personnel numbers is largely on target, and key organisational changes required to improve strategic management have been mostly completed. The major risks to the completion of DSI objectives are various and include both operational and fiscal risks. An operational risk is posed by the commitment of the NZDF at levels above those envisaged in the DSI recovery plan, thus having the effect of slowing the recovery of the NZDF. Fiscal risk to the DSI arises from the pressure on operating expenditure, including price increases of foreign-sourced fuel, ammunition, and equipment spares, and depreciation provisions, which are expected to remain over the next few years.
In order to assist the management of these risks, a RAMP has been developed. This consists of five significant sub-programmes: Capability, Personnel, Financial, Operational Support, and Capital. A key project under the Financial programme was an internal Baseline Review, which has identified potential initiatives to reduce costs for the 06/07 and 07/08 fiscal years, and identified other opportunities for efficiencies over the longer term. These opportunities will be investigated by the ELT and a soon to be established Programme and Change Management Office (PCMO).
As part of the DSI, the Chief of Army is developing Army configuration proposals that are in accord with agreed output milestones on behalf of the Office of Chief Executives (OCE)3, via an ATP, for consideration by Cabinet. The ATP will include policy and options analysis, detailed costings, and an implementation risk analysis.
More detail on progress against the DSI is shown under the Key Priorities section.
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