In May 2001 the Fifth Labour Government of New Zealand decided to disband the Royal New Zealand Air Force's air combat force by withdrawing its Douglas A-4K Skyhawk fighter aircraft and Aermacchi MB-339 trainers without replacement. This followed a debate over whether 28 General Dynamics F-16 A/B Fighting Falcon fighter aircraft should be leased from the United States to replace the Skyhawks. The RNZAF's air combat units were disbanded in October 2001, and many of the aircraft were eventually sold.

In November 1998, The National-led Coalition Government made the decision to lease 28 F-16 A/B fighter aircraft. The Labour Party opposition opposed this decision on the grounds that the funds would be better spent on the Army. Following Labour's victory in the 1999 New Zealand general election, the new government commissioned a review of the fighter lease. While the report recommended reducing the number of F-16s, the government decided instead to cancel the deal in February 2000. The air combat force was disbanded following further consideration, with the government stating that the funding this freed up would be reallocated to other elements of the New Zealand Defence Force.

The decision to disband the RNZAF's air combat force was controversial. The opposition National Party disagreed with the decision, as did many RNZAF personnel. Defence commentators' views differed, with some seeing the air combat force as being of little value while others feeling that New Zealand would be overly reliant on its allies, Australia in particular. Public opinion was also split, but a majority agreed with the decision.

Background

Skyhawk Delivery For over three decades, the Douglas A-4 Skyhawk served as New Zealand's primary combat aircraft. This decision, along with the purchase of the Bell 47 and Bell UH-1 Iroqouis helicopters and Lockheed P-3 Orion maritime patrol aircraft, reflected the closer strategic relationship with the United States and Australia in the 1960s. In April 1968, 14 were ordered at the cost of $24.65 million.

The 10 A-4K and 4 TA-4K aircraft arrived in Auckland aboard the USS Okinawa in May 1970. The delivery party was met with minor local opposition from anti-war protest groups who were concerned about New Zealand and its friendly relations with the United States in regards to the ongoing Vietnam War. The fact that the A-4 Skyhawk itself had been utilised extensively by the United States during the war was a particular point of concern among protestors.

Project Kahu

By the 1980s, the Skyhawks were reaching the end of their effective use. Three options were considered; the purchase of more capable second hand aircraft such as the F-4 Phantom II, new aircraft such as the F-16 Fighting Falcon, or an upgrade for the A-4 Skyhawk. Eventually, a comprehensive upgrade to the Skyhawk was chosen.

The Skyhawk upgrade was extremely comprehensive, including a new radar, HOTAS controls, glass cockpit with HUD and new inertial navigation system. The aircraft also received armament upgrades including the capability to fire AIM-9L Sidewinder air-to-air missiles, AGM-65 Maverick air-to-ground missiles and GBU-16 Paveway II laser-guided bombs. The cost of the project was NZ$140 million and gave the RNZAF Skyhawks the electronic “eyes and ears” of a modern fighter aircraft such as the F-16 Fighting Falcon or McDonnell Douglas F/A-18 Hornet. Despite cooling of NZ-US relations over New Zealands new anti-nuclear policy, the US Congress gave its approval in December 1985, while other work was accomplished by New Zealand-based companies such as Pacific Aerospace.

To complement these upgrades, the new Aermacchi MB-339 was introduced as an advanced jet trainer.

Wing Commander Ian Gore said:

The 1997 White Paper commented further: "The aircraft are old but sturdy. They have been rewinged and seven years ago were given a major upgrade. They have sufficient life left to perform effectively into the next decade." However, while the upgrades took place, it was further planned to eventually replace the Skyhawk fleet with leased F-16 Aircraft from the United States in the near future.

The Deal of the Century

In December 1998, the New Zealand Government made an announcement that it would lease 28 F-16 Fighting Falcon Block 15OCU (13 single seaters and 15 two seaters) aircraft from the United States. The Block 15 aircraft featured improvements such as enlarged horizontal stabilisers and an improved AN/APG-66(V)2 radar. The aircraft had initially been ordered by Pakistan in 1990, but had been stored at the 309th Aerospace Maintenance and Regeneration Group (AMARG) storage facility after test flights were completed, as a result of a US Congress embargo against Pakistan due to tensions relating to nuclear weapons at the time. As a result, these aircraft had negligible engine and airframe time. These low figures, in combination with the fact that these aircraft were some of the newest F-16 aircraft built at the time, was a driving force behind the deal. The government decided to acquire the aircraft under a lease-buy deal, with payments taking place over the course of 10 years, with much of the total cost being offset by the proposed sale of the existing A-4 Skyhawk fleet to the Philippine Air Force. After the ten-year lease, the option was available to purchase all 28 aircraft for $140M USD.

A paper from the Centre for Strategic Studies stated that F-16 fighter aircraft would be a preferable choice in comparison to reconstituting the air combat force with attack helicopters, stating that "The F-16 is a much lower cost option, is more versatile, effective in a wider range of roles, easier to deploy, less risk to operate and will be usable from the time the aircraft arrived in New Zealand."

The formal lease contract was signed in August 1999, with No. 2 Squadron RNZAF and No. 75 Squadron RNZAF envisaged as the squadrons to operate the aircraft. By early 2000, $35M NZD in payments had been made, with a number of RNZAF personnel in the United States to facilitate the deal. A number of promotional materials were also created to facilitate the sales of the existing Skyhawk fleet. It was intended that the aircraft would be used to support New Zealand, Australian, Singaporean and Malaysian defence forces as well as other allies and partners.

The deal became a topic of discussion during the 1999 New Zealand general election, with various political figures expressing their viewpoint on the deal at a pre-election debate held in October 1999 at the University of Auckland.

National Party

National Party MP Wayne Mapp asserted the importance of a balanced force, highlighting that not all potential emergencies can be addressed solely through land-based strategies. Despite the Army's capabilities, it may not always be the most suitable option for certain emergencies, underscoring the importance of a comprehensive and versatile defense approach. The foreign policy importance of the deal in improving the then frosty relations with the United States was also discussed as a major factor.

Labour Party

The opposition Labour Party was not in favour of the deal, in addition to further spending on offensive military capabilities. Labour MP Phil Goff outlined New Zealand's evolving role in international security, emphasizing the diminishing threat of global war following the end of the Cold War, citing the end of history narrative prevalent at the time. Goff further highlighted the country's increasing involvement in low intensity peacekeeping missions. Goff expressed the Labour Party's belief in focusing on contributing to global security through peacekeeping efforts, citing New Zealand's economic and political interests in promoting a peaceful international environment. He underscores the nation's commitment to preventing aggression and upholding international law. Goff views peacekeeping as a crucial means of translating concerns about human rights into tangible actions, noting the widespread support for such endeavors in both political and public spheres in New Zealand. Finally Goff, himself a former protester of New Zealand's involvement in Vietnam, contrasts New Zealand's support for peacekeeping missions with past military involvement in Vietnam.

In particular regard to the F-16 deal, Goff stated:

As a result, the official Labour Party platform was to strongly oppose the deal, in favour of addressing deficiencies in the composition of the New Zealand Army, primarily for the role of performing peacekeeping operations.

ACT Party

Derek Quigley of the ACT Party, in his paper Pragmatic Basis for Security Relationships agreed with the general ambitions to reorganise the New Zealand Defence Force into a primarily peacekeeping force, but emphasised the importance of having a minimal viable level of capability.

Alliance

Alliance MP Matt Robson emphasised the importance of making a decision that would maximise New Zealand's geopolitical independence, preferring to allocate funding to the renewal of the Air Force's C-130 Hercules fleet, as well as a logistics support ship.

Green Party

The Green Party was against the deal, with Keith Locke stating the parties case for conventional disarmament. The party proposed halving defence spending to $800 million NZD through eliminating air and naval combat capabilities.

NZ First

New Zealand First Member Ron Mark affirmed NZ Firsts proposals to rescind the F-16 deal, as well as a third Anzac-class frigate, preferring to focus on the development of the New Zealand Army. This would be done through the proposed reintroduction of compulsory military service and investment in facilities, equipment and training.

Helen Clark and the Fifth Labour Government

Cancellation of the F-16 Deal Helen Clark led the New Zealand Labour Party to success in the 1999 New Zealand General Election, forming a coalition government with the left-leaning Green Party and Alliance Party. Following the election, President of the United States Bill Clinton attempted to shore up the deal, as reported by Flight International.

Flight International further reported that in the fallout of the election, Russian aircraft company Sukhoi reportedly offered an alternative proposal for the lease of an unspecified number of Sukhoi Su-30 multirole fighters and supporting equipment, undercutting the F-16 deal.

The new government commissioned Derek Quigley to review the F-16 deal on 20 December 1999. Quigley's report was published on 6 March 2000. The report was critical of a lack of proper processes in determining defence acquisition priorities, and noted that multiple top-priority projects had not yet had funding allocated. Quigley recommended "that the New Zealand Government consider approaching the US Government with a view to renegotiating the current F-16 package to include a lesser number of aircraft" and that defence procurement processes be improved more broadly.

On 20 March 2000 Clark announced the cancellation of the F-16 deal. She stated that while reducing the number of F-16s as recommended by Quigley would have moderated the funding pressure the lease posed for the defence budget, "it would not have removed it". She also noted that while the lease deal was a bargain, "the mere existence of a bargain at a sale is not a reason for buying it". Clark stated that the Government would focus on improving priority-setting in the defence budget, which would include consideration of whether the air combat force should be retained.

Disbandment

The Department of the Prime Minister and Cabinet published a report on options for the RNZN's air combat capability in February 2001. This report argued that reducing the number of strike aircraft to 14 would not free up enough funds by itself to meet the needs of other elements of the RNZAF. The report judged that disbanding the air combat force "would assist in the rebuilding of the NZDF, significantly reducing the need for additional funding".