New Zealand, and no doubt the rest of the world, has had to reprioritize government agendas to fight the COVID-19 pandemic. We made it a priority to keep New Zealanders safe while continuing to accelerate our economic recovery to set the foundations for a better future.
In the last three years, we have seen a significant uplift in investment for New Zealand’s defense. This includes the decisions to acquire the P-8A Poseidon and the C-130J-30 Super Hercules capabilities. Having made these decisions, and in keeping with the principle of kaitiakitanga (or “guardianship” in English), the government is focused on delivery and stewardship, including ensuring we have the right enablers in place to maximize returns on our investments.
The defense industry is a key partner and a fundamental contributor to the successful delivery of capabilities for the New Zealand Defence Force. However, as I write this, New Zealand’s largest city, Auckland, is currently in lockdown as the country faces the delta variant of COVID-19. This latest challenge highlights that, despite how long it has been since the nation’s first confirmed case on Feb. 28, 2020, COVID-19 remains the greatest immediate threat to both our economic recovery and national security.
It is for this reason that at the onset of the global pandemic last year, the New Zealand Ministry of Defence undertook an assessment of the impact COVID-19 may have on the local and global defense industry. The findings of this assessment turned out to be quite prescient. COVID-19 as well as the ensuing health and economic shocks have disrupted communities, broken supply chains and created massive uncertainty for businesses.
However, while defense delivery schedules are under pressure and timelines are being revisited, key quality and capability milestones continue to be met. This conclusion was due to a combination of factors, including:
- The classification of the defense industry as an essential service in key supplier markets, such as Australia and the United States.
- The long-term nature of defense contracts, and the financial stability this provides defense suppliers.
- Extensive government support in New Zealand and internationally to help companies survive the economic crisis in the short to medium term.
The New Zealand economy has held up better than expected, but it doesn’t mean that we have been able to avoid the challenges that industry has faced and will continue to face. A particular challenge for defense capability delivery in New Zealand has been the restrictions on our ability to access international specialists. As a nation of 5 million people, there are times when our project teams need to look overseas for specific skills and expertise.
However, with every challenge, there are also opportunities. The Ministry of Defence, the New Zealand Defence Force and our overseas prime contractors have worked with the local defense industry to create new and exciting opportunities for industry partners who might normally work outside the world of defense to work within it. I look forward to these new relationships, formed during adversity, to becoming embedded within the defense supply chain.
Looking forward, both the New Zealand and Australian governments are investing in defense relative to the size of our economies. This means that across our two markets there are significant opportunities for industry. The Closer Economic Relations and the Australia and New Zealand Government Procurement agreements mean that on both sides of the Tasman Sea, our local businesses are treated as local content.
I am committed to working with my Australian counterpart to remove any barriers of entry, real or perceived, that prevent our businesses from leveraging this opportunity.
The defense industry, unlike most civilian industries, has factors that have helped it weather the storm throughout this pandemic. The majority of these factors are not unique to New Zealand and have largely kept defense industry up and running globally as well. This industry has ensured that our Defence Force, and those of our partners, have been ready throughout the pandemic to respond to a changing world and strategic environment. This experience will enable the defense industry to be prepared for the challenges we face as the world emerges from the shadow of COVID-19 and continues to tackle the challenges that might undermine a peaceful and prosperous world.
Peeni Henare is New Zealand’s defense minister.